Calif. healthcare reform: A winding road

The year 2007 has seen continual back-and-forth between California’s Republican Governor Arnold Schwarzenegger and the heads of the Democrat-led state legislature over what to do about nearly 7 million Californians who lack health coverage at least part of the year.

The latest version, now called AB x1 1, is a compromise that has both backers and detractors among labor unions, insurers, providers, professional associations and the business community. Meanwhile, two-thirds of the state’s registered voters support it ― most, the pollsters said, because the current system is so broken.

Commentator Frank Russo, writing on californiaprogressreport.org, recently likened predicting the reform’s future course to driving along a winding mountain road: “As one rounds each bend there is ever-changing scenery.”

Twists and turns Having declared 2007 “the year of health care reform,” the governor outlined his proposal in January, waited until October to present specific legislative language, and still could not find a legislator of either party to introduce it as a bill.

Assembly Speaker Fabian Nunez and Senate President Pro-Tem Don Perata proposed separate measures with similar features, later combined into one bill which Schwarzenegger vetoed.

All three proposals were based on the existing insurance framework, as is the new compromise. A fourth proposal, Sen. Sheila Kuehl’s single-payer bill, passed the legislature in 2006 but was vetoed by Schwarzenegger. It passed the Senate in 2007 but was withdrawn before it could be vetoed again.

Are you dizzy yet? A new turn was rounded on Dec. 17, as the Assembly, on a party-line 46-31 vote, passed the compromise bill. It must still go to the Senate; more on that later.

The Health Access coalition of over 200 organizations, which backs the measure, says it would expand public programs to all children below 300 percent of poverty, expand coverage to parents and childless adults up to 250 percent of poverty, let every Californian buy health coverage regardless of “pre-existing conditions,” and require all Californians to have coverage unless they successfully appeal that the cost would cause financial hardship. Tax credits would help early retirees and families between 250 and 400 percent of poverty so that premiums do not cost more than 5.5 percent of income.

Employers would have to spend between 1 and 6.5 percent of payroll on health coverage, either buying coverage themselves or paying into a state purchasing pool.

Insurers would have to spend 85 cents of every premium dollar on patient health services. They would also have to reveal providers’ cost and quality information, buy prescription drugs in bulk, provide preventive care and use electronic health records. A public insurer would be created to compete with private health plans.

Because California is one of the few states requiring a 60 percent majority to pass new taxes, and Republican legislators see some of the proposed funding as “taxes,” money for AB x1 1 would depend on passing a ballot measure next November.

Odd bedfellows Supporters of the compromise are odd bedfellows. Helping celebrate its passage in Sacramento Dec. 17 were insurers like Blue Shield and providers like Sutter Health, some health professionals’ associations, small business groups, giant corporations like Safeway, at least one head of a regional Chamber of Commerce, and labor unions like SEIU and AFSCME.

In a statement, SEIU’s California State Council called the bill “a solid foundation for fixing our healthcare,” with Sal Rosselli, president of SEIU’s United Healthcare Workers West, saying AB x1 1 is the most significant” health care reform effort since Medicare and Medicaid. (But in a Dec. 19 KPFA interview, Rosselli called the support a tactical step to keep the measure alive, and pointed to several needed changes.)

The opponents are also strange bedfellows. Among them are unions including the Teamsters, Machinists, United Food and Commercial Workers and the California Nurses Association, as well as the state Chamber of Commerce, National Federation of Independent Businesses, and the state’s largest insurer, Blue Cross.

Zenei Cortez, a member of CNA’s Council of Presidents, called the bill “a deeply flawed, patched-together package that will leave the insurance companies in control of our health with millions of California families struggling to pay their medical bills.” CNA has long backed single-payer.

The California Labor Federation said it would back the measure if it is amended, but raised a number of concerns, including failure to state what the required “minimum” insurance policy would cover, too low a cutoff point for family subsidies, and need for a mechanism to increase employers’ contributions as health care costs rise. All year the federation has insisted any measure it would support must ensure affordability and quality of care.

Before AB x1 1 can go further, the Senate needs to pass it. But with the state budget facing a possible $14 billion shortfall in 2008, Senate leader Perata has asked the non-partisan Legislative Analyst’s Office to say how the bill would affect the general fund. Observers expect it to come to the Senate early in the new year.

Keep your eyes on the road.

mbechtel at pww.org