SACRAMENTO — Gov. Arnold Schwarzenegger's audacious plan to arrange medical insurance for nearly all Californians -- one watched as a potential model for the nation -- was rejected Monday by the state Senate, obliterating the chance of anything but piecemeal healthcare changes from the Legislature this year.
The Senate Health Committee voted down the $14.9-billion proposal, which would have required people to hold private insurance and subsidized the premiums for those who could not afford them. The repudiation came from Republicans and Democrats, with only one of 11 senators backing the plan that Schwarzenegger and Assembly Speaker Fabian Nunez (D-Los Angeles) spent much of 2007 putting together.
Lawmakers called the plan, which passed the Assembly last month, "fundamentally flawed" and "a fairy tale" as a visibly frustrated Nunez, sitting in the committee room, muttered disagreement under his breath. Senators said the proposal, while laudable in its ambitions, might fall apart financially in a few years, leaving the state to cancel its new healthcare services or put taxpayers on the hook for billions of dollars more.
Senators said it was too risky a financial commitment when California faces a $14.5-billion budget gap that could force them to cut existing healthcare programs. Schwarzenegger has proposed $2.9 billion in healthcare cuts over the next 18 months.
"It doesn't matter if there are these good things in the bill if there isn't the money to pay for them," said Sen. Sheila Kuehl (D-Santa Monica), who chairs the health panel and has proposed that the state take over the role of providing medical insurance. "We can't simply say to the people of California, 'Go buy insurance.' "
The defeat may be a poor omen for national efforts to overhaul the country's healthcare system. The three leading Democratic presidential candidates -- Hillary Clinton, Barack Obama and John Edwards -- all have proposed similar programs aimed at expanding private insurance while allowing people who have coverage they like to keep it.
No national impetus
Healthcare advocates, including the powerful Service Employees International Union, had hoped a success in California would help build national momentum for change. Public opinion polls show increasing anxiety about the current health system, as more employers shed coverage benefits and premium costs outpace inflation each year.
