The struggle over health care reform in California goes on, following Republican Gov. Arnold Schwarzenegger’s veto last month of health care legislation passed by both houses of the Democratic-led Legislature and backed by the state’s labor federation and a broad coalition of health care organizations.

In mid-October, the governor released legislative language for the health care proposal he presented at the beginning of the year, though no legislator from either party has yet agreed to introduce it as a bill.

Schwarzenegger called the Legislature into special session immediately following the regular session to consider health care and water policy, issues on which the two sides could not agree.

The Assembly’s Health Committee, chaired by Assemblyman Mervyn Dymally (D-Compton), was poised to hold an Oct. 31 hearing on the governor’s plan.

Though AB 8, co-authored by the leaders of the two legislative houses and backed by a broad coalition including most of the labor movement, easily passed the Legislature, Democrats could not muster enough votes to override Schwarzenegger’s Oct. 12 veto.

In a statement, California Labor Federation head Art Pulaski said the governor’s veto had “dashed the hopes of working families who cannot afford to wait another day for change to happen.”

Noting that AB 8 “was developed after months of work with legislative leaders and a broad spectrum of stakeholders” and “is the product of public debates and compromise,” Pulaski said the bill’s provision that moderate-income working families would not have to spend more than 5 percent of wages on health care “addressed the serious concerns of affordability.” He called on the governor to use the bill’s framework “as a starting point for real, affordable health care for all Californians.”

The next week, the broadly based It’s Our Healthcare Coalition launched 48-hour vigils at each of the governor’s offices around the state, demanding affordable health care.

Anthony Wright, executive director of the Health Access coalition of over 200 organizations, pointed out in a blog that the governor’s veto was the fourth time in four years he had quashed a measure significantly expanding health coverage for over a million Californians.

AB 8 would have expanded Medi-Cal (the state’s Medicaid) to cover all legal resident children and most parents up to 300 percent of the federal poverty level (or about $60,000 a year for a family of four). It would have set a minimum employer contribution of 7.5 percent for health care and a ceiling of 5 percent of income on what consumers are required to pay in both premiums and out-of-pocket costs. People with pre-existing conditions would have been covered, and cost savings would be encouraged through bulk purchase of prescription drugs.

Under Schwarzenegger’s plan, employers not providing coverage would have to contribute up to 4 percent of payroll to health coverage, on a sliding scale. (California employers providing coverage currently pay an average of 8 percent of payroll.) All Californians would be required to obtain health coverage, with state subsidies for individuals earning less than $25,525 or families of four earning less than $51,625 and a tax credit helping those who earn somewhat more than those amounts. Part of the funding would come from leasing the California lottery to a private firm.

A study by the California Labor Federation provides a devastating analysis of the governor’s proposal, pointing out that the tax credit only applies after a family has spent 5 percent of its income on premiums, and it does not cover out-of-pocket costs.

The Labor Federation pointed out that under Schwarzenegger’s plan, moderate-income working families could end up paying over 20 percent of their income for health insurance. The study also noted that the governor’s proposal fails to curb health care costs, and gives health insurers and drug companies “a new captive audience that is forced to buy their products while failing to limit what those corporations can charge for their products.”

Meanwhile, supporters of Sen. Sheila Kuehl’s SB 840 single payer bill to provide all state residents with quality affordable coverage are vowing to renew their struggle in the 2008 legislative session.