California Health Care Reform, as Seen from Progressive States Network

[courtesy of California Progress Report]

By Adam Thompson
Policy Specialist
Progressive States

On Monday, the California Assembly passed a compromise health care reform measure that is intended to bring health care to at least 70% of the state's uninsured and reduce costs for everyone. The compromise measure was crafted by the Speaker and Senate President to mitigate concerns that led Governor Schwarzenegger to veto an earlier version. This time, Governor Schwarzenegger hailed the vote, calling it "courageous" and saying "we are closer than ever to fixing our broken healthcare system."

The measure, however, which includes robust expansions of public programs, stronger insurance regulations, and would require all residents to have coverage, faces an uncertain future in the Senate and before the voters in 2008. It also weakens proposed affordability protections that would have limited a family's risk from high health care costs.

Access and Affordability Protections The $14.4 billion plan, called the Health Care Security and Cost Reduction Act, would extend coverage to 70% of the state's 6.6 million uninsured, including 800,000 children. The expansion, which Health Access-California calls the largest expansion of coverage in the U.S. since the creation of Medicaid and Medicare, hinges on increasing eligibility in public programs for children, parents and adults, sliding scale tax credits and subsidies to afford coverage, and an individual mandate requiring all Californians to have a minimum set of health care benefits.

• Public programs would be expanded for children up to 300% of the poverty line (roughly $62,000 for a family of four) and for parents and adults without children at home to 250% of poverty, roughly $25,000 for a single adult.

• Californians with incomes between 250% and 400% of poverty ($82,000 for a family of four) would receive tax credits to help offset the cost of health insurance and aid compliance with the individual mandate. The tax credits would be provided when premiums exceed 5.5% of income.

The bill that passed the Assembly includes softer affordability protections than what was originally proposed, when affordability standards would have protected families from spending more than 6.5% of the income on total health care costs. This is a much stronger and fairer standard because it takes into account all out of pocket costs, including premiums, deductible, and co-pays. Under the revised measure, the protection only covers the cost of premium.