The "Year of Health Reform" in California: Take Two--Lessons for the Next Attempt

[courtesy of California Progress Report]

By State Senator Sheila Kuehl

It's been over a year since Governor Schwarzenegger decided to join the decades-long debate on health reform, and I'm actually quite pleased that he's indicated he will continue to focus on health reform in the years remaining in his administration. It may not have been clear to the Governor, but we always knew that the sheer magnitude of the needed reforms would take more than just one year to achieve. Any success to be gained on his "second try," however, will require a very different approach, both in terms of policy and in terms of politics.

Predictably, a number of interests in Sacramento have attempted to characterize the failure of the Governor's and the Speaker's bill as the victim of uncompromising single payer proponents on the left and powerful insurance companies on the right, as though the Governor's plan was "just right" in a three-bears, middle of two-extremes, spin. In fact, the Governor's plan appropriately fell because of the Governor's own reluctance to make the difficult policy decisions necessary for the plan to be in any way affordable to the state as well as to businesses and individuals, but which would have stirred up strong opposition from insurance companies.

Simply put, insurance companies will not support any plan that would prevent them from continuing to raise premiums 2-3 times faster than wages, limits that must be imposed in order for any long term financing to work. In the positive column, the Governor's plan included a number of reforms needed, if insurance companies were to be retained, that would have regulated (read wrestled) them into good behavior. It required insurers to accept all patients, to spend a minimum amount on actual care, and to refrain from singling out sick patients for unaffordably high premiums.

Unfortunately, it contained nothing that would have made premiums affordable for the vast majority of Californians, all of whom would have been required by the law to buy health insurance. The "subsidies" contained in the plan were only for very low income families (not a bad thing) and, except for those at the very poor end of the scale, would have partially subsidized premiums but left families to pay whatever co-pays and deductibles were set by the companies.

It's also worthwhile to refresh everyone’s memory that labor unions and health care advocates who ostensibly "supported" the Governor's compromise plan did not register a support position with the Senate Health Committee, but rather indicated they supported the bill only if it were amended. The requested amendments, which were lengthy and substantive, were rejected by the Governor and the vaunted "support" was actually no support at all.