The San Diego Union-Tribune (California)

SACRAMENTO, CA — Health insurance for all has long been a goal for many public officials.

Not only do the uninsured suffer more preventable illnesses than others but they also frequently end up in the state’s emergency rooms, burdening the health system with long waiting lines and chronic money woes.

The cost, logistics and political hurdles have made this goal seem more like a utopian dream than anything that could actually happen.

Perhaps until now.

Gov. Arnold Schwarzenegger‘s desire to expand coverage and cut costs next year has changed the political dynamic in a way that has given advocates of expanded health care their first glimmer of hope in years.

“We feel we have the best chance we’ve had in a long time of getting something done,” said Dustin Corcoran, lobbyist and vice president of the California Medical Association.

It’s surprising that the governor is sparking this cautious optimism. During his first three years in office, Schwarzenegger played a major part in extending a stalemate that for decades has led to the defeat of any major proposal to cover the state’s 6.5 million uninsured residents.

The Republican governor helped kill Democratic plans he said would either burden business with fees or cost the financially strapped state far too much money.

But Schwarzenegger believes the soaring cost of health insurance and the large numbers of uninsured make the current system unsustainable. Consequently, he plans to roll out a major health care proposal next month.

State Sen. President Pro Tempore Don Perata, D-Oakland, got out in front of the governor yesterday by proposing a plan that would cover 4.2 million workers and their families. The plan would impose fees both on employers that don’t provide coverage and their employees. The money would be used to pay for low-cost private insurance that, through the state, would cover those workers.

Perata also wants to require each worker to show proof of insurance on his tax return or face a penalty. The proposal would also expand federally subsidized programs to cover low-income workers.

He said solving the problem is critical for the state’s economy.

“This is the primary issue for us in the coming year,” he said.

Other lawmakers are working with a new sense of urgency on a variety of proposals, including a single-payer universal health coverage plan, a plan to ease tax rules to make it easier for individuals to buy insurance and a plan to cover the 800,000 uninsured children.

The challenge is daunting.

Schwarzenegger’s call to overhaul the health care system comes at a time when the state faces a deficit of $5.5 billion (in a $100 billion budget) that could grow if the economy sours. There are also ever-increasing health insurance premiums, which rose 8.7 percent this year, and a steady decline in the percentage of people covered by their employers.

California Health and Human Services Secretary Kim Belshé said the governor’s team is working seven days a week to draft a proposal.

The Schwarzenegger administration’s frantic pace, which comes at a time when the Capitol is normally in a post-election lull, has stirred an unusual amount of activity. Besides holding news conferences, drawing up position papers and plotting strategy for the upcoming policy fight, many lobbyists and lawmakers are engaged in something akin to Kremlin-watching, trying to guess what the governor will do by analyzing his vague and sometimes conflicting public statements.

On Nov. 14, for example, Schwarzenegger said he wants to cover about half of the uninsured. On Nov. 26, on NBC’s “Meet the Press,” Schwarzenegger said he wants to cover all of the uninsured.

Schwarzenegger has been specific about one thing: He won’t raise taxes.

“That one doesn’t seem to be on the table,” said Assemblyman Hector De La Torre, D-South Gate.

Belshé said the governor wants a health system that is accessible, efficient and affordable. Schwarzenegger, she said, wants a proposal based on “shared responsibility,” requiring individuals, businesses, health plans, the government and health care providers to contribute.

Some view the term “shared responsibility” as a sign the governor is considering a fee for businesses that don’t provide health insurance — an idea strongly opposed by his business allies.

Schwarzenegger is known to admire the ambitious plan passed in Massachusetts, which was negotiated by Republican Gov. Mitt Romney and a Democratic-controlled Legislature.

That plan requires everyone to have insurance or face a penalty. It contains subsidies for low-income residents, new programs and a fee of up to $295 per employee assessed on businesses that don’t insure their workers.

Many experts say the plan cannot be applied here because California has a dramatically different health care landscape.

For one thing, California has a higher percentage of uninsured residents, nearly 21 percent, compared with 13 percent for Massachusetts. Economists believe California’s large low-wage service, agricultural and tourism sectors are the main reason that a smaller percentage of residents are covered through their employers than in Massachusetts and many other states.

The California HealthCare Foundation estimates the state would have to spend up to $9.4 billion to adopt the Massachusetts plan.

“They have to close a gap. We have to jump a chasm,” said Anthony Wright, executive director of Health Access, a consumer and union group that pushes for expanding health insurance.

The UCLA Center for Health Policy Research estimates that 1.5 million of the state’s uninsured are illegal immigrants, including 118,000 in San Diego County.

Belshé said the governor will consider extending health insurance to undocumented residents and he believes children of illegal immigrants, regardless of the children’s immigration status, should have access to care. But he faces strong opposition from his own party.

Republican Assembly leader Mike Villines of Fresno has vowed to block any plan that covers undocumented residents, including children, much like Assembly Republicans did this year.

Children’s advocates insist that Schwarzenegger fulfill a 2003 pledge he made to cover all children.

“Any relevant health reform package must make children’s coverage the top priority,” said Deena Lahn, policy director of the Children’s Defense Fund.

Schwarzenegger initially sought to freeze the state/federal Healthy Families program for the children of the working poor, but he has since helped to expand Healthy Families and Medi-Cal by increasing funds for enrollment.

About 90 percent of the state’s children are covered now. Advocacy groups estimate it would cost the state $380 million to cover the rest.

Schwarzenegger is also considering a requirement that all or most residents be required to buy insurance.

California requires all drivers to have auto insurance, yet an estimated 3.5 million do not, according to the State Department of Insurance.

During the past two years, the Legislature has rejected individual health care mandates.

Wright of Health Access opposes a mandate, contending individual insurance policies are often unaffordable and insurers can reject those with health problems.

“People who are uninsured already suffer enough penalties. They die younger and they live sicker than others,” he said.

Another consumer group, the Foundation for Taxpayer and Consumer Rights, advocates cutting health care costs by regulating health insurance premiums and extending the state’s power to get drug discounts by purchasing in bulk.

Not surprisingly, representatives of managed care plans are fiercely opposed.

They seek to repeal regulations that require all plans to cover certain procedures, arguing that providing basic plans would lower premiums, allowing businesses to cover more workers.

“We’d like to have more flexibility,” said Chris Ohman, president of the California Association of Health Plans, whose 40 members cover 21 million residents.

Ohman warns that the chronic underfunding of Medi-Cal, the state/federal program that covers nearly 7 million poor residents, is another impediment to expanding coverage.

California pays among the lowest reimbursement rates to physicians in the nation, prompting many doctors to decline to see Medi-Cal patients.

“We have to make sure we can meet our existing commitment before we can make promises to new patients,” Ohman said.

Employers say they welcome proposals to cut costs but would oppose any plan involving new requirements for businesses.

Jot Condie, president of the California Restaurant Association, said a mandate unfairly places the burden on the shoulders of one group: employers.

But he said the governor’s previous opposition to mandates, including Proposition 72, which was defeated in 2004, gives him credibility with the business community that creates a better atmosphere for a compromise.

Schwarzenegger’s record of opposing major plans, including employer mandates, single-payer and universal coverage for children, is one reason many are surprised he is now so intent on health care reform.

He has changed course before.

Schwarzenegger blocked low-cost prescription drug proposals for much of his first term before reaching an agreement with legislative leaders on a landmark discount drug program for the uninsured earlier this year.

Democrats say they are ready to make a deal, much like they did this year on issues such as global warming and the minimum wage.
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AT ISSUE: HEALTH CARE COVERAGE

As Gov. Arnold Schwarzenegger seeks to cover the uninsured, he has looked admiringly at the Massachusetts plan. Some analysts say that plan is not a good fit for California.

* Percentage of uninsured residents: California 20.7, Massachusetts 13.1, nationwide 17.8.

* Percentage insured through employer:  California 55.6, Massachusetts 69.4, nationwide 63.2.

 

* Percentage covered by Medicaid/Medi-Cal: California 16.8, Massachusetts 14.5, nationwide 13.3.

Source: California HealthCare Foundation report. Figures are from 2004.