Tuesday, November 06, 2007 State
Watch
California Democrats Announce New Health Care
Proposal That Includes Coverage Mandate
California Assembly Speaker Fabian Núñez
(D) on Monday announced a revised health care proposal that would require
nearly all residents to obtain health care coverage and increase the state
tobacco tax, the San Diego Union-Tribune reports (Ainsworth,
San Diego Union-Tribune, 11/6). State Senate President Pro
Tempore Don Perata (D) is expected to join Núñez at a news conference on
Tuesday to officially release the health care bill (Chorneau, San Francisco Chronicle, 11/6). The revised
bill comes eight weeks into the special legislative session on state
health care reform and signals an effort by Democratic leaders to reach a
compromise with Gov. Arnold Schwarzenegger (R) (Rojas, Sacramento Bee, 11/6).
Under the new
plan, nearly all residents would be required to obtain health coverage,
"the cornerstone of Schwarzenegger's plan," according to the San Jose Mercury News. Residents who would
have to spend more than 6.5% of their family income on health -- including
copayments, deductibles and premiums -- would be exempt from the
individual coverage mandate, according to the plan (Zapler, San Jose
Mercury News, 11/6).
The Democrats' proposal also would
expand public health care programs to families with incomes up to 300% of
the federal poverty level and provide tax subsidies to individuals with
incomes between 300% and 450% of the poverty level. Individuals with
incomes between 150% and 300% of the poverty level would be exempt from
paying insurance premiums and deductibles (Sacramento Bee,
11/6). In addition, families with incomes up to 450% of the poverty level
would receive a tax credit for the portion of premium costs that exceed 5%
of their incomes (Rau, Los Angeles Times, 11/6).
Funding
State Democrats also revised funding mechanisms for
the proposal. Under the new plan, employers would be required to pay a
minimum of 2% to 6.5% of payroll towards health insurance, depending on
the level of payroll. Schwarzenegger has proposed that employers pay zero
to 4% of payroll based on a similar scale, while Democrats had previously
proposed a 7.5% of payroll threshold (Sacramento Bee,
11/6).
The Democrats' revised plan also would increase the state
tobacco tax from 87 cents per pack to $2.87 per pack to fund health
insurance subsidies (Rau, Los Angeles Times, 11/6). The tax
increase would generate $2 billion annually, but revenue would decline as
more people quit smoking, according to the Union-Tribune
(San Diego Union-Tribune, 11/6).
In addition, state
Democrats' plan would require hospital contributions to help the state
qualify for several billion dollars in additional federal funding. The
money would be used to help hospitals cover treatment costs for low-income
patients. The new proposal also would require hospitals and insurers to
provide more transparency in their costs -- provisions that were in
Democrats' original bill, which was vetoed by Schwarzenegger. The Assembly
will hear the Democrats' new proposal on Nov. 14 (Rau, Los Angeles
Times, 11/6).
Reaction
Aaron McLear, spokesperson for Schwarzenegger, said
the Democrats' revisions are "a fairly positive movement." He added, "We
look forward to seeing the details of the proposal but understand there
are still issues to be resolved" (Sacramento Bee,
11/6).
Richard Frankenstein, president of the California Medical
Association, said the Democrats' "proposal could break the logjam on
health care reform discussions" (San Diego Union-Tribune,
11/6). He added that a proposed tobacco tax increase to fund health care
reform is a "commonsense" approach.
Núñez said, "I'm expecting the
governor to sign on to this ... This is more than a gesture of good will."
He added, "There's no reason why anybody in their right mind would want to
oppose this" (San Jose Mercury News, 11/6).
State Budget
In related news, Schwarzenegger on Monday
directed state agency leaders to reduce fiscal year 2008-2009 budgets by
10%, a move that political analysts say could delay his health care reform
proposal, the Los Angeles Times reports. State revenue is
coming in below projections, in large part because of the decline in the
housing market and related drops in state income tax revenue. California's
budget deficit for the upcoming fiscal year could be as high as $10
billion.
Adam Mendelsohn, a spokesperson for the governor,
declined to answer questions about the order but said budget talks were
ongoing. Mendelsohn said that California needs to proceed with the
governor's agenda regardless of the budget situation, adding, "The
question people have to ask themselves is what will happen to the economy
without a water plan. The failure of our health care system is costing
taxpayers money" (Halper, Los Angeles Times, 11/6).