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Can Arnold win on healthcare?

January 07, 2007|Lou Cannon | Lou Cannon is the author of five books on Ronald Reagan, most recently "Governor Reagan: His Rise to Power."

ARNOLD Schwarzenegger used to be compared to Ronald Reagan, another Hollywood actor who starred on the political stage in Sacramento. Lately, Schwarzenegger's enthusiasm for bond issues and freeways has been more reminiscent of Pat Brown, the builder-governor who preceded Reagan. But on Monday, when Gov. Schwarzenegger unveils his ballyhooed plan to provide health insurance for 6.5 million uninsured Californians, he will invite comparison to the legendary Gov. Earl Warren, who in 1945 put forth a visionary plan offering state-subsidized medical insurance for all but the wealthiest Californians.

Until now, Schwarzenegger has been more the anti-Warren. Last year, he vetoed a bill providing for a government-run health system, saying, "socialized medicine is not the solution to our state's healthcare problem." He also has been the anti-Reagan and the anti-Brown, governors who shared a willingness to raise taxes to pay for programs they believed were necessary. Schwarzenegger came to office vowing not to increase taxes, a promise he renewed last year during his reelection campaign.

Ever since a healthcare summit at UCLA in July, however, Schwarzenegger has been promising to tackle the challenge of California's inefficient health system, which the governor maintains is "broken." A recent study by the Public Policy Institute of California found that 25% of adults in Los Angeles County have no insurance coverage. Private employers, faced with rising costs, are reducing or eliminating healthcare coverage for employees. Uninsured and underinsured patients jam trauma clinics and emergency treatment centers, some of which have closed because of financial pressures. Only 75 such clinics and centers remain to serve the 10 million people of Los Angeles County, according to the state Health and Human Services Agency.

In his speech in Sacramento on Monday, Schwarzenegger will propose what Kim Belshe, his Health and Human Services secretary, calls a "comprehensive plan" with "shared responsibility" for controlling costs and expanding health coverage among individuals, employers, the government, and medical providers and insurers. In an interview, Belshe reiterated the governor's message that the insured pay a "hidden tax" to provide coverage to the uninsured. According to a study by the nonpartisan New America Foundation on which the Schwarzenegger administration has relied, this tax amounts to an extra $1,200 a year in premiums for the average California family.

Schwarzenegger and his aides, hemmed in between the governor's opposition to a state-run system and to new taxes, have been struggling for months to come up with a politically achievable plan. Except for disclosing that it will cover the state's 750,000 uninsured children, including children of undocumented immigrants, the governor has been vague about the specifics and the price tag of his plan.

"Who pays? -- that's always the question," said Allan Zaremberg, president of the California Chamber of Commerce. The chamber, often a supporter of the governor, opposes requiring employers to provide healthcare coverage on the grounds that most small employers can't afford it.

With healthcare costs rapidly escalating, the devil is necessarily in the details of any reform proposal. Administration officials acknowledge that a significant amount of "new money" will be needed, some probably from the state's general fund, but they also have suggested that money used to care for the indigent may be redirected toward buying coverage for the uninsured.

Adam Mendelsohn, the governor's communications director, declined to say whether Schwarzenegger's plan would include new fees or charges, but health industry sources said the governor's team has discussed a "provider tax" for physicians and hospitals.

Schwarzenegger's newfound interest in healthcare reform is an about-face from his previous policies. In 2005, he vetoed as too costly a Democratic bill that would have provided health coverage to children whose families earned up to 300% of the federal poverty level -- $50,000 a year for a family of three.

Since then, however, Massachusetts has moved aggressively in the direction of universal healthcare coverage. A bill proposed by outgoing Republican Gov. Mitt Romney, and passed by the state's Democratic-controlled Legislature, became law in April. It requires individuals to buy health coverage and employers to provide the coverage, and it imposes tax penalties for noncompliance. Vermont and Maine have since passed similar laws.

But covering the uninsured is a more daunting problem in California. In Massachusetts, only 10% of the population is uninsured, compared with an estimated 17% in California, where a higher percentage of the uninsured is below the poverty line. By the same token, a California solution to healthcare could set a national example.

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