Feasibilty and Health Care Reform

The negotiations over health care reform have begun in earnest again. Arnold stated yesterday that he would not support the Democratic plan AB8 for two reasons. He will not sign legislation that does not require Californians to have insurance (individual mandate) and relies on just a payroll fee for financing coverage. Arnold favors his proposal, which would require hospitals and doctors to bear part of the fiscal responsibility for expanding access to health care.

Here is the thing, his plan just isn't politically viable in the legislature. By most indications, requiring doctors and hospitals to pay would necessitate a tax. Passing a tax increase requires a 2/3rds support in the legislature. There is absolutely no way that you could get even a single Republican to vote for it, especially in the wake of the budget impasse (not that anyone thought it was possible before). The only way for it actually make it into law would be a ballot initiative. LAT:

"The governor -- with all due respect, and I love him because he's a good friend of mine -- he has to start operating in the same world that I'm operating in, which is the real world," said Assembly Speaker Fabian Nuñez (D-Los Angeles).

"In the real world that I live in, I can control and manage a simple majority bill," Nuñez said -- one that does not require GOP support as a tax would.

Schwarzenegger, however, continued to assert that Republicans could be swayed. He said that although budget negotiations were "a tedious process that drove a lot of people up the wall and anger and everything, in the end, that's not the definition of accomplishment or failure."

"The definition of accomplishment or failure is, can we get the reform done or not?" he said.

It's not that Nunez does not want Republican support for major health care reform, it is that he recognizes that it is next to impossible. Much of what the Republicans support simply tinkers around the edges and sticks to their free market philosophy. That is what we have right now and it isn't working. Unfortunately, Arnold's relationship with them is so soured that it is next to impossible to imagine him being able to convince them for the need to significant reform.

Meanwhile, while Arnold stopped by the AARP rally yesterday outside the Capitol, he has not been meeting with the Democratic leadership to try and hammer out an agreement. Instead, he has been seeking to influence the debate by speaking to the press. SacBee:

Spokesmen for Perata and Núñez called on Schwarzenegger to meet in earnest to reach a compromise, suggesting that the governor has yet to do so.

"When the governor decides to roll up his sleeves and engage with the speaker and Senator Perata, we are confident we can resolve the minor differences we have and complete comprehensive health care reform," Núñez spokesman Steven Maviglio said in a statement.

Admittedly, in some ways AB8 is less ambitious than Arnold's proposal, but it is much more practical. It goes much further in ensuring health insurance will be affordable, not simply mandated. Having insurance is no good, if you cannot afford to use it.

Anthony Wright, in a much re-posted blog post notes how diverse the funding for AB8 actually is and undercuts the governor's contention that it is too reliant on employers.

AB8(Nunez), like the Governor's plan, includes a minimum employer contribution to health care, but has much more than that. It also includes (as does the Governor's plan):
* expansion of public programs for children and parents;
* draw-down of significant federal Medi-Cal matching funds;
* required individual take-up in employer coverage and the statewide purchasing pool;
* rules on insurers requiring 85% of premiums to go to patient care;
* limits on insurers denying people because of "pre-existing conditions";
* major expansion of use of federal and state tax breaks for individual premiums;
* cost containment provisions on information technology, transparency, and prevention.

AB8(Nunez/Perata) includes financing from several sources, including:
* individual contributions, in share of premiums and out-of-pocket costs;
* employer contributions, capped at 7.5% of payroll;
* reinvested state savings;
* federal Medi-Cal matching funds; and
* new use of federal and state tax breaks.

We have what 16 days left in the legislative calendar? It's time to get a move on. Arnold has left open the possibility of calling a special session, but there is no reason to rely on that.