Seeking a healthcare cure-all - Governor and Nuñez gamble on strategy for medical coverage

"I think we're on the verge of doing something huge," Nuñez told The Times' editorial board Friday.

The unusual partnership between the Republican governor and the Los Angeles Democrat echoes their collaboration last year, which resulted in landmark global warming legislation and a minimum-wage increase.

But a closed-door deal could incur political wrath for both men. The governor is backing tax increases despite last year's campaign pledge against them, and Nuñez could alienate labor and consumer advocates for supporting mandatory health insurance.

Coming with just two weeks left in the legislative session, the negotiations are focused on expanding medical coverage to nearly all of the 4.9 million Californians without it.

The plan would require all Californians to have insurance and would give subsidies to those unable to afford coverage. It would also address the problems of the private insurance market and require healthcare providers to reveal the costs of their services to foster competition.

Schwarzenegger and Democrats have agreed all year on most of those goals. But they have been stymied on how to pay for it, since any tax increase passed by the Legislature requires two-thirds support, necessitating some Republican votes.

GOP legislators have refused to budge on Schwarzenegger's proposal for a blend of taxes on hospitals, doctors and employers. And Schwarzenegger opposes as too high the Democratic alternative of requiring all employers to spend the equivalent of 7.5% of their payroll on medical care for their workers or pay a fee to the state. Republicans oppose any tax increases and have favored piecemeal efforts to make healthcare more accessible.

Under the gambit now being developed, the Democratic majority in the Legislature would approve a bill containing most of the plan except the financing, and possibly establish a special board to work out the details. Those issues require only a majority approval.

The governor, Democrats and supporters would draw up a ballot initiative for next year. It would ask voters to approve the employer spending mandate -- but at a rate lower than the Democrats' proposal -- as well as a tax on hospital revenues, and possibly a sales tax increase.