Wednesday, January 02, 2008 State
Watch
Schwarzenegger, Nunez Submit Ballot Initiative for
Health Care Reform Proposal
California Gov. Arnold Schwarzenegger
(R) and state Assembly Speaker Fabian Nunez (D) on Friday submitted to the
state attorney general a proposed ballot initiative for the November 2008
elections that would provide the funding mechanism and other changes
necessary to enact their plan to overhaul the state's health care system,
the Los Angeles Times reports. The submission
"sets the stage for what is expected to be a costly and contentious battle
pitting the two state leaders and their allies against some powerful
opponents," according to the Times (Rothfeld, Los
Angeles Times, 12/29/07).
The proposal, approved by the
California Assembly last month, would require most state residents to
obtain health coverage. Under the bill, residents with incomes up to 250%
of the federal poverty level would receive state subsidies for coverage,
and residents with incomes up to 400% of the poverty level would receive
tax credits to ensure that health care premium costs do not exceed 5.5% of
their incomes. Insurers would be prohibited from denying coverage to
residents because of pre-existing medical conditions (Kaiser Daily Health Policy Report, 12/21/07).
The ballot initiative submitted by Schwarzenegger and Nunez would
ask voters to approve about $9 billion in fees and taxes to partially fund
the $14 billion plan. The remaining funding would come from the federal
government, consumer premiums and copayments (Chorneau, San Francisco Chronicle, 12/29/07). The
initiative would nearly double the state tax on cigarettes to $1.75 per
pack, from 87 cents per pack, in mid-2009. The initiative also includes an
employer requirement that ranges from 1% to 6.5% of their payrolls,
depending on the level of payroll. Funds raised by this fee would go into
a new California Health Care Trust Fund to assist state residents who find
insurance unaffordable. The initiative specifies that funds directed to
the health care trust fund only could be used for the specified purpose.
In addition, the initiative would:
- Specify the process by which programs would be
suspended if the state encounters insufficient funding;
- Levy new fees on hospitals; and
- Approve a $25 million loan from the state's
general fund to provide funding to families with children who will be
dropped from city or county health care programs during the transition
to the state program (Los Angeles Times, 12/29/07).
Process
Submitting the measure to the attorney general "is
the first step" in qualifying it for the ballot, according to the
Chronicle. The attorney general has seven weeks to review the
initiative, assign it a formal title and write a summary that can be
distributed to voters. Schwarzenegger and Nunez likely will need
signatures from more than one million registered voters.
In
addition to approval of the ballot measure, supporters of the health care
proposal need to pass legislation (AB1X) that would make changes to the state and local
government to allow the new health care system to operate. State Senate
Pro Tempore Don Perata (D) has delayed a vote on the bill until
mid-January, after a financial analysis is completed. If the bill is
amended in a "substantial way, a new initiative would have to be drafted
and the attorney general would have to begin his review again -- costing
backers of the plan precious time," according to the
Chronicle. The Chronicle reports that for
supporters of the reform proposal, "time is running short to qualify the
measure for the ballot and then effectively campaign for its passage"
(San Francisco Chronicle, 12/29/07).
Problems With ERISA
The Christian Science Monitor on Monday examined
how California leaders "are pushing forward with a health care reform
effort ... despite an ominous legal ruling last week" that found that a
San Francisco health care program violated the 1974 Employee Retirement
Income Security Act by requiring employers to spend a specified amount of
money on health programs for their employees. ERISA prevents state and
local governments from meddling with employer-provided benefits. The
ruling "reiterates the almost Sisyphean nature of health care reform at
anything but the national level," and the submission of the ballot
initiative by Schwarzenegger and Nunez "signal[s] they are still willing
to try to push the boulder back up the hill," the Monitor
reports (Arnoldy, Christian Science Monitor, 12/31/07).