SACRAMENTO — The state Assembly on Monday approved the first phase of a $14.4-billion plan to extend medical insurance to nearly all residents, giving Gov. Arnold Schwarzenegger and his Democratic allies their first victory in a risky yearlong campaign to overhaul California's healthcare system.
The measure, negotiated by Schwarzenegger and Assembly Speaker Fabian Nunez (D-Los Angeles), would require almost everyone in California to have insurance starting in 2010. It would provide subsidies and tax credits for those who would have trouble paying their share of the premiums.
The authors estimate that it would bring medical coverage to 3.6 million Californians, including 800,000 children, who currently don't have it. But the plan cannot go into effect unless it passes the state Senate and voters approve a companion initiative that Schwarzenegger and Nunez are planning to place on the November ballot to finance it.
The measure, which passed the Assembly on a party-line 45-31 vote, was heralded as an important step not only for California but for a national Democratic effort to enact a similar plan for the entire country.
"California has taken a giant step forward today on something that many people thought could not be done," Schwarzenegger said. "With the Assembly's courageous vote . . . we are closer than ever to fixing our broken healthcare system."
Nunez said it was no surprise the plan had been so hard to forge.
"Otherwise, in the last 90 years you would have seen a successful attempt at fundamentally reforming our broken healthcare system not only here in California but around the country," he said.
But the measure faces a more skeptical reception in the Senate, where Democratic leaders are asking whether it makes sense to adopt such a giant change at a time when California has a projected $14-billion budget gap.
Senate President Pro Tem Don Perata (D-Oakland) did not attend a jubilant news conference with Schwarzenegger and Nunez, though he is officially a co-sponsor of the bill. He issued a muted statement praising "progress" and saying that he would ask the Legislature's fiscal experts to determine whether the plan would become a drain on the state's already depleted coffers.
Nunez left the financing out of the bill because it would have needed a two-thirds vote to pass, requiring some GOP support. The planned initiative would ask voters to approve taxes: $2.6 billion on employers that don't provide healthcare, $1.5 billion on tobacco users and $2.3 billion on hospitals.
