California House Approves Mandatory Health Plan

California is a step closer to mandating healthcare coverage for all its citizens.

The House Assembly voted 46-31 Monday along party lines to approve a compromise bill negotiated by Republican Gov. Arnold Schwarzenegger and House Speaker Fabian Nunez that will extend health coverage to millions of uninsured Californians, including all children. Republicans rejected the proposal that took more than a year to craft.

"With the Assembly’s courageous vote just a short time ago, we are closer than ever to fixing our broken health care system,” Schwarzenegger said during a joint press conference with the Democrat leadership.

Nunez agreed, adding, “We’re not done yet, but we’re one step away. … Ultimately the final test will be the voters of the state of California in November.”

The Senate is expected to consider the bill after the holidays. If approved and signed by the governor, voters will be asked to approve a funding mechanism in November that calls for employers to spend between 1 percent and 6.5 percent of their payroll on health care, assess a fee on hospitals, and increase the tobacco tax to at least $1.50 per pack of cigarettes.

Although Schwarzenegger worked with House and Senate leaders on the plan, Senate President Pro tem Don Perata said last week that he is "very concerned" about the impact the plan will have on California’s projected $14 billion deficit. In a statement Monday, Perata said he has asked the legislative analyst to examine the long-term fiscal impacts of the legislation on the state’s general fund.

“This analysis, combined with the governor’s proposed budget, will help determine how we can move forward in a fiscally responsible manner,” Perata said.

If the plan does become law, nearly every Californian will be required to have insurance coverage beginning in 2010. Subsidies and tax credits will be provided to those who can’t afford the premiums and insurers will be barred from denying coverage to people because of existing medical ailments. Insurers also will be required to reinvest 85 cents of every dollar collected from health care premiums back into patient care.