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January 22, 2008

State's health care overhaul could cost taxpayers billions

The proposed overhaul of California's health care system could cost taxpayers billions of dollars in unanticipated expenses within five years of being launched, according to a review released tonight by the Legislature's nonpartisan analyst.

Legislative Analyst Elizabeth Hill, warning that Gov. Arnold Schwarzenegger and other proponents of the legislation may have under-estimated the cost of providing care to millions of uninsured Californians, said that hundreds of millions of dollars in federal support is also uncertain as is the number of people who may need state support.

The report comes on the eve of a critical hearing about the bill before the state Senate's health committee, set for Wednesday.

The overhaul legislation, AB 1X was approved by the state Assembly in December, but senators have been skeptical of its cost and workability. The warnings from Hill may provoke even more concerns.

"If it doesn't pass my committee, if we don't approve it - the governor will be out there saying that the state Senate killed health care reform," said Sen. Sheila Kuehl, D-Santa Monica, chair of the health committee and a critic of the proposal.

"But the headline should be that the senate refused to put out a bad health care bill," she said.

The $14 billion overhaul proposal would mandate virtually all Californians to have insurance. Employers would be required to cover their workers or pay into a state pool for purchasing insurance at a cost between 1 percent and 6.5 percent of company payroll.

There would be a fee on hospitals and a $1.75 tax on a pack of cigarettes to help pay for coverage of an estimated 6.8 million Californians who lack insurance.

The fees and taxes would go before voters in November, if approved in the Legislature.

Steve Maviglio, spokesman for Assembly Speaker Fabian Núñez, D-Los Angeles and author of the health care bill, called the analysis "thorough" but said the speaker and legislative analyst disagree on some aspects.

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Posted by healthinsurance at January 22, 2008 10:19 PM