Calif. Health Initiative on Deathbed

By Christopher Lee
Washington Post Staff Writer
Tuesday, January 29, 2008

The California Senate's health committee effectively killed an ambitious proposal to create a near-universal health-care system, dealing a major political defeat yesterday to Gov. Arnold Schwarzenegger and a setback to similar efforts nationally.

The bill, which would have covered nearly 4 million people, or 70 percent of the state's uninsured residents, had been a top priority for Schwarzenegger (R) since last January, when the governor presented a proposal to create a system that would guarantee health insurance for all Californians.

"I will not give up trying to fix our broken health-care system," Schwarzenegger said after the vote. "The issue is too important, and the crisis is too serious, to walk away after all the great progress we have made."

Schwarzenegger negotiated mainly with Democrats, who control the state legislature and had their own ideas for a health-care overhaul. They proved more amenable to a major initiative than state Republicans, who were deeply skeptical of the plans. Late in the year, the governor found a partner in Assembly Speaker Fabian N¿¿ez, and the Assembly passed a compromise bill on a party-line vote late last month.

But the legislation ran into trouble in the Senate last week, in large part because of concerns about whether California could afford the estimated $14 billion cost when the state faces a $14 billion budget deficit. The state's nonpartisan Legislative Analyst's Office released a study that found the program could face an annual deficit of as much as $1.5 billion by the end of its fifth year.

"It doesn't matter if there are all these good things in the bill if there isn't enough money to pay for them," said Sen. Sheila Kuehl (D), the panel's chairman. "This bill was a very good start, but it doesn't hold together."

Appearing before the panel, N¿¿ez said the bill was a "sound response" to the problem of improving access to health care for millions of Californians.

"It's not a perfect fit by any stretch of the imagination, but when you are involved in negotiating on something as difficult as health care, there are ups and downs," N¿¿ez said. "We did the very best that we could."

The proposal would have required all Californians to obtain health insurance beginning in 2010, although those deemed unable to afford it would have been exempted. That "individual mandate" did not sit well with labor groups and some Democrats, who feared it would impose too much of a burden on working people.

Employers would have been required to provide health coverage to their workers or pay an annual fee to the state, and the plan would have imposed a tax on hospitals and increased taxes on cigarettes by $1.75 a pack, all measures opposed by Republicans and business groups. The plan would have expanded public programs and established a state purchasing pool to help Californians buy private insurance. Voters would have had to approve the financing of the program in a statewide ballot initiative in November.

Anthony Wright, executive director of Health Access California, a nonprofit advocacy group, said California faced the challenge of finding consensus in a diverse electorate, along with a way to pay for the program.

"California has some unique issues," Wright said. "We're such a big state, and we have one of the largest percentages of uninsured. So we're not just bridging a gap, we're jumping a chasm."

Although other states, notably Massachusetts, have tried to expand health coverage, experts said a comprehensive health overhaul in a big, politically influential state such as California would have spurred similar efforts around the country and increased the pressure on presidential candidates.

The defeat "is a significant blow, but not a fatal blow, to the growing momentum for health reform nationally," said Drew E. Altman, president of the Henry J. Kaiser Family Foundation, a California-based nonpartisan group that researches health-care issues. "California's failure, after coming so close, underscores the lesson that too many states don't have the political will or resources to reform health care on their own, and thus the need for a national solution of some kind."

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