Health care proposals due to reach lawmakers

Bills from both parties - and the governor's plan to cover the uninsured - may be taken up this week.
By Clea Benson - Bee Capitol Bureau
Published 12:00 am PDT Sunday, April 22, 2007
After months of buildup, lawmakers may finally begin the debate this week on how to provide health coverage to an estimated 6.5 million uninsured Californians.

Californians could learn more about the potential costs and details of Democratic leaders' competing bills, which are the most likely vehicles if major changes are to be enacted this year.

But among all the weighty issues, the basic debate could come down to how much health coverage a person really needs.

At the very least, Gov. Arnold Schwarzenegger -- whose own sweeping proposal has yet to be written into any bill -- would like to see Californians required to purchase what amounts to a liability policy. He has suggested, at minimum, a $1,200-a-year plan with a $5,000 deductible that would pay the costs of hospitalizations and treatment that can run into hundreds of thousands of dollars.

Meanwhile, consumer groups say this is an opportunity to provide everyone with affordable, extensive preventive care as well as emergency coverage. But the kind of insurance they support could be beyond the financial reach of many working Californians without significant government help.

The consumer groups argue that a $5,000 deductible is too high.

"The point of insurance is to prevent you from health and financial ruin, and there's some insurance that doesn't meet either of those goals," said Anthony Wright, director of Health Access.

Daniel Zingale, one of the Republican governor's top advisers on health care, said the administration believes a $5,000 deductible is far better than hundreds of thousands of dollars in hospital bills that get absorbed by taxpayers and people with health insurance if sick people can't pay.

The $1,200-a-year, $5,000 deductible plan is a worst-case scenario, and the administration believes that better coverage would actually be available for that price, Zingale said.

"If the worst-case scenario is a $5,000 hit, that's a bad thing, but a health care crisis is a bad thing," Zingale said. "Right now, (hospital bills for the uninsured) can be a quarter of a million dollars, and it has the dual fallout of being passed on to people who have insurance" in the form of higher rates.

New details on the potential costs of the various proposals, based on computer models, are expected to be released at the hearings scheduled this week.

Meanwhile, the real-life tension between costs and benefits is now playing out in Massachusetts, which last year became the first state to require all its residents to purchase health coverage. Massachusetts this month exempted nearly 20 percent of the uninsured from buying the mandatory insurance when it became clear that even the high-deductible health plans would be unaffordable for them.

Zingale and others caution against drawing too close a comparison between California and Massachusetts, which has a very different health care marketplace.

Also, supporters of the governor's plan point out that theoretically, costs should come down when everyone is insured.

"It's a key question, figuring out how you're going to balance the cost with a mandate (on individuals)," said Peter Harbage, a consultant who helped craft the governor's proposal. "I think the governor does a good job of talking about how to contain costs."

Though his plan is currently just in idea form, and not written into legislation, Schwarzenegger spent last week promoting it. He wants to cover all 6.5 million uninsured Californians by requiring new contributions from doctors, hospitals, health plans, individuals, employers and government. The governor's plan is the only one that would require everyone to buy health insurance or face tax penalties.

It's broader than either of the proposals from Democratic legislative leaders.

Senate President Pro Tem Don Perata's plan, which would cover all working Californians and their families by requiring both employers and employees to bear a share of the cost, is scheduled for a hearing Wednesday.

Assembly Speaker Fabian Núñez's plan, which would require employers to contribute to health insurance and cover all children in the state, could come up for a hearing as soon as Tuesday.

Republicans in both houses, meanwhile, have released packages of bills that would largely seek to bring down health care costs rather than expand coverage.

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