California Lawmakers Merge Health Care Insurance System Overhaul Legislation

Health Care Insurance in California

California Senate President Pro Tempore Don Perata (D) and Assembly Speaker Fabian N ez (D) on Thursday merged their health care proposals into a single bill (AB 8) that would require employers to contribute 7.5% of their payrolls to workers' health coverage, the Los Angeles Times reports. The proposal excludes a requirement that all state residents obtain health care insurance -- a "cornerstone" of Gov. Arnold Schwarzenegger's (R) health care proposal, the Times reports (Rau, Los Angeles Times, 6/22).

Both chambers of the California Legislature earlier this month approved Democratic plans to overhaul the state health care system and provide health insurance coverage for more uninsured residents. Following the vote, Democratic lawmakers and a spokesperson for Schwarzenegger said that they will work during the summer to negotiate a compromise plan.

Schwarzenegger's health insurance plan would levy a 4% fee on businesses that do not provide health benefits to workers. His plan would raise additional funds through a 4% fee on hospitals' gross revenues and a 2% fee on doctors and increase provider rates paid by the state's Medicaid program (Kaiser Daily Health Policy Report, 6/11).

Details

Under the Democrats' merged plan, a state-run insurance pool would be established for high-risk residents and funded by an assessment on health plans. The proposal also would provide premium subsidies to families and children with annual incomes less than 300% of the federal poverty level.

In addition, California's Managed Risk Medical Insurance Board would have the authority to adjust the employer fee to ensure fiscal solvency, according to the Sacramento Bee. Small businesses would not be exempt from contributing to workers' health coverage under the legislation (Rojas, Sacramento Bee, 6/22). Insurers would be required to sell policies to all state residents, "except those with the most serious medical conditions," according to the Times.

Comments

N ez said, "I think our bill is pretty consistent with (the governor's) concept of shared responsibility," adding, "Everyone's got a role to play here. Everyone's got to tighten their belt" (Los Angeles Times, 6/22). According to N ez, "This gives us the entire summer to negotiate whatever aspects of the bill need to be negotiated with the governor and the opportunity to reach out to our Republican colleagues."

However, Schwarzenegger said, "The only way that health care reform is going to work is if you have mandatory health care insurance." According to Assembly Republican leader Mike Villines, the new legislation will "devastate our state's small businesses." He added, "Rather than place the entire burden on California's small businesses, we should embrace common-sense reforms like those introduced by Assembly Republicans that will allow for more choice."

Meanwhile, some health care advocates are "becoming increasingly concerned that neither the governor's nor the Democrats' proposals will withstand legal challenge," the Sacramento Bee reports (Sacramento Bee, 6/22).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.