Health Care bill to be voted on Monday

By CMTA Staff

Capitol Update, Jan. 24, 2008

After an 11 hour Senate Health Care Committee hearing, Thursday, January 24th, which reviewed every aspect of the massive Health Care Reform (HCR) package, the Senators adjourned until Monday when a vote on ABx1 1 (Fabian Nuņez) will be taken.   

The marathon hearing brought out dozens of stakeholders that expressed their support, opposition or concerns about the implementation and financing of a HCR package.  Senator Sheila Kuehl (D-Santa Monica), chair of the committee, provided a unique opportunity by creating an extensive agenda that allowed individuals to testify on every aspect of the bill, from individual mandate, regulatory reforms and financing.

The most anticipated portion of the agenda came at the beginning when representatives from the Legislative Analyst Office (LAO) made a presentation on their fiscal analysis of ABx1 1 and its potential impact on the general fund.  The  report primarily outlined potential risks that the state would face if certain factors were to occur over the course of five years while the program is implemented.  The conclusion was a potential $4 billion dollar deficit.  The report provided a thorough perspective of all the potential risk factors and urged the legislature to examine more in depth the long term effects and fiscal solvency of the HCR proposal.

The LAO in general outlined the following risk factors:

  • Federal Funding: The HCR proposal relies on funding sources which are outside of the State's control.  The Federal funding depends on the approval of waivers that will allow for the expansion of certain subsidized programs.  Matching dollars from the federal government would place an additional burden on the general fund.

  • Declining Revenue Source:  The financing for the HCR proposal relies both on a tobacco tax and a fee on hospitals.  The hospital fee currently has a sunset which would require reauthorization, which means that there is the potential that the State loses a significant portion of the revenue needed to continue operating the program.  There is also the potential for a decline in revenue from the tobacco tax if consumers respond to the tax by decreasing consumption.

  • Access to Health Care: There could be significant impact on the Health Care system if we have underestimated the amount of uninsured in California.  The report addressed the potential public backlash if the trigger off mechanism is implemented (the Department of Finance may terminate certain provisions of ABx1 1 if there is not sufficient funding).

    There is speculation on how the vote will turn out when the Senate Health Care Committee convenes again on Monday, January 28th.  Senator Kuehl has expressed her opposition to the bill because she supports a single payer system and other Democratic Senators have begun to express concerns with passing such a massive proposal during an economic downturn.  Speaker Nuņez and Governor Schwarzenegger must convince the Senate that this bill, at this time, is in the best interests of California.

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