Schwarzenegger Leads on California Health Reform

California Governor Arnold Schwarzenegger has called state lawmakers back to Sacramento for a special session in hopes of hammering out a deal on the governor's ambitious $12 billion universal health care plan for California.

In recent weeks, Schwarzenegger has been lobbying the state's business leaders to back his health care initiative that would cover roughly 6.5 million uninsured residents. On Monday, the Los Angeles Area Chamber of Commerce, which boasts 1,500 members, endorsed the plan, potentially providing the Republican governor with enough support to win over other pro-business organizations that have been reluctant to support the reform package because it would require raising taxes.

"What everyone wants, and what we all want, is access to health care so it is affordable and so that everyone can have health care, and no one ever has to worry about it again," Schwarzenegger said in Los Angeles last week.

However, Schwarzenegger still faces opposition from the state's Republican lawmakers who opposed raising taxes or forcing hospitals to pay a surcharge to finance the deal. But an agreement in principle has been reached between the governor and the Democratic majority leadership in the state legislature that would see some of the proposals approved during the special session. Other measures would be placed on a ballot initiative next year and voters would be asked to support new taxes that would raise billions of dollars to pay for the health care package.

The special session affords Schwarzenegger the time to try and come to some sort of agreement with state lawmakers before the regular session begins in January and the legislature takes up other matters.

According to a recent U.S. Census Bureau report, approximately 6.7 million Californians - more than ever before - are uninsured. A report released this week said health insurance premiums continue to take more money out of families' pocketbooks and employers' bottom lines - at a rate faster than wage growth or inflation.

Schwarzenegger's plan calls for all Californians, including children, to have at least minimum health care coverage - a $5,000 deductible plan with a maximum of $7,500 out-of-pocket limits for one person and $10,000 for a family. Employers with ten or more employees would be required to spend at least four percent of payroll on employee health insurance or pay an equivalent amount into a state purchasing pool. Doctors would pay two percent of revenues and hospitals would pay four percent of revenues to the state.

Schwarzenegger heavily lobbied hospital executives to support the plan, which would levy a tax on hospitals allowing California to become eligible for $2 billion in federal aid to offset the costs of the plan. The powerful California Hospital Association said it would support the proposal.

But the sticking point appears to be political.

Last week, Assembly Speaker Fabian Núñez, a Democrat, said he wasn't sure whether voters would support the plan particularly if it means implementing new taxes on residents, fearing it could cost Democrats votes at the polls next year.

"We will have enough time to go out and do some polling. We've got to consult with the voters of California to see what works and what doesn't work," Núñez said during news conference last week. "Will the voters support, for example, doing a hospital fee and some other type of a fee such as a sales tax. We need to test all these things to make sure that if and when we go to the voters in an election, that we go to them with a product that we know at least has a fair chance of passage."

A bill backed by Democrats to overhaul the state's health care system was approved by lawmakers last week on a party-line vote, but Schwarzenegger said he would swiftly veto the legislation because the bill fails to cover everyone in the state, does not protect consumers, forces businesses to pay 7.5 percent payroll tax and allows health care providers to deny coverage.

"I applaud all the hard work that has gone into efforts to reform California's health care system, but I cannot sign AB8 because it would only put more pressure on an already broken health care system," he said in a statement. "We must keep working until we achieve the kind of historic solution that all of us and the people of California want."

Jason Leopold is senior editor and reporter for Truthout. He received a Project Censored award in 2007 for his story on Halliburton's work in Iran.

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