Senate Committee To Consider California Health Care Proposal

Depending on alternativefinancial scenarios, compromise health care legislation (ABX1 1) negotiated byCalifornia Gov. Arnold Schwarzenegger (R) and state Assembly Speaker FabianNunez (D) could be adequately financed, or it could result in a $4 billionbudget shortfall within five years, according to a report released Tuesday bythe state Legislative Analyst's Office, the Sacramento Bee reports.

The report by Legislative Analyst Elizabeth Hill was requested by state SenatePresident Pro Tempore Don Perata (D), who delayed a vote on the plan until itsimpact on California's projected $14.5 billion state budget deficit wasanalyzed (Rojas, Sacramento Bee, 1/23). The state Assemblyapproved the measure last month (Kaiser DailyHealth Policy Report, 12/28/07). Schwarzenegger, Nunez andother supporters of the bill say that the proposed $14 billion plan would notaffect the state budget (Sacramento Bee, 1/23).

Hill said the state's estimated cost for subsidizing health care coverage isbased on monthly premiums of $250 per person. If the actual cost is closer to$300, there could be a $1.5 billion shortfall within five years.

According to the San Francisco Chronicle, the report also found that:

• Annual costs of the $14 billion overhaul would increase by $300 million by the program's fifth year, and by $1 billion after 2015, if the increase in health care costs has been underestimated by as little as 0.5% annually;
• $1 billion in federal funding for the program is uncertain; and
• The number of uninsured California residents is likely to increase in the coming months if the economy slows down, increasing costs.

Senate Health CommitteeTo Hear Bill

The report was released onthe eve of a scheduled hearing on the health care overhaul measure by the stateSenate Health Committee (Chorneau, San Francisco Chronicle, 1/23). TheHealth Committee has 11 members and needs six votes for the legislation topass. Five members are Republican, and "all but one," state Sen. AbelMaldonado, "are sure to vote against the bill," the Los Angeles Times reports. Democratic state Sen.Sheila Kuehl, chair of the committee, has said she will not support themeasure, and another committee member, state Sen. Leland Yee (D), announced onTuesday that he will vote against the plan (Rau, Los Angeles Times,1/23).

In announcing his opposition, Yee said, "Californians should be extremelyskeptical of a law which requires them to purchase insurance but allowsinsurance companies to charge any amount for the policy." He added thatthe plan "is not a step in the right direction but a huge jump backwardsfor California's working families without insurance" (Lawrence, AP/Los Angeles Daily News, 1/22).

Sources close to Perata said he wants the state Senate to pass the bill and isconsidering adding several new members to Wednesday's committee hearing tocreate a majority in favor of the measure, according to the Times.The Senate leader also could use other incentives to pressure lawmakers tochange their votes, the Times reports (Los Angeles Times,1/23).

On Wednesday, the Times featured a Q&A with Kuehl. Inthe interview, she said the compromise health care reform bill "shouldstand or fail on its own," without any amendments by the state SenateHealth Committee. "This bill has a long road to go," Kuehl said (LosAngeles Times, 1/23).

Reprintedwith permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health PolicyReport is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.