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November 25, 2014 | 3rd Kislev 5775

Schwarzenegger's Plan for Universal Care Draws No Universal Agreement

January 10, 2007

New York Times

By Jesse McKinley

SAN FRANCISCO, Jan. 9 — When Gov. Arnold Schwarzenegger took the oath of office last Friday, he called on legislators in Sacramento to set aside party loyalty in favor of “the Party of California.”

And sure enough, just 96 hours later, Democrats and Mr. Schwarzenegger’s fellow Republicans are already in agreement: his first big idea of his second term — a sweeping plan unveiled Monday to assure health care to all Californians — is promising and ambitious, but faces a long, hard fight before enactment.

Chief among the challenges, politicians and policy analysts said Tuesday, is the enormous number of political players — from big labor and big insurance to small-county government — that would be affected by any universal health care bill.

“I cannot think of another topic that requires so many people to be heard to build consensus,” said one Democratic lawmaker, Don Perata, Senate president pro tem. “You’d have to rent out Madison Square Garden to get them all in there.”

Mr. Schwarzenegger’s plan would extend care to the 6.5 million Californians who currently have no insurance, including an estimated one million illegal immigrants. That is just one of the elements to which Republicans are objecting.

“Health coverage for illegal aliens is a nonstarter for us,” said Robert Huff, chairman of the Assembly’s Republican caucus. “It creates a magnet for them coming here rather than staying there.”

Like some Democrats, Mr. Huff was also skeptical about the plan’s estimated cost, which the governor’s office put at $12 billion a year. “I think it’s just throwing a dart at the wall,” he said. “It’s anybody’s guess what it would cost.”

Then there is the financing, which among other things would require doctors and hospitals to pay 2 percent and 4 percent of their revenue, respectively, into a fund to cover the poor and uninsured. Mr. Schwarzenegger calls those payments a “fee,” but other Republicans said that was just another word for “tax.”

The California Medical Association, which represents more than 34,000 doctors in the state, gave the proposed overhaul mixed reviews. Though the association praised the idea of universal coverage, the fee on doctors could be a deal breaker.

“We feel it’s a regressive tax,” said Dr. Anmol Singh Mahal, the group’s president.

The distinction between fee and tax is more than semantic: under California law, fees can be adopted by a simple majority vote of each house of the Legislature, while new taxes require a two-thirds majority. Democrats control both houses but do not have enough votes to muster two-thirds without Republican help.

Anticipating a raucous health-care debate in the Legislature this year, Mr. Schwarzenegger noted in his State of the State address on Tuesday night that proposals other than his had been advanced, and said that “they are all on the table.”

Kim Belshé, the state’s health and human services secretary, said the governor had expected people to disagree with elements of his plan.

“Health care reform is hard,” Ms. Belshé said. “If these were issues that were easy to address and solve, they would have been addressed and resolved long ago.”

Building consensus will be especially important for Mr. Schwarzenegger because of the referendum-addicted nature of California, where laws passed by the Legislature are sometimes overturned by ballot initiatives. In 2004, voters voided one ambitious health care law, the Health Insurance Act, which would have required medium- and large-size employers to offer care to their workers or pay a fee to the state.

Mr. Schwarzenegger’s plan would employ similar “play or pay” mechanisms: employers with more than 10 workers would have to offer insurance or pay 4 percent of wages that are subject to Social Security tax into a fund subsidizing the purchase of health care for the uninsured.

Ms. Belshé said the state also expected to pay for the program in part through billions of federal dollars that California would get by increasing its Medi-Cal reimbursements to doctors and hospitals. The increase would automatically bring federal matching funds.

Such increased payments would be critical to health care providers, said C. Duane Dauner, the president of the California Hospital Association, because they would offset the new “fees” — or are they taxes? — the governor has proposed for doctors and hospitals.

Mr. Dauner said he thought the plan was “very innovative” but stood little chance of passing as is.

“I don’t care what the plan is or who introduces it, whether it be the governor of California or the president of the United States,” he said. “It goes through a process.”

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