Efforts To Overhaul California Health Care System Could Have National Implications, Panelists Say

Efforts by California lawmakers to overhaul the state's health care system were unsuccessful but could have national implications for restructuring the U.S. health care system, according to panel members at a New America Foundation forum on Friday, CQ HealthBeat reports (Mattingly, CQ HealthBeat, 3/10).

The California proposal would have required most state residents to obtain health coverage. Under the bill, residents with incomes up to 250% of the federal poverty level would have received state subsidies for coverage, and residents with incomes up to 400% of the poverty level would have received tax credits to ensure that health care premium costs do not exceed 5.5% of their incomes. Insurers would have been prohibited from denying coverage to residents because of pre-existing medical conditions. A ballot measure that would have provided funding for the proposal included an employer requirement to contribute toward health coverage in amounts ranging from 1% to 6.5% of their payrolls, depending on the level of payroll, as well as a cigarette tax increase and fees on hospitals (Kaiser Daily Health Policy Report, 12/29/07).

Richard Figueroa, one of California Gov. Arnold Schwarzenegger's (R) top health care policy advisers, called the plan "groundbreaking," adding, "We believe it is a template for what can be the national health care model about how to fix the problem." He attributed the plan's failure to budgetary constraints, politics and outside opposition. He added that Schwarzenegger plans to rework the plan and reintroduce it sometime in the next three years.

Implications
CQ HealthBeat reports that "[o]ne of the final blows to the Schwarzenegger plan was a larger-than-normal state deficit," and "[w]ith the American economy in turmoil, questions of whether or not the country is prepared to undertake such a large debate linger." However, the debate is expected to increase as the presidential election nears. Democratic presidential candidates Sens. Hillary Rodham Clinton (D-N.Y.) and Barack Obama (D-Ill.) have proposed health care plans that include elements of the California proposal to reduce the number of uninsured people, while presumptive Republican nominee John McCain (R-Ariz.) focuses more on reducing health costs.

According to CQ HealthBeat, "No matter the plan, the question today is whether the roadblocks that led to the failure of Schwarzenegger's plan will serve as a learning experience for candidates and involved parties on the national level -- or if it will simply serve as foreshadowing." Panelist Peter Harbage, a fellow at the Center for American Progress, said, "This debate is really at the forefront of what is going to be a great national debate," adding, "It makes what happened in California just that much more important" (Mattingly, CQ HealthBeat, 3/10).

A webcast of the forum is available online at kaisernetwork.org.