Will Health Care Reform Come Down to Dueling Ballot Measures?

If recent trends are any indication, California voters could be faced with dueling heath care ballot measures by the end of the year.

Next week, the state Senate will deliberate the health care reform package delivered by Republican Gov. Arnold Schwarzenegger and Fabian Núñez, Democratic speaker of the state Assembly. The Assembly passed the plan last month.

Rather than waiting for the Senate to approve the plan, Schwarzenegger and Núñez last week filed a ballot measure proposal with the Attorney General spelling out the economic details of the plan.

Their proposition would ask voters to approve about $9 billion in fees and taxes to help fund the $14 billion reform of the health care system. The other $5 billion would come from federal sources, consumer premiums and copayments.

So one health care reform ballot proposition seems a pretty likely bet for November 2008.

But judging from the past three decades during which California has become increasingly enamored of the “direct democracy” approach to decision-making, the Schwarzenegger-Núñez proposal might not be the only option on the ballot.

Dueling propositions have become almost commonplace on California ballots. In 2004, voters had two casino gambling measures to choose from. In 2005, two prescription drug initiatives vied for approval. Later this year, California voters probably will be asked to choose from at least two water propositions.

It’s not a great leap of logic to predict the possibility of a second health care reform proposal on the November ballot.

Single-Payer at the Ballot Box?

The most likely possibility is some kind of single-payer plan similar to — or perhaps spawned from — Sen. Sheila Kuehl’s bill, SB 840, which in 2006 was approved by the Legislature and vetoed by Schwarzenegger.

Kuehl reintroduced SB 840 in February amid much fanfare in Sacramento associated with Michael Moore’s movie “Sicko.” The bill’s financing mechanism — spelled out in a separate bill (SB 1014) — was introduced in April. The Senate passed SB 840 in June and sent it along to the Assembly, where it languishes on a back burner.

Kuehl’s office was closed over the holidays and couldn’t be reached for comment, but proponents of her single-payer proposal have said the issue might ultimately be decided by voters, not politicians.

The California Nurses Association, a staunch supporter of a single-payer plan and likely supporter of a statewide initiative, is not shy about criticizing the Schwarzenegger-Núñez plan, but leaders of the labor union stop short of predicting an alternative ballot measure … for now.

“I think it’s an open question,” said Chuck Idelson, communications director for CNA. “Clearly what they’ve proposed has serious flaws, but I’m not going to speculate about what might or might not come about in response.”

If an alternative campaign is launched, it will probably happen soon. There’s not much spare time. The race to get anything on the November ballot is going to be tight (and expensive) no matter how many propositions are vying for attention. Supporters have less than two months to collect more than a million signatures to qualify initiatives for November.

Early Support, Vehement Critics

Initial public reaction to the Schwarzenegger-Núñez plan appears positive. A survey by the Field Poll found that California voters approve of a summary of the plan by a margin of 64% to 23%. The support appears to be broad-based, cutting across economic, partisan, geographic, generational and ethnic lines.

But there are plenty of critics as well.

Nurses and some health advocacy groups characterize the Schwarzenegger-Núñez proposal as a “gift for the insurance industry.”

Under the Schwarzenegger-Núñez plan, most Californians would be required to have health insurance. The $14 billion measure aims to cover 3.7 million of the 5.1 million California residents considered “permanently uninsured,” according to Núñez’s office.

The state would set up a program to help low-income residents buy health care coverage. Insurers would be required to provide coverage to all applicants, regardless of age or pre-existing medical conditions. The plan would require insurers to spend at least 85% of premium income on medical care, limiting administrative costs and profit to 15%.

Rose Ann DeMoro, executive director of the California Nurses Association, calls the plan “a big Christmas gift to the insurance industry with Gov. Schwarzenegger playing Santa by doling out public funds to enrich the state’s biggest HMOs and insurers.”

Republican legislators say the plan is fiscally irresponsible when the state is facing a budget shortfall estimated at $14 billion.

“Californians want action to make health care more affordable and accessible for their families, not a back-room deal that will make health care more expensive for everyone,” said Assembly Republican leader Mike Villines of Fresno. “This is a flawed plan that will impose billions in higher taxes and spending, and I am disappointed that Democrats would rush this through rather than work with Republicans to craft fiscally responsible reforms.”

The California Chamber of Commerce opposes the bill.

“Too many questions remain unanswered to understand how this bill will affect California employers, the state’s economy and the gaping budget deficit,” said Allan Zaremberg president of the California Chamber.

Blue Cross of California opposes the plan, saying the requirement that all applicants must be insured will raise premiums for millions of people in the individual insurance market.

Most of the state’s large insurers like the plan.

“This is a historic opportunity to expand access to affordable, quality care and coverage to all Californians,” said Kathleen McKenna, Kaiser Permanente’s director of California public policy communications. “We look forward to working with a broad coalition to educate the public about the benefits of universal coverage. We hope this agreement may serve as a blueprint for national reform.”

Sticking Points Remain

The two main hurdles confronting California’s reform plans are money and the law.

Schwarzenegger has characterized his plan as “revenue neutral,” meaning it would have no impact on the state budget. However, two of the main sources of income to pay for it all — increased federal funding and a steep hike in California’s tobacco tax — fall somewhere short of sure bets.

Moreover, requiring employers to contribute to their workers’ coverage may run afoul of the federal Employee Retirement Income Security Act (ERISA), which pre-empts state laws dealing with employee benefit plans. A Maryland mandate requiring certain employers to provide health care was invalidated by a federal appeals court last year, and an employer mandate in San Francisco’s universal health access law was overturned in December.

“There are still very serious questions about this proposal,” Idelson said. “There are some very important questions about funding when the state is in fiscal crisis and the employer mandate is probably illegal.”

“It’s too early to make predictions,” Idelson said.

But it’s not too early to consider the possibility that California voters may see an alternative to the Schwarzenegger-Núñez insurance-for-all proposal. Clearly, there’s reticence to discuss the issue publicly at this point, but you can be sure there’s plenty of private discussing going on.

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