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If California budget talks fail, decide them an old-fashioned way

If Capitol partisans can't reach agreement the usual way, they could always arm-wrestle. There's even precedent.

May 23, 2010|George Skelton | Capitol Journal

From Sacramento — Perhaps one solution to Sacramento's gridlock can be found in a landmark event that occurred 39 years ago.

Then-Gov. Ronald Reagan was demanding that Medi-Cal recipients pay at least a token co-payment for their government-financed healthcare. Democrats were flatly opposed.

At loggerheads, the two sides decided to settle the issue by arm-wrestling.

It was Assembly Speaker Bob Moretti's idea. The athletic Van Nuys Democrat was confident he could take Reagan's negotiator, flabby-looking health director Earl Brian.

What Moretti didn't know was that Brian, as a kid, had been a nationally top-ranked tennis player and possessed an extraordinarily developed right arm.

"It wasn't close," the co-pay's Republican legislative sponsor, then-Assemblyman Bill Campbell, told me many years later.

"Whooommmm, Bobby's arm goes down.... We had a lot of fun laughing.... That's how Ronald Reagan got Medi-Cal reform."

The co-pay was $2 for each office visit.

I thought of this recently when Gov. Arnold Schwarzenegger proposed reestablishing a co-pay for the 7.5 million Californians on Medi-Cal, the federally subsidized healthcare program for the poor. Over the years, the co-pay had been virtually eliminated.

Today there's only a voluntary $1 co-pay. If the patient doesn't pay, it costs the doctor. Not that one buck means all that much to a physician, but California's Medi-Cal provider rates already are among the lowest in the nation.

Schwarzenegger is proposing a $5 co-pay for visits to a doctor, clinic or dentist, and co-pays of $3 or $5 for prescription drugs. Annual state savings: $118 million.

The governor also wants to require a $50 co-pay for visiting an emergency room. There's now merely a voluntary $5 payment. Savings: $42 million.

And he's proposing a $100 co-pay for each day in a hospital, up to $200 maximum. There currently is no co-pay. The average daily cost for hospital care is $1,800, the governor's budget office says. Savings: $59 million.

Maybe the $50 and $100 co-pays are a bit excessive for people living in poverty, officially defined at $10,800 a year for individuals and $14,600 for couples. But some co-pays are warranted.

And let's be honest: $5 to see a doctor is a bargain for anyone.

There are other health and human service "savings" proposed by Schwarzenegger that should be rejected outright. They include limiting doctors' visits to 10 a year (tell that to a cancer patient), eliminating funding for narcotics treatment and wiping out the state's welfare program.

But co-pays in an era of rising medical costs and budget bleeding seem fair.

"It's a reasonable attempt to begin controlling costs in a program that continues to grow," says H.D. Palmer, spokesman for the state Department of Finance. "The growth rate of Medi-Cal is not sustainable in the long run."

Noting that the alternative is cutting out services entirely, and that many already have been axed, Palmer adds: "What's left are things like eliminating oxygen."

Not buying any of it is Anthony Wright, executive director of Health Access California, a healthcare consumer coalition. "For very low-income people, even relatively small co-pays discourage them from getting the care that they need," he says.

"Dollars that may seem fine for the middle-class are hard to scrounge for folks making less than $1,000 a month.

"If you're having heart pains and don't know what it means, but know that going to an emergency room will cost you $50, you may literally be having a heart attack and not get treated."

But state government is facing a projected $19.1-billion deficit and can't afford all its largesse, I note.

"It's an issue of values and priorities," Wright counters. "The governor insists, 'No new taxes.' But he's clearly fine with imposing new costs on low-income Californians in the worst possible way."

OK, Wright has brought up two other subjects: the middle-class and taxes.

First, middle-class state workers: Schwarzenegger is proposing that they kick in more money for their generous pension plans. And they should.

Currently most contribute 5% of their pay. The governor is asking for an additional 5%. That would save the state roughly $400 million a year.

Schwarzenegger also has been trying to pare back pension plans for future employees to what existed before 1999. That's the ill-fated year Gov. Gray Davis and the Legislature blissfully bought into the retirement system's rosy scenario of golden investments forever, and significantly sweetened pensions.

Now, those pensions have become unsustainable — fiscally and politically. Too many taxpayers in the private sector harbor pension envy.

Reducing retirement checks for future workers wouldn't help the current budget. But it would save billions later and be a signal that Sacramento was beginning to regain some sanity.

But much counseling still is needed. Ordinary taxpayers may think that government pensions are a big issue, but when a state Senate committee recently held a hearing on the governor's proposal, it couldn't even raise a quorum.

Second, taxes: Schwarzenegger had the right idea in January but since then has abandoned it. If things got bleak enough, he said then, the state should postpone roughly $1.8 billion in corporate tax breaks scheduled to begin in July.

Things are certifiably bleak.

The nonpartisan legislative analyst last week recommended delaying the corporate breaks for two years. The California Teachers Assn. has placed an initiative on the November ballot to cancel them forever.

Whatever, they certainly shouldn't take effect this July.

Some things just make sense, regardless of which party you're tied to.

Democrats should caucus and have a serious discussion about Medi-Cal co-pays. Decide who among them will arm wrestle Schwarzenegger.

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