Gino DiCaro

Health Care reform gets one step closer

By Gino DiCaro, VP, Communications

Capitol Update, July 13, 2007

On Wednesday Senate President pro Tempore Don Perata (D-Oakland) and Assembly Speaker Fabian Nunez (D-Los Angeles) had the opportunity to present AB 8, their modified and merged health care proposals in the Senate Health Care committee, which is chaired by Senator Sheila Kuehl (D-Santa Monica), the author of the competing proposal SB 840 (a single payer health care system).  Regardless of the debate, the concerns, and the request for dozens of amendments, the committee passed the bill on a party line vote of 8 to 4.  It will now go to the Senate Appropriations committee.

Hundreds of individuals attended the hearing and several waited in line to have an opportunity to express their support or opposition.   The stakeholders consisted of labor representatives, consumer advocates, health advocacy organizations, health insurance industries, medical providers, businesses and interested citizens.  

However, the objective of the hearing was not to engage in a debate that would drive the authors of AB 8 to amend their proposal but to move the bill closer to the end of the legislative process.  It is a common assumption that after the state budget is passed and signed in the next few weeks, the negotiations between the Governor and the Democratic leadership will begin to flesh out the differences between their two proposals.  

The hearing at least allowed the stakeholders to once again express their concerns and recommend changes.  Two major themes seemed to arise from the testimony:  Whether to impose an individual mandate and how to finance this expansion of health care coverage.   Although AB 8 currently does not include an individual mandate both Senator Perata's version and the Governor's January proposal did include a requirement for each Californian to obtain health care coverage either through their employer or purchase it on their own (if they were not eligible for state subsidized coverage).  

Financing AB 8 is probably the most contentious component for business.  The Governor's proposal includes a financial scheme that includes an employer mandate but the overall cost of his system would be spread across the board, between business, individuals, insurers, hospitals, doctors and government.  The Governor's office calculated an employer mandate of 4% of payroll tax while the Democratic proposal is currently set at 7.5%.

These are just some of the points that leadership will have to discuss before putting AB 8 up for final votes in the legislature.  The debate surrounding the true impact of this proposal on business as well as getting control over the cost drivers in health care will continue.  However, it remains to be seen if any health care reform proposal will withstand legal challenges.
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