Last week California Gov. Arnold Schwarzenegger revealed a sweeping $12 billion proposal to revamp health care in the state. Among its provisions:

• All residents would have to carry health insurance, and all employers of 10 or more workers would have to provide health benefits or pay 4 percent of payroll into a state purchasing pool. Some 1.2 million low-income Californians could receive state help to buy individual insurance.

• The state would cover all children, including undocumented immigrants, living below 300 percent of the federal poverty level (about $60,000 for a family of four), and would expand Medi-Cal to cover some 630,000 very poor adults who aren’t now eligible for coverage.

• Insurers would be barred from refusing coverage because of pre-existing conditions, age or occupation and would have to spend 85 percent of revenue on care.

• Everyone would have to show proof of insurance either through their workplace or through purchasing coverage individually, with the minimum policy providing a $5,000 deductible and maximum out-of-pocket costs of $10,000 per family.

• While Medi-Cal reimbursements would be raised, doctors would have to pay a tax of 2 percent, and hospitals, 4 percent.

“This year we must take action on health care,” Schwarzenegger said in his State of the State address Jan. 9, pointing out that nearly 6.5 million Californians — nearly one in five — have no coverage. Welcoming proposals made by others, including legislative leaders, he added, “The ultimate answer will come from the principle of shared responsibility — shared by government, by the employers, by the health plans, by the doctors, by the hospitals and by the individual.”

Responses, many of them critical, came quickly.

The broad Health Access California coalition of 200 organizations representing all segments of the state’s population cited “steps forward,” including the goal of ensuring that all Californians have access to coverage, an expanded Medi-Cal with increased reimbursements to providers, rules for insurers and requirements for employers to contribute. But, it said, despite the governor’s theme of “shared responsibility,” the burden is on individual consumers.

“Based on what was proposed, patients and workers bear a disproportionate amount of risk,” Health Access said. The coalition also warned that placing the burden on individuals could undermine employer-based coverage programs.

“While the governor’s health care proposal includes some positive elements, it is the wrong prescription for California’s health care crisis,” Art Pulaski, head of the California Labor Federation, said in a statement, adding that the plan “shifts responsibility for health costs onto already overburdened workers and their families.”

Calling the plan a boon to insurance companies, Pulaski pointed out that there is no guarantee coverage would be either affordable or adequate, and warned that employers who now provide health benefits could drop coverage and just pay the minimal tax. “The proposed employer contribution is so low that even Wal-Mart, a corporation known for its minimal employee health care coverage, already exceeds the requirements,” Pulaski said.

The California Nurses Association said it welcomed the governor’s decision to deal with the growing health care crisis, but called his proposals “little more than a fresh coat of paint on a collapsing house.”

The governor’s proposal to cover undocumented people was seen as positive by advocates of care for working-class and oppressed minority communities, but as a bone of contention by most in his own Republican Party.

The proposal “is a good starting point for discussions in the Legislature this year,” said Assembly Health Committee chair Mervyn Dymally (D-Compton), adding, “My biggest concerns include the individual mandate and a raid on funding that counties use to serve the uninsured who seek care through emergency rooms.”

Calling Schwarzenegger’s plan “very troubling,” state Sen. Sheila Kuehl (D-Santa Monica), who heads the Senate Health Committee, said the proposal “would allow, and even encourage, the proliferation of bare-bones plans.” Writing in California Progress Report, she also criticized the governor’s adoption of a version of President Bush’s health savings accounts. Kuehl, whose single-payer bill passed both houses of the Legislature last year but was vetoed by the governor, is reintroducing the measure this year.

State Senate President pro tem Don Perata (D-East Bay) and Assembly Speaker Fabian Nuñez (D-Los Angeles) have also introduced health care legislation.

mbechtel@pww.org

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