States Moving Toward Comprehensive Health Care Reform
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. Although comprehensive health care reform was not enacted, several more limited bills passed the legislature, some of which were signed by the Governor. The Governor is committed to re-introducing health
reform legislation in 2009.
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 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.*
Although comprehensive health reform was not achieved, a number of incremental bills were passed by the legislature. The Governor vetoed several bills but signed legislation that does the following:
Protects patient privacy by creating a monitoring office and allowing the state to impose fines for multiple violations (AB 211)(SB 541);
Mandates that when insurers cancel a person’s coverage, they allow other members of the family to keep their coverage (AB 2569).
In addition, on September 23, 2008, the Governor signed the state budget bill. The bill increases premiums for Healthy Families (SCHIP), requires children in Medi-Cal (Medicaid) to verify eligibility every six months, and retains the current 10 percent cut to Medi-Cal provider payments until March 1, 2009, when smaller payment cuts will take effect. The Governor is committed to re-introducing
health reform legislation in 2009.
