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February 03, 2008

California health care dream gets a lethal shot of budget reality

A year ago, Gov. Arnold Schwarzenegger set out to show the nation that California could do what the federal government and many states could not: transform a health care system that leaves millions uninsured and countless others paying ever more for skimpier benefits.

That dream died Monday in a Senate committee, falling victim to a faltering economy and leaving reformers to wonder whether a historic opening was squandered. With the governor and lawmakers now focused on the state's budget woes, the next chance may be at least a year away, after the next president is inaugurated.

"California had a major opportunity," said Peter Harbage, an independent health care consultant affiliated with the New America Foundation think tank. "This would have been one of the biggest reform efforts in the nation in a very long time, really since the Clinton effort" in the mid-1990s.

The Republican governor's proposal, crafted after months of contentious negotiations with Assembly Speaker Fabian Núñez, D-Los Angeles, sought to put the state on a path to universal coverage and fundamentally change how health care is provided. Businesses would have faced a new requirement to cover workers, and individuals would have had to carry insurance.

The plan would have expanded government health programs to cover more poor and working-class residents, and taxed hospitals and cigarettes to help pay for it. Insurance companies, notorious for weeding out sick customers, would have had to halt that practice.

Altogether, about 3.6 million of the 5.1 million permanently uninsured residents would have received coverage.

But the $14.7 billion proposal ultimately may have been undone by a state budget deficit of roughly the same size. A warning last week of potentially huge shortfalls made it difficult for even liberal Democrats to get behind the landmark plan.

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Posted by healthinsurance at February 3, 2008 09:41 AM