Governor Arnold Schwarzenegger on Monday announced an ambitious and comprehensive plan to provide health insurance to all Californians. The $12 billion proposal would require all Californians, including illegal aliens, to have some form of health insurance. It calls for employers with at least 10 workers to either offer employees health insurance or pay into a state-managed fund used to help Californians buy their own coverage. For lower income people and the state’s 6.5 million underinsured, the governor also wants to increase access to public programs, such as Medi-Cal, and provide additional financial assistance to help with the cost of coverage via a new state-administered purchasing pool. Schwarzenegger, who has vowed to make health care his No. 1 priority during his second term that started Friday, also wants addition federal dollars for Med-Cal rate increases and to help pay for insurance for lower-income people. The governor is also calling to direct as much as $15 billion to medical care providers, although hospitals and doctors will be required to contribute 4 percent and 2 percent, respectively, of gross revenue back to state. Another proposal would require insurers to guarantee coverage for individuals. The plan especially the elements requiring employers to insure employees or pay a fee was met with anxiety from some business sectors. “We are concerned that the new costs mandated by this plan will far outstrip anticipated resources,” said Allan Zaremberg, president of the California Chamber of Commerce, in a statement. “One funding mechanism for the increased coverage,the employer tax and mandated employee contribution,is tied to payroll, and payroll growth in California has risen at just half the rate of health care costs in California in recent years. How will the inevitable shortfall in funding be addressed? Will the tax have to be doubled in ten years?” Michael Shaw, assistant California director for the National Federation of Independent Business adds, “If government forces employers to pay for something they cannot afford a new jobs tax there will likely be dramatic consequences for these employers, their employees and California’s economy.” A similar “pay or play” proposal was put into place in 2003, but business advocacy groups forced it into a referendum vote, where it was quickly overturned. This time, it is unlikely the current universal health proposal will survive the testy legislative session in one piece even though Democrats have cheered Schwarzenegger’s health care plan and control the legislature. Assembly Speaker Fabian Nunez and state Senate President Pro Tem Don Perata are among those expected to introduce additional health care plans this year. To read more about the likelihood of some form of universal health care passing in 2007,
