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Vast Scope May Undermine Health Care Initiative : Prop. 186: Plan would take insurance firms out of system. Complexity makes it a tough sell for backers.


Behind in public opinion polls and endowed by its authors with breathtaking complexity, the all-embracing single-payer health care initiative on the Nov. 8 ballot appears in danger of being buried by its own colossal ambitions.

Proposition 186 raises so many issues--and represents such a sharp shift in health policy--that supporters say one of their biggest tasks is getting enough time with people to answer all their questions.

"It is not easy to explain," said Bill Zimmerman, a campaign strategist for the measure. "We can't win on sound bites."

Figuratively speaking, the initiative would put more than 30 million Californians in the same waiting room. Its authors seek to enroll seniors on Medicare, low-income persons receiving Medi-Cal, the uninsured and workers and their families with private health insurance--in short, all legal residents.

The initiative promises cradle-to-grave health care coverage, a liberal package of mental health and medical benefits, and money for long-term medical care and prescription drugs. It gets the name single-payer because a single state agency would pay everyone's medical and hospital bills.

Because of the single-payer feature, Proposition 186 goes well beyond the national health reform proposal made by President Clinton and so far stalled in Congress. Under the Clinton plan, insurance companies would continue to play a key role in the health system. But Proposition 186 is designed to take insurance companies--and the expenses they run up--out of the health care system. Initiative supporters argue that insurance profits and overhead consume about 27% to 30% of the health dollar, while their system can be run with overhead costs capped at 4%.

The anticipated administrative savings would help fund the system, but monumental tax increases would still be needed. Under the initiative, income, payroll and cigarette taxes would be hiked a combined $40 billion to $50 billion annually--roughly the amount now raised each year to run all of state government from combined sales, income, insurance and excise taxes on such things as cigarettes and alcohol. Most working Californians would pay an additional 2.5% of earnings in state income tax.

In return for the tax bite, individuals and employers would be freed of the payments they now make for insurance premiums and most medical co-payments and out-of-pocket expenses. While they are healthy, individuals under the new tax burdens could suffer a net loss, but with the promise of making it up when they become ill or grow old.

Should the measure pass, the authors anticipate that thousands of insurance company administrators and clerks, who now process claims, could be thrown out of their jobs. As compensation, the measure provides for up to $1 billion of the new tax money to go into job retraining for those affected.

Total dollars going into the system, counting tax money plus the state and federal transfers that now go into Medicare for seniors and Medi-Cal for the poor, could exceed $75 billion annually, according to the state legislative analyst, or close to $100 billion, according to analyses done by both supporters and opponents of the measure. Even at that, some economists say there will not be enough money and predict multibillion-dollar deficits.

Moreover, federal government approval would be required before Medicare and Medi-Cal patients and self-insured corporate plans could be folded into the proposed network.

All that adds up to an enormously complicated measure--and political problems for the sponsors of Proposition 186. A recent Los Angeles Times poll showed that the measure garnered just 9% approval among likely voters, although the poll did say that two-thirds of those questioned did not know enough about it to form an impression.

As a forum to explain the initiative as well as to raise campaign money, strategists have developed an extensive network of volunteers who are hosting house parties up and down the state. Usually a couple of hours long, the parties are attended by friends and neighbors of the hosts. Typically there are several speakers, often a physician who gives a detailed summary of the initiative, then answers questions.

One such house party in the Los Feliz section of Los Angeles, co-hosted by Channing Chase, an actress, and her husband, Dan Saxon, an art dealer, attracted about two dozen people who sipped wine, ate cheese and talked about health insurance. Chase said she was drawn to Proposition 186 and its guarantee of universal coverage because so many of her actor friends are forced to live without health insurance when they are between jobs.

Spirited debates developed about both the need for health care reform, which everyone seemed to agree on, and Proposition 186, which produced a split.

"We're in a frying pan now, and I think (Proposition 186) would catapult us into a bonfire," commented one of Chase's neighbors. She was clearly in the minority. House party guests chipped in just over $1,000 in contributions.

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