California To Reach Agreement On Funding For Universal Health Care System

Armen Hareyan's picture

California Gov. Arnold Schwarzenegger (R) and Democratic leaders in the state Legislature are close to a compromise on a bill (AB 8) that would expand health insurance to millions of state residents who lack coverage, the San Francisco Chronicle reports (Chorneau, San Francisco Chronicle, 9/23).

Boththe state Senate and Assembly have passed legislation that would expandhealth insurance to about four million of the estimated 6.8 millionstate residents who lack coverage. The bill would require employers tocontribute as much as 7.5% of their payroll to cover the cost of healthinsurance for employees or pay into a state pool that would providecoverage. The legislation would not require all state residents toobtain health insurance.

Earlier this year, Schwarzeneggerannounced a proposal that would require all state residents to obtainhealth insurance. Under the proposal, employers would have tocontribute about 4% of their payroll or pay into a state pool. Theproposal also would require hospitals to pay fees to help distributecosts. Both the bill and the proposal would include an expansion ofstate health insurance programs and would require health insurers tospend 85% of premiums on health care (Kaiser Daily Health Policy Report, 9/12).

Almost No Formal Opposition


According to the Chronicle,as the negotiations on a compromise near completion, "formal oppositionto reforms already outlined by the two sides is almost nonexistent,"and health insurers and physicians groups have not launched "attackads" that "many feared would have materialized by now." In addition,large "protests from labor unions or consumer groups intended to pushthe talks one direction or another have also been largely put on hold,"and "traditional critics of health care reform have been careful not tospeak too harshly or too publicly given the stakes involved," the Chronicle reports.

Inthe event that Schwarzenegger and Democrats reach a compromise, any newtaxes or fees to fund the proposal likely would have to receiveapproval from voters on the statewide ballot in November 2008 becauseRepublicans oppose them. Passage of legislation to implement such taxesor fees would require approval from a two-thirds majority of the stateLegislature and would need some support from Republicans (San Francisco Chronicle, 9/23).


Aaron McLear, press secretary for Schwarzenegger, said, "We hope tohave a bill very, very soon. It's just a matter of closing the last fewinches." State Assembly Speaker Fabian N. (D) said, "The mainsticking point, as it always is, is the funding formula, and where isthe revenue stream," adding, "I think I see light at the end of thetunnel." He said, "I think the insurance industry has got to take ahaircut. The hospitals pay a fee. Employers pay a fee. Workers pay ashare. And then we're going to have to go out and hustle the voters fora sales tax to make up for the difference" (Washington Post, 9/24).

Beth Capell, a lobbyist representing the Service Employees International Union,said, "I think there's determination and desire not to lose thisopportunity. I have to give the administration and the legislativeleaders credit for keeping the doors open and a flow of informationgoing so that there are alternatives to open warfare."

Allan Zaremberg, president of the California Chamber of Commerce,said, "People do not want to keep fighting this forever," adding,"That's why you are not seeing anyone saying, 'We don't want anything.'I don't think that's an appropriate response even for people who may bein the crosshairs of this. We just want to make sure it works" (San Francisco Chronicle, 9/23).

Reprinted with permission from Youcan view the entire Kaiser DailyHealth Policy Report, search the archives, and sign up for email deliveryat The Kaiser Daily Health Policy Report is published for, afree service of The Henry J. Kaiser Family Foundation. 2007 Advisory BoardCompany and Kaiser Family Foundation. All rights reserved.