California

Status of reform effort: On January 28, 2008, the state Senate Health Committee rejected the compromise legislation put forth by Governor Schwarzenegger and Assembly Speaker Nunez and passed by the state Assembly.  The bill did not reach the full Senate.

Governor Arnold Schwarzenegger (R) unveiled his health care reform plan, Stay Healthy California, on January 8, 2007.  The Governor’s proposal would have achieved near universal coverage by imposing a mandate on individuals to purchase health care coverage.  It would have also required employers with 10 or more employees to provide coverage or contribute to the cost of their employees’ coverage.  The components of the plan included:

• Creation of a statewide purchasing pool;
• Insurance market reforms, including guaranteed issue/renewability, modified community rating;
• Premium subsidies for individuals with incomes below 250 percent of the federal poverty level;
• Expansion of public programs. 

The proposal was introduced as legislation with some modifications as The Health Care Security and Cost Reduction Act.  In September 2007, the California legislature passed AB 8, its own version of health reform legislation.  AB 8 (Nunez/Perata) would have created purchasing cooperatives, established maximum premium levels and reformed the individual insurance market.  It would have included an employer mandate to provide insurance to employees, but would not have imposed a mandate on individuals. 

In a special legislative session called by the Governor, Assembly Speaker Fabian Nunez and Senate Pro Term, Don Perata, introduced compromise health reform legislation, ABX1 1.  The compromise bill included an individual mandate, with exceptions for affordability and hardship, an employer mandate, subsidies for low and moderate income individuals, and creation of a purchasing pool.  The plan would be financed through a combination of sources, including employer contributions, state and federal funds, a new hospital fee, and a tobacco tax increase.   On December 17, 2007, the state Assembly approved the legislation.  However, citing concerns over the cost and long-term financing of the plan, on January 28, 2008, the state Senate Health Committee rejected the bill.  The bill did not reach the full Senate.*

 * For more information on the Governor’s proposal, “Stay Healthy California” see: www.calhealthreform.org/content/view/16/32/.  For the Health Care Security and Cost Reduction Act, see http://gov.ca.gov/pdf/gov/HCR-RN0729963.pdf.  For A.B. 8 Nunez/Perez Proposal, see: www.calhealthreform.org/content/view/13/27/.  For A.B.X1 1 see: http://info.sen.ca.gov/cgi-bin/postquery?bill_number=abx1_1&sess=CUR&house=B&site=sen.