The Year of Living Dangerously in Health Reform in California

[courtesy of California Progress Report]

By Sara Rogers
Health Consultant
Office of California State Senator Sheila Kuehl

• AB 8 (Nunez/Perata) passes Senate Health Committee
• Governor touts his “outline for health reform”
but has no legislation
• SB 840 continues as the only tested plan

In early January of this year, a flood of health insurance “reform” plans were announced, seemingly based on how fast dueling press releases could be faxed – first from Governor Schwarzenegger, then from Assembly Speaker Fabian Nunez, followed quickly by Senate President Pro Tem Don Perata. The year 2007 was precipitously baptized “the year of Health Reform” and off everyone was to summarily solve one of the most systemic, complex and politically implosive “issues” that California faces – in nine short months.

Never mind that the Governor’s plan consisted (as it still does) of a 10-page policy paper and that Legislative proposals (other than SB 840) were still in their infancy. The promise of the Governor and legislative leaders being committed to “getting something done this year” was enough to sell the idea that the vast issue of health reform could be (and ought to be) cracked in a single year.

Both Senator Perata and Speaker Nunez fleshed out their legislation over the early months of the year and then both plans were sent out to be “modeled” (that is, analyzed for cost) by the same MIT economist who had modeled the Massachusetts health reform plan, which, as we have seen in all the newspapers, has hit many road blocks in implementation, including the inability to find the kind of “affordable” health insurance plan that had been assumed in the modeling. Recently, SB 48 and AB 8 were merged into one bill, AB 8 which is jointly authored by both legislators. AB 8 sets a minimum employer contribution to health care of 7.5% of payroll, and allows employers to choose to cover their own workers with that amount (with unlimited premiums, co-pays and deductibles placed on their workers and no minimum on what is actually covered) or to pay that fee into a statewide pool that would then offer coverage to their workers, at some reduced premium. Additionally, AB 8 expands eligibility for public programs to children and parents up to 300% of the federal poverty level ($30,000 for an individual, $62,000 for a family of four).