From the Los Angeles Times
Gov., Nuñez forge a health plan
The Legislature will now take up the complicated,
expensive accord. It may go on November state ballot.
By Jordan Rau
Los
Angeles Times Staff Writer
December 15, 2007
SACRAMENTO -- — After
nearly a year of often tortuous negotiations, Gov. Arnold Schwarzenegger and
Assembly Speaker Fabian Nuñez have settled on a plan to extend health insurance
to 3.6 million Californians who lack it through a new tax on all employers and
tobacco sales, officials said Friday.
The leaders have agreed to ask
voters in November to require employers to spend between 1% and 6.5% of their
payroll costs on healthcare. The measure would also levy a tax on tobacco sales
of at least $1.50 a pack, although it could be as high as $2 a pack, the aides
said.
"It's an incredible plan," Nuñez (D-Los Angeles) said in an
interview. "I couldn't tell you there is one single outstanding issue that is a
make-or-break issue."
Daniel Zingale, a senior advisor to Schwarzenegger,
said the leaders "have agreed on the framework of the healthcare reform that
will go before voters."
Nuñez's office on Friday filed a companion bill
that contains the details of how the plan would work and scheduled an afternoon
vote in the Assembly on Monday, presuming a few details will be resolved over
the weekend.
That bill does not contain the taxes or other measures that
would provide the $14 billion a year needed to finance the ambitious overhaul
and would not take effect unless the ballot measure passed. That puts Democratic
lawmakers in the highly unusual position of voting on the plan without being
able to assess whether the intricate financing scheme will be adequate.
Republicans have vowed to vote against the measure.
The moves came as
Schwarzenegger promised to call an emergency session of the Legislature for
early January to make cuts to the state's budget. The governor's office
estimates the projected gap may reach as high as $14 billion by July 2009, which
is threatening to sap political momentum from the healthcare plan.
On
Thursday, Senate President Pro Tem Don Perata (D-Oakland) said that while he
supported most of the Nuñez- Schwarzenegger plan, he intends to delay a Senate
vote on the measure until the governor outlines how his proposed budget cuts
will affect existing healthcare programs for the poor and disabled
The
Nuñez-Schwarzenegger plan would require almost all Californians to obtain
private medical insurance. Those earning below 2 1/2 times the poverty level --
or $51,625 for a family of four -- would receive state subsidies to pay for most
of their premiums.
Families earning more than that but no more than four
times the poverty level -- $82,600 for a family of four -- would be able to
fully deduct any premium costs that exceed 5.5% of their incomes, which
translates to $4,543 for a family at the top of that range. There would also be
tax credits for people who retire before they qualify for Medicare at age 65 so
that they would not spend more than 10% of their savings on
insurance.
Under the plan, California employers with payrolls of up to
$250,000 a year would have to spend at least 1% on healthcare for their workers.
Those that didn't would pay into a state-run health insurance pool that would
help secure coverage for the employees. Companies with payrolls up to $1 million
would have to pay 4% and those with payrolls up to $15 million would have to pay
6%. All larger companies would pay 6.5%.
The plan would extend coverage
to 800,000 low-income children and many impoverished adults who currently do not
qualify for public programs. It would omit about 1 million illegal immigrants as
well as another 500,000 people who are poor but either refuse public coverage or
cannot document that they are legal residents.
The bill the Assembly
will consider Monday would upend the way California's insurance market works.
Insurers would be barred from denying coverage to people because of existing
medical ailments and would have to spend at least 85% of premiums on medical
care.
Many insurers, including Kaiser Permanente and Blue Shield of
California, have supported this approach for months, but the state's largest
insurer, Blue Cross of California, is preparing to fight the ballot measure.
The plan also contains a $2.3-billion tax on hospitals, supported by the
industry, that would pay for increased MediCal payments to doctors and
institutions that treat the poor. That tax would also qualify California to draw
another $2.3 billion from the federal government.
Those involved in the
negotiations said the only major piece still to be ironed out is the tax on
tobacco. Schwarzenegger and Nuñez have been negotiating with the tobacco
companies to see if they can craft the provision in a way that will win their
acquiescence, if not their support. But aides said they are also still
discussing whether $1.50 a pack will be enough to fund the plan, or whether they
will need $2 a pack -- an amount tobacco industry leaders say they will
oppose.
We "don't think funding expanding programs with a declining
revenue source makes sense," said David Sutton, a spokesman for Philip Morris
USA in Richmond, Va.
Perata also expressed major reservations about the
tobacco tax, and said that provisions being insisted upon by the tobacco
industry, including immunity from civil and criminal lawsuits, would doom the
deal.
The California Nurses Assn., which has favored replacing private
insurers with a state-run provider of medical coverage, said the bill was being
pushed through the Legislature. "Just as with the energy deregulation fiasco,
legislators are being rushed into voting in the dark on a sweeping bill with
massive loopholes and serious financial ramifications that no one has adequately
reviewed," said Donna Gerber, chief union lobbyist.
Even some supporters
of lawmakers' efforts were worried that the broader political climate would be
insurmountable.
Bob Ross, president of the California Endowment, a Los
Angeles-based foundation that favors expanded healthcare, cited as obstacles the
state's weakening economy, the budget gap and the continued standoff between
President Bush and the Democratic-led Congress about expanding federal health
insurance for children.
"When you do the math on that set of realities,
it doesn't bode well," Ross said. "So it comes as welcome news that the governor
and the speaker are fighting and trying to get something done."
jordan.rau@latimes.com
Times
staff writer Nancy Vogel contributed to this report.