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Sacramento Bee
April 10, 2006
By Clea Benson
Massachusetts Gov. Mitt Romney on Wednesday
plans to approve a universal health insurance bill so
popular with both Republicans and Democrats in his state
that he's issuing tickets for the signing ceremony at
Boston's historic Faneuil Hall.
It's unclear whether Massachusetts' proposed bipartisan
solution to the health care crisis will actually work.
It mandates that individuals, employers and government
must each shoulder added responsibility so that everyone
can have coverage.
But Massachusetts lawmakers are winning applause nationally
for moving forward with a plan while states like California
remain deadlocked over the best way to solve the problem.
"I think there are some really positive lessons
from the Massachusetts experience," said California
Health and Human Services Secretary Kim Belshé. "No.
1, politically, Republicans and Democrats can come together
and reach consensus around what truly is one of the most
complicated and difficult policy issues facing the nation."
California lawmakers this year are considering a long
list of health care bills with approaches ranging from
creating a government-run, single-payer system to giving
people tax breaks on health savings accounts, an individualist
approach favored by the Bush administration. Like the
Massachusetts plan, two different California bills would
require state residents to have health insurance or pay
penalties.
So far, there appears to be little common ground.
"Everyone has their own ideas about reform and
they're very invested in that idea," said Peter
Harbage, a health policy expert at the New America Foundation,
a think tank that favors a bipartisan approach like the
one enacted in Massachusetts. "Everyone's second
choice in terms of reform is the status quo. And that's
why you end up with the gridlock in California. You just
have to figure out how to crack that code to move forward."
No one in California government disputes that something
needs to be done. There are 6.3 million people, about
one in five state residents, without health insurance
here - a number roughly equal to the entire population
of Massachusetts. Health care costs are continuing to
rise, and increasingly, leading employers are dropping
health benefits.
People without insurance end up seeking medical treatment
in hospital emergency rooms, driving up overall health-care
costs for everyone else when they can't pay their bills.
The state and federal governments also spend billions
of dollars a year in subsidies to California hospitals
to help offset care for the uninsured.
The Massachusetts legislation would attack the health
care problem several ways: State residents who do not
get insurance through their jobs will be required to
buy insurance if they make more than a certain income
level - $60,000 for a family of four. The bill would
enact insurance reforms to reduce the cost of insurance
for people who are required to buy it. It would expand
government programs that cover the poor and people with
moderate incomes. And it would charge businesses that
don't provide insurance $295 a year for each employee.
Romney, a Republican, said he might veto the last provision.
There are some key differences between Massachusetts
and California that present unique challenges here, Belshé and
Harbage said.
For one thing, the proportion of the population that's
uninsured in California, about one in five, is about
double the proportion of the population that's uninsured
in Massachusetts. While about 66 percent of private employers
provide health insurance in Massachusetts, only about
56 percent offer insurance in California, placing a greater
burden on public services.
And California's uninsured have a much higher poverty
rate, making it likely that any universal coverage program
would have to provide government subsidies for a greater
proportion of the population.
Still, some lawmakers are embracing the many-layered
approach. Assemblyman Keith Richman, R-Northridge, and
Assemblyman Joe Nation, D-San Rafael, introduced a bill
last year that would have provided tax credits to employers
for private coverage and implemented tax penalties for
Californians who didn't have insurance if they could
afford it. It died quickly. This year, both members have
introduced similar bills.
"Many of the provisions of the Massachusetts reform
are very similar to what Joe Nation and I proposed," said
Richman, attributing the failure of last year's effort
to partisan gridlock. "It's an uphill battle here
in the Legislature."
Advocates for mandatory insurance say many of the uninsured
can afford it. According to the California Health Care
Foundation, about one-third of uninsured state residents
have family incomes over $50,000. And about one in 10
workers who is eligible for insurance at work - usually
young, healthy people - turns it down because he or she
doesn't want to pay the premiums.
Meanwhile, Sen. Sheila Kuehl, D-Santa Monica, and some
other Democrats are pushing a single-payer system that
would put everyone in a state-run program. A patchwork
approach that requires people to buy insurance won't
work, said Kuehl, author of Senate Bill 840.
"None of these plans that require people to have
insurance do anything to make the insurance affordable," Kuehl
said. "If they call something affordable, it's only
because it's inadequate. ... They have very high deductibles
or they cover very little."
California lawmakers did approve one dramatic health
care solution when they passed Senate Bill 2 in 2003,
mandating that all large employers in the state provide
health insurance. But voters repealed the law a year
later by defeating Proposition 72 in a campaign largely
financed by restaurant and retail chains.
Kuehl sees her solution as the logical next step after
SB 2.
"Every Californian has to pay in (to a single-payer
system), but the fact that the state health plan also
is a single payer for the services allows us to cut back
on the administrative costs by a good $10 billion a year," she
said.
Kuehl's plan carries a $100 billion price tag. Republican
lawmakers say that's too much. And they oppose the idea
of a government program. Instead, a group of Republican
lawmakers last week unveiled a list of bills that would
make health care more affordable through tax credits
and deductions.
Whether the Legislature is able to reach a consensus,
the state is taking some incremental steps.
Gov. Arnold Schwarzenegger is seeking to expand the
number of insured children in the state by spending about
$70 million on efforts to increase enrollment of those
who are currently eligible for government programs. A
new deal with the federal government will provide funds
for expanding the number of people who are eligible for
public programs like Medi-Cal.
"The problem of the uninsured is of such magnitude
and complexity that it is impossible to think any one
equation is going to address the problem," Belshé said. "It
can't all be about individual responsibility. It's can't
all be about government. And it can't all be about employer
obligations."
Health care bills
Legislation under consideration in the Legislature:
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Senate Bill 840. Author: Sen. Sheila Kuehl, D-Santa
Monica. Would cover all Californians with a health-care
system run by the state.
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Senate Bill 1414. Author: Sen. Carole Migden, D-San
Francisco. Aimed at Wal-Mart, would require employers
with more than 10,000 employees to spend at least
8 percent of their payroll costs on employee health
care.
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Senate Bill 1584. Authors: Sens. George Runner,
R-Lancaster, and Dick Ackerman, R-Irvine. Assembly
Bill 2010. Author: Assemblyman George Plescia, R-La
Jolla. Both bills would allow the same tax deduction
on state income tax returns for a health savings
account as is allowed on federal taxes.
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Senate Bill 1672. Author: Sen. Abel Maldonado,
R-Santa Maria. Would give a tax break to medical
providers for investments in information technology.
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Assembly Bill 1952. Author: Assemblyman Joe Nation,
D-San Rafael. Would require individuals to have insurance
and would require employers to provide insurance.
Would create a purchasing pool run by the state through
which Californians could purchase low-cost insurance.
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Assembly Bill 2450. Author: Assemblyman Keith Richman,
R-Northridge. State residents would be required to
have health care coverage. Would create purchasing
exchanges to provide lower-cost insurance to people
who don't get benefits through their jobs. Would
provide subsidies to help some employers offer health
benefits.
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Assembly Bill 2737. Author: Assemblyman Alan Nakanishi,
R-Lodi. Would institute a 15 percent tax credit for
employer contributions to high-deductible health
plans, which are used in conjunction with health
savings accounts.
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