California Health Plan in Peril

[question everything]

The Wall Street Journal

California Health Plan in Peril
Hospitals Boost Stalled Proposal; Voters May Decide
By RHONDA L. RUNDLE
September 11, 2007; Page A6

California Gov. Arnold Schwarzenegger's ambitious proposal for universal statewide health-care coverage, announced in January, is hanging by a thread as the regular legislative session ends this week. The plan's fate could rest with California voters in a ballot initiative next year. Policy makers around the country have been watching California to see whether a way can be found to extend insurance coverage to all citizens. While Massachusetts did that last year, California has more uninsured residents than any other state, so overhauling its $200 billion health-care industry could be an important national model.

But the Republican governor's $12 billion plan hasn't garnered support from any Republican lawmakers, who reject its taxes on employers, hospitals and doctors to pay for health coverage for 6.8 million uninsured residents. Many Democrats balk at its mandate requiring everyone without employer insurance to buy individual coverage, because there isn't any guarantee that such coverage would be affordable.

Over the summer, negotiations stalled as lawmakers battled with the governor over the state budget and other issues. Mr. Schwarzenegger's health-care proposal never has been formally introduced as legislation. However, in recent days, momentum for the initiative got a boost from the California Hospital Association, which agreed for the first time to support a revenue tax on the state's more than 400 hospitals. In another surprising turn, some business groups are backing a general sales-tax increase to help fund coverage for the uninsured.

(snip)

Meanwhile, a Democratic plan was expected yesterday to pass both legislative houses in Sacramento. Mr. Schwarzenegger has said he will veto the bill because he says it puts too big a burden on employers. The bill would extend coverage to about 70% of the state's uninsured and would be funded by a 7.5% payroll tax on employers who don't provide insurance, nearly twice the 4% levy proposed by the governor. There isn't any individual mandate or financial contribution from doctors or hospitals, which violates Mr. Schwarzenegger's guiding principle of "shared responsibility" among all stakeholders who stand to benefit from an overhaul.

(snip)

For now, the bill doesn't include a hospital tax. The governor's proposed tax, along with federal matching funds, would bring into state coffers more than $3 billion for the state's Medicaid program for the poor. The bill also lacks a requirement that everyone buy insurance. Inclusion of a hospital tax, and possibly a sales-tax increase, could reduce the burden on employers. California lawmakers are barred from enacting any new taxes without a two-thirds majority vote, which can't be achieved without Republican votes. To circumvent this obstacle, Mr. Schwarzenegger yesterday called for a special legislative session to pursue a two-pronged approach. Lawmakers would hammer out a compromise blueprint in coming days, followed by a ballot initiative in 2008. Voters would be asked to approve new taxes to cover the costs. Mr. Schwarzenegger's supporters have said they believe there is widespread public support for such a plan, even among many business groups and Republicans, who traditionally oppose tax increases.


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[question everything]

1. Where does Richardson stand?

I suppose it is not coincidence that the (southern) border states of CA, AZ, NM and TX have high percentage of uninsured people. But I am curious of whether Richardson has any health care plan.