The Clock Is Ticking for Health Care Reform in California

Crunch time is approaching in “The Year of Health Care” in California.

After assigning a capital-letter theme to 2007 in January, Gov. Arnold Schwarzenegger (R) and legislators make the final turn onto the homestretch when the Legislature reconvenes Aug. 20 for its last four-week session. If they can get past the budget wrangling and Democratic one-ups-manship that marked the end of the summer session last month, California’s leaders still have a chance to enact meaningful health reform as promised before the end of The Year of Health Care.

But they don’t have much time to spare.

If substantive progress isn’t made by the end of this month or early September, it’s not likely anything can be in place by the end of the year.

Despite Schwarzenegger’s worries that gridlock over the state budget may distract lawmakers from health care reform (a sentiment he expressed earlier this month), his press office says the governor is “committed and focused on getting this accomplished by the end of the next session.”

“The governor is optimistic that he and the Legislature will be able to reach an agreement before the end of the scheduled session,” said Sabrina Lockhart in Schwarzenegger’s press office.

“There have been special sessions called, certainly, and that could happen again, but it’s premature to talk about that at this point,” Lockhart said.

The Senate last month fell one Republican vote short of approving a state budget for fiscal year 2007-2008. All but one Republican lawmaker voted against the budget despite an assurance by Schwarzenegger that he would invoke his line-item veto authority to cut $700 million in spending from the budget.

The Assembly approved a spending plan, but Senate Republicans have abstained from passing a plan until more demands are met, including the additional $700 million in cuts to reduce the operating deficit to zero.

Once budget issues are settled, a couple of crucial health care issues need to be worked out quickly:

  • Political choices. Will the state pursue a “fix-what-we-have” proposal, or is California ready for a whole new single-payer approach?
  • How much can Californians afford? No matter which vehicle is chosen, there will be new costs — for businesses, for individuals, for government. Determining how much and who to charge will be thorny.
Options on the Table

After weeks of winnowing, two concrete legislative plans and one promissory proposal remain on the table. The concrete offerings are SB 840, the single-payer plan by Sen. Sheila Kuehl (D-Los Angeles), chair of the Senate Health Committee, and AB 8, an amalgamation of bills by Assembly Speaker Fabian Núñez (D-Los Angeles) and Senate Pro Tempore Don Perata (D-Oakland).

The “promissory” plan is the sweeping reform package that Gov. Schwarzenegger announced earlier this year but that hasn’t been offered as legislation.

Ideologically, the governor’s plan and AB 8 are not so far apart in that both call for various adjustments to the current employer-sponsored health insurance system. However, differences between the proposals are drawing support and criticism from a variety of stakeholders.

AB 8 and Schwarzenegger’s plan both call for businesses that do not offer health insurance benefits to contribute to a state fund to offset the cost of providing health benefits. Under both proposals, the contribution would be based on the firm’s payroll — 7.5% under the Democrats’ AB 8 and 4% under Schwarzenegger’s plan.

Another point of distinction between these two plans: Schwarzenegger would require all Californians to have — and help pay for — some form of health insurance. AB 8 does not include an “individual mandate.” Both provisions have drawn criticism.

Kuehl’s SB 840 represents deeper, more fundamental changes to the health care system. Essentially the same plan approved by the Legislature and vetoed by Schwarzenegger last year, SB 840 would establish the state government as the only buyer of health care in the state, basically bypassing the insurance industry.

All three plans will impose higher costs somewhere in the system.

What About Cost Sharing? And Will Coverage Be Affordable?

A group of employers and business leaders, the Coalition to Advance Healthcare Reform, accused the Democrats’ plan of lacking “any notion of individual or shared responsibility.” In a letter to the Senate Health Committee last month, Steve Burd, CEO of Safeway and chairman of the national coalition that includes 50 major employers — including Safeway, General Mills and Edison International — wrote:

“While we disagree with elements of this proposal, CAHR looks forward to continuing to work with legislative Democrats, their Republican counterparts and Gov. Schwarzenegger to develop comprehensive, market-based health care reform in California this year. We believe that everyone needs to be covered. We also believe you can significantly reduce California’s health care bill by introducing transparent information on cost as well as incentives that drive healthy behavior.”

Burd, an early and adamant supporter of Schwarzenegger’s proposal, calls reform efforts “one of the most crucial domestic policy debates of our time — the health of every American.” Adding urgency to the issue, Burd said that “health care reform must happen before 2009.”
Other groups are concerned about higher costs for individuals.

A new report from the California Budget Project and the UCLA Center for Health Policy Research urges policymakers to ensure people truly can afford monthly premiums before requiring them to buy insurance.

“In the debate over health care reform, we can’t lose sight of what California families realistically need and can afford,” said David Carroll, research director with the California Budget Project and co-sponsor for the report “What Does It Take for a Family to Afford to Pay for Health Care?”

“Families should not have to choose between paying their rent and taking a sick child to the doctor,” Carroll said.

Dylan Roby, a joint author of the report and researcher at the UCLA Center for Health Policy Research, said many Californians won’t be able to comply with a requirement to buy health insurance without financial help.

“People should be able to afford to use, not simply buy, health care coverage. The bottom line is that many Californians are going to need help to be able to afford health care coverage,” Roby said.

More Feedback on the Way

As involved as the health care reform debate has been in California this year, there are some who argue that there hasn’t been sufficient opportunity for public input.

Rank-and-file Californians, business leaders and politicians will have a chance to weigh in on the debate on Saturday, Aug. 11, in an unusual statewide forum hosted by CaliforniaSpeaks, a project of AmericaSpeaks, a non-partisan, not-for-profit organization working to give people a chance to be heard by policymakers.

The forum, which will blend cyberspace and satellite connections with face-to-face, small-group dialogue, will involve thousands of participants in 10 counties — San Diego, Humboldt, Fresno, Los Angeles, Sacramento, San Luis Obispo, Alameda, San Francisco, Riverside and San Bernardino.

Schwarzenegger, Núñez, Perata, Assembly Republican Leader Mike Villines and other legislators are scheduled to participate as well.

Sprint to the Finish

Compromises, conciliation and perhaps new levels of statesmanship may be required to actually accomplish something that could live up to the capital letters in The Year of Health Care in California.

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