Schwarzenegger takes center stage in U.S. health reform

By Lisa Baertlein
Friday, January 12, 2007; 6:36 PM

LOS ANGELES (Reuters) - Gov. Arnold Schwarzenegger's plan to extend health insurance to California's 6.5 million uninsured could help put universal health coverage back on the national agenda at a time of political change in Washington.

Doubts have been voiced about whether the celebrity governor would be able to fully fund the ambitious, $12 billion proposal he put forward on Monday.

But after more than a decade since the last big national health care reform push, Schwarzenegger's timing just may be perfect with a new Democrat-run Congress taking over in Washington and presidential elections less than two years away.

"We're really seeing the return of universal health coverage to the national dialogue," Diane Rowland, executive director of the Kaiser Commission on Medicaid and the uninsured, told Reuters.

"It propels the discussion and puts more pressure on national candidates, Congress and the president," she said.

The proposal announced by California's Republican governor -- a budding reformer who has also crossed party lines to back a state law aimed at curbing greenhouse gas emissions -- would require everyone in the state to carry insurance and tax doctors, and hospitals and all but the smallest companies that do not provide health benefits.

Insurers would no longer be able to deny coverage based on age or pre-existing health conditions and overhead would be limited to $15 of every $100 in premiums. The state would also need its federal funding increased to the tune of more than $5 billion to pay for the proposed plan.

Massachusetts, which has a population about as large as California's ranks of uninsured, last year became the first state to pass a law requiring all individuals to buy health coverage.

Employers are the main provider of health insurance in the United States, where the government pays for the care of the elderly and the poor. Nearly 47 million Americans lack health coverage, a number expected to continue to rise as the skyrocketing cost of health care drives up insurance premiums.

Since killing former President Bill Clinton's proposal for universal health coverage in 1994, U.S. lawmakers have failed to address the health care crisis.

In the current spiral, rising insurance costs are prompting employers to cut coverage, swelling the ranks of uninsured and overwhelming hospital emergency rooms with very sick people who cannot pay and who, by law, cannot be turned away.


As federal lawmakers grapple with national issues such as the war in Iraq and the threat of terrorism, governors in states like Massachusetts, Maine and Vermont already have adopted plans to cover virtually everyone.

States set a precedent for similar efforts in the early 1990s, when Wisconsin's then-governor led welfare reform efforts that resulted in a major federal program that helped states cover children from low-income families.

Schwarzenegger, nursing a broken leg from a holiday ski accident, has received kudos for bringing relevant interest groups -- doctors, insurers, hospitals, small business, unions and the Democrats that control the state legislature -- to the table.

"Health care reform is an interlocking puzzle ... if someone tries to take their piece out, it doesn't work. I think it reflects his understanding that, at the end of the day, it's not his plan," said health care consultant Peter Harbage, who participated in the discussions.

Doubts about funding plague any reform effort, and the Schwarzenegger plan is no different.

"Ultimately, the question here is whether there is enough money to guarantee that people have access to a quality health plan," said Jacob Hacker, a Yale University political science professor and author of "The Great Risk Shift," about Americans' increasing health care cost burden.

"The answer, it seems pretty clear, is no."

Full Legal Notice
© 2007 Reuters