California Gov. Schwarzenegger Proposes Universal Health Coverage For All State Residents, Including Undocumented Immigrants

January 13, 2007 – 12:12 am | posted in Health Insurance, Primary Care

California Gov. Arnold Schwarzenegger (R) on Monday announced a proposal that would require all state residents to obtain health insurance and would share the cost among employers, individuals, health care providers, health insurers and the government, the San Francisco Chronicle reports (Chorneau, San Francisco Chronicle, 1/9). About 6.5 million California residents lack health insurance. According to the Census Bureau, in 2005 19.4% of California residents lacked health insurance, compared with 15.9% nationwide (Carlton, Wall Street Journal, 1/9). Under the proposal, employers with 10 or more employees would have to offer health insurance for workers or pay a fee of 4% of payroll to a state pool that would help workers purchase coverage, with the amount that they pay based on income. Employees could pay for health insurance with pretax income (Steinhauer, New York Times, 1/9). The proposal would require health insurers to sell policies to all state residents, regardless of whether they have medical conditions (Benson/Rojas, Sacramento Bee, 1/9). State residents who refuse to obtain health insurance could face reductions in their state income tax refunds or have their wages garnished (Geis/Lee, Washington Post, 1/9). The proposal also would extend coverage under Medi-Cal, the state Medicaid program, to all adults with annual incomes of as much as 100% of the federal poverty level and to children — regardless of their immigration status — in households with annual incomes of as much as 300% of the federal poverty level (New York Times, 1/9). The proposal would provide additional subsidies to help state residents with annual incomes of as much as 250% of the federal poverty level purchase health insurance. In addition, the proposal would increase by $4 billion reimbursements to health care providers under Medi-Cal (Appleby, USA Today, 1/9). Under the proposal, physicians would have to pay 2% and hospitals would have to pay 4% of their revenue to help cover the cost of the program (Ainsworth, San Diego Union-Tribune, 1/9). According to Schwarzenegger aides, the governor would finance the proposal in part with about $5 billion in federal matching funds that the state will receive as a result of restructured health care programs and with state funds currently used to finance charity care (New York Times, 1/9). Comments
Analysts said that the proposal “is illustrative of the resurgence of interest among politicians at all levels in expanding health coverage to the uninsured and that it provides fresh evidence, with Congress stalled on enacting comprehensive health care reform, the states are beginning to take matters into their own hands,” the Post reports (Washington Post, 1/9). Schwarzenegger said, “If you can’t afford it, the state will help you buy it, but you must be insured” (Rau, Los Angeles Times, 1/8). According to Schwarzenegger, the cost of health care for state residents without health insurance has contributed to increased premiums for other residents. He said, “We are paying a hidden tax. We are paying higher deductibles. We are paying higher out-of-pocket co-pays, and the list goes on and on (San Diego Union-Tribune, 1/9). States Assembly Speaker Fabian Nunez (D) called the proposal “a good start,” adding, “When it’s all said and done, employers in California will pay a portion of their payroll deductions toward the cost of insuring their employees” (Los Angeles Times, 1/8). Karen Davis, president of the Commonwealth Fund, said, “This is a very significant proposal. It is not just children he is talking about. It is really dealing with the whole problem of the uninsured, with concrete positions to raise revenues to pay for that coverage and the philosophy of shared responsibility. I think this shows health care is going to be a major issue in the 2008 presidential election” (New York Times, 1/9). Diane Rowland, executive vice president of the Kaiser Family Foundation, said, “Health care for the uninsured is back on the agenda,” adding, “The governors are trying to lead the way, but it’s also going to take national action to try to address this problem” (Washington Post, 1/9). Officials Bruce Bodaken, chair and president of Blue Shield of California, said, “Taking each part separately, there’s something for everyone to hate, but, taken as a whole, there’s a lot to like” (Carlton, Wall Street Journal, 1/9).

Criticism
Anmol Singh Mahal, president of the California Medical Association, said, “A tax on physicians is really a tax on those who are sick because it is the sick who go to see their doctors. Deborah Burger, president of the California Nurses Association, criticized the proposal as “a fresh coat of paint on a collapsing house” and a “huge gift to the insurance industry.” Burger added, “There are no limits on skyrocketing health premiums, no requirements on what will be included in the required plans” (San Francisco Chronicle, 1/9). State Assembly member Mike Villines (R-Clovis) said, “If we put any form of mandate on a business, we are seeing a jobs tax” (Los Angeles Times, 1/8). NPR’s “All Things Considered” on Tuesday reported on the proposal. The segment includes comments from NPR health policy correspondent Julie Rovner (”All Things Considered,” NPR, 1/9).

Audio of the segment is available online.

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