Schwarzenegger reveals health bill months after outlining plan
October 10, 2007
SACRAMENTO (AP) ” Gov. Arnold Schwarzenegger fleshed out the details of his health care plan Tuesday, announcing a bill that exempts doctors from having to contribute and leases the lottery to make up some of the difference.
Despite the changes, the governor’s bill largely follows the outline of the proposal he announced in January, which turns around a new requirement that every Californian have health insurance. The cost is about $14 billion, a $2 billion increase from what Schwarzenegger laid out in January.
Schwarzenegger still wants to make health insurance mandatory and require employers and hospitals to contribute money to help subsidize the poor.
But the bill increases government assistance for low-income people, to help them afford the cost of insurance. Subsidies and tax credits would help those earning up to 350 percent of the poverty level, or about $72,000 for a family of four.
The bill also changes the way employers are assessed, so firms with payrolls under $100,000 do not have to contribute. His original proposal exempted firms with fewer than 10 employees.
But the governor ignored organized labor’s demand that employers contribute far more toward their employees’ health care. And while he increased subsidies for low-income people, he is still offering less than the unions and their Democratic allies would like.
Recommended Stories For You
Art Pulaski, head of the California Labor Federation, said Schwarzenegger should increase the subsidy so it includes families and individuals earning up to 500 percent of the poverty level or even higher.
“He’s leaving out the middle class altogether,” Pulaski said.
Such large subsidies would be expensive in a state where 4.9 million people go without insurance each year. Business groups have suggested raising the sales tax to fund health care, but the idea is unpopular with voters and Schwarzenegger left it out of his bill.
Others criticized the idea of leasing the state lottery to a private firm, saying lottery funding was unreliable and may not grow as fast as health costs.
“Historically, lottery revenues have grown relatively slowly,” said Jean Ross, executive director of the California Budget Project. “Health care costs have been rising rather rapidly. There’s certainly a potential mismatch.”
The governor said his lottery plan would bring in $2 billion a year for the next 15 to 25 years, at which point the state would have to find the money elsewhere.
Schwarzenegger said he was open to compromise.
“This is our proposal, so this is not the final numbers,” he said at a Capitol news conference.”
Democrats have not embraced his new plan and Republicans have shunned it. Democrats passed a health reform bill of their own, which Schwarzenegger promised to veto, that would make employers pay nearly double what he is proposing.
It is not clear who will carry the bill for the governor, who has called lawmakers into special sessions on health care and water policy.
Even if health care does pass the Legislature, voters would still have to approve the taxes to fund it before it could take effect. Schwarzenegger is aiming to put a health reform measure on the November 2008 ballot.