California on Path to Universal Health Program

Democrats in the California legislature unveiled earlier this month a new health care reform program that would provide coverage for most Californians and a plan to pay for it.  

“I think this is a bill that all Californians can be proud of because it provides universal health care; it has the right affordability provisions in it; and it once again sets a gold standard for California,” House Speaker Fabian Núñez of Los Angeles said in a press release. 

But the proposals fall short of Governor Arnold Schwarzenegger’s goal to provide coverage for all Californians. His office indicated that negotiations need to continue. 

“This new proposal helps to move the ball forward and is a step in the right direction,” Schwarzenegger’s Health and Human Services Agency Secretary Kim Belshé said in a statement. “There are still important differences that need to be negotiated, such as ensuring we protect small employers and California jobs."

The Democrats’ proposal is expected to be considered by the full Assembly in December. If that passes, and a compromise is reached with Schwarzenegger, the program would still need to be approved by California voters. 

Still, Nunez and Senate President pro Tem Don Perata of Oakland said their new plan meets the governor “halfway” on other key elements of health care reform.

Specifically, the new health care plan:

• Requires most Californians to carry health insurance, but exempts those who cannot afford it. Affordability is met when the total cost of health insurance is 6.5% or less of a family income;
• Covers all children and parents up to 300 percent of the federal poverty line;  
• Covers all single adults through Medi-Cal up to 250 percent of the federal poverty line;
• Provides individuals with incomes of 250 percent to 450 percent of the federal poverty line not eligible for public programs with an advanceable, refundable tax subsidy to help purchase coverage;
• Ensures that no one earning less than 150 percent of the federal poverty line will be required to pay premiums, co-payments, or deductibles;
• Requires the Managed Risk Medical Insurance Board to establish the minimum benefits package suitable for coverage in California;

• Allows the state to pursue bulk purchasing of pharmaceuticals and require transparency from hospitals. 

Democrats proposed paying for the plan by increasing the tobacco tax by $2 a pack and assessing an employer fee on a sliding scale based on company revenues. The proposal, like the governor’s proposal, would impose a maximum 4 percent fee on hospitals to cover costs. The California Hospital Association has agreed to the fee, provided the money goes back to patient care.