Universal health care effort fails in California
29 01 08 - 11:19
By Bill Ainsworth
UNION-TRIBUNE STAFF WRITER
January 29, 2008
SACRAMENTO - Gov. Arnold Schwarzenegger found a way to steer his ambitious universal health care bill around fellow Republicans' resistance to new taxes.
But in the end, it didn't matter.
The bill was killed yesterday by Senate Democrats, who argued that it would burden consumers, dig a deep hole in the state's deficit-ridden budget and provide a windfall to insurance companies. They joined Republicans in a 7-1 vote by the Senate Health Committee against the legislation.
The defeat of a bill that promised to cover 3.6 million Californians illustrates the difficulties of passing a compromise, centrist plan in a polarized Legislature. The vote effectively ends any chance for major health care changes this year.
"This bill was a very good start, but it doesn't hold together," said state Sen. Sheila Kuehl, D-Santa Monica, chairwoman of the Senate Health Committee.
Kuehl and several other Democrats said they favor a single-payer government plan that eliminates insurers from the equation.
Supporters of proposed health system overhaul called the vote a missed opportunity.
"It's incredibly disappointing," said Anthony Wright, executive director of Health Access, a union-backed group that pushes for expanded coverage. "There's millions of Californians who have lost hope for getting coverage."
The committee action represents a bitter defeat for two of the state's most powerful political leaders.
Health care had become central to Schwarzenegger's agenda and backers suggested that passing this plan would vault him into the ranks of the state's legendary governors.
Assembly Speaker Fabian Nunez, D-Los Angeles, the bill's author, wanted a deal, in part, to improve the Legislature's image and persuade voters to approve Proposition 93, the Feb. 5 ballot measure that would change term limits to allow incumbents to serve longer in their current offices.
Schwarzenegger vowed to continue working on health care.
“The issue is too important and the crisis is too serious to walk away after all the progress we have made,” he said in a statement. "The problems will not disappear. In fact, they are likely to get worse."
Yet with the state facing a $14.5 billion budget shortfall, there are virtually no funds available for any major health care initiative.
Now advocates of a health care overhaul are likely to shift their focus toward the presidential race, where the major Democratic candidates have proposed plans similar to the one backed by Schwarzenegger.
"If the Democrats are successful in November and we have a Democratic president there's no doubt that health care will be at the top of the agenda," said state Senate President Pro Tempore Don Perata, D-Oakland.
After weeks of public hand-wringing, Perata yesterday opposed the legislation.
Schwarzenegger was an unlikely champion of universal health care. During his first three years in office, he paid little attention to the issue.
Last year, fresh from a resounding re-election victory, the governor launched a bold drive to cover the state's uninsured.
Schwarzenegger wanted to fix a broken system that has suffered from soaring insurance premiums, a growing number of uninsured and increasing congestion in the state's emergency rooms.
Schwarzenegger, who had spent three years opposing tax increases, shocked his business allies by recommending employer fees for those companies that don't cover their workers, a hospital tax and a tax on doctors that later was dropped.
His plan would have required all Californians to obtain coverage, created an insurance pool for the uninsured, provided subsidies for low-income residents and forced insurers to cover all applicants, including those with pre-existing conditions. He also proposed leveraging billions of dollars in additional Medi-Cal funds from the federal government.
Schwarzenegger and his allies cobbled together a coalition that included consumer groups, the AARP, Safeway and other large corporations. He could never persuade GOP lawmakers to join because of their opposition to taxes.
Consequently, he ended up negotiating with Nunez, who could never convince some powerful labor unions to support the plan.
In the fall, Schwarzenegger and Nunez decided that without GOP votes to supply the two-thirds majority vote in the Legislature needed to raise taxes, they would have to try a novel, two-step approach.
They would back legislation containing the plan and a separate initiative to seek voter approval to finance it, which included hospital, employer and tobacco taxes.
In December, Nunez and Schwarzenegger reached an agreement and the Assembly passed the bill, ABX1 1.
In light of the growing budget deficit, Perata put the brakes on the legislation and sought an assessment by the independent Legislative Analyst's Office.
Supporters said the plan wouldn't impact the state's general fund because it had independent sources of revenues. But the assessment, released last week, said the plan could fall short, requiring money from the general fund.
Republican lawmakers seized on that report.
"We don't have the money for it at a time when we have a $14 billion budget deficit," said state Sen. Sam Aanestad, R-Grass Valley.
The massive proposal also faced an uncertainty at the ballot box. In addition to tax-averse Republicans, the proposal would have faced a powerful new political enemy: the tobacco industry, which planned to spend tens of millions of dollars against the ballot measure in November.
In addition, the plan was the product of so much compromise it was unclear which groups were enthusiastic enough to spend the millions of dollars needed to fund the signature-gathering drive and the fall campaign.
Even some sympathetic to the plan suggested the initiative could have lost by a large popular vote, which they feared would set back the cause of health care reform.
Democratic political consultant Garry South said he isn't surprised that Democrats defeated the plan because many distrust insurers.
"The fatal flaw in this thing was requiring people to buy health insurance without controlling the costs of a policy," South said. "That could be a windfall for insurance companies."
Thad Kousser, a political scientist at the University of California San Diego, said he doesn't believe yesterday's action is a setback for health care nationally.
"If this were just a California policy issue, you'd say 'What are the Democrats waiting for?' " Kousser said. "But the fact that it looks like a Democrat will win the presidency makes it easier for them to sit this one out and wait for a health care plan that comes from a Democrat."