California’s Assembly approved a landmark overhaul of the state’s estimated $190 billion-a-year health care system Monday, setting the stage for a vote in the state Senate in the coming weeks.
The proposal, which has the support of Gov. Arnold Schwarzenegger as well as some key labor unions and a handful of big corporations, would require all Californians to have health insurance through their employers or government-sponsored programs, or to purchase it on the open market.
The new system, which also would require voter approval, would be financed by a new tax on hospitals, an increase in the tobacco tax, billions of new federal matching funds, and a tax on employers of up to 6.5 percent of their payrolls.
Supporters say the overhaul would reduce the cost of health care because most of the estimated 6.8 million uninsured residents, who now receive care at hospital emergency rooms, would get the benefit of regular doctor visits and preventive care once they were covered.
“This bill is going to cure an illness that California faces with a health care system that is teetering on collapse,” said Assembly Speaker Fabian Núñez, D-Los Angeles, the primary sponsor of the bill.
Schwarzenegger said the legislation, Assembly Bill 1X, has caught the attention of the rest of the nation.
“With today’s vote we can see the finish line,” he said at a news conference in the Capitol rotunda. “This finish line is coming closer, closer and closer.”
With the plan approved by the Assembly in a partisan vote of 46-31, the measure goes to the state Senate, which also must grant its approval before the bill can go to the governor.
The Senate is expected to consider the bill after the holidays. If it wins approval and is signed by the governor, the plan will go before voters in November.
While the governor and Núñez celebrated the Assembly vote, Senate President Pro Tem Don Perata, D-Oakland, has been skeptical about putting the proposal before voters when the state faces a budget deficit of $14 billion in the coming fiscal year.
Perata said Monday that while he supports the health care overhaul plan, he wants more information about its fiscal impacts before he brings the bill to his members.
He has asked the legislature’s nonpartisan budget office – the legislative analyst – to investigate the impact of the proposed bill on the state’s general fund.
“I welcome the progress being made in the Assembly to pass a workable health care reform plan, and I look forward to the Senate receiving the legislation and taking a close look at it,” Perata said.
Assembly Republicans unanimously voted against the bill, calling it the “largest tax increase in California history” and proposing less-sweeping alternatives, such as expanding local clinic services and tax breaks to pay for health care costs.
“It just seems insane to me,” said Assemblyman Roger Niello, R-Fair Oaks (Sacramento County), “especially when you consider the Republican proposals that would improve access and affordability and not raise taxes and spending.”
Labor groups had worked against the proposal for much of the last three months, largely over concerns that the bill did not provide enough help to middle-income families who might be required to buy health insurance on the open market.
Tax credits in the bill would be offered only to families earning no more than $82,600 a year.
While the California Labor Federation has taken no position on the bill, another large and important union – the Service Employees International Union – pledged its support.
Andy Stern, president of SEIU, said the California bill would provide momentum to health care reform nationally.
The biggest critics of the bill remain the California Nurses Association, which supports a single-payer system like those in many European countries and Canada; the state’s largest private insurer, Blue Cross; and the state’s biggest employer group, the California Chamber of Commerce.
Allan Zaremberg, chamber president, called the Assembly action a mistake.
“It is a mistake to push through half a proposal,” he said. “Too many questions remain unanswered to understand how this bill will affect California employers, the state’s economy and the gaping budget deficit.”
