August 20, 2007

Health care for uninsured Californians - don't write it off as dead

Tom Chorneau, Chronicle Sacramento Bureau

Sacramento -- The conventional wisdom in the Capitol is that the nearly two-month state budget stalemate has killed any chance this year for legislation that would expand health insurance to 6.5 million Californians who lack coverage.

But as the divide over the budget deepens between Republican Gov. Arnold Schwarzenegger and GOP lawmakers, legislative sources say they think the governor may try to rescue his health care agenda by siding with Democrats.

Just as he succeeded in doing last year to win a landslide reelection, Schwarzenegger could bypass the minority Republicans in favor of negotiating a deal with Democrats who believe they have the votes needed to move a health care reform bill to the governor's desk without bothering with GOP demands.

Other bills negotiated between Democrats and the governor last year that did not need the two-thirds vote of the Legislature now holding up the budget included the boost in the state's minimum wage, drug discounts for the uninsured, and California's landmark global warming law.

Already there's general agreement between the governor and Democratic leaders on key issues of health care reforms, such as requiring employers to provide coverage and asking workers to share the costs. They also agree that government-sponsored programs need to be expanded. The big differences are over how much workers and employers should pay and who else should contribute.

The issues are complex, and with only four weeks left before the Legislature adjourns Sept. 14, most observers don't think there's the time or the energy to take on health care.

Daniel Zingale, one of the governor's primary advisers on health care, has said that Schwarzenegger wants to include Republicans in the health care debate and envisions the overhaul bill as one that would require a two-thirds vote because of the finances involved.

Republican Senate Leader Dick Ackerman, R-Irvine, said Schwarzenegger also gave him a promise in January to include Republicans in the health care debate. He said he has heard nothing different since.

But legislative sources and representatives of interest groups working on the health care overhaul said talks are already under way between Democrats and the administration on a health care bill that would require only a majority vote. Bills that raise taxes or appropriate money or include orders that would take effect immediately typically require a two-thirds vote of both houses of the Legislature and the governor's signature.

"I've always thought that's how it (health care reform) would get done," said Tony Quinn, a Republican analyst and co-editor of the Target Book, which tracks legislative races. "A bill like that would get done in the dead of the night, at the last minute. Just like on global warming, I think he's given up getting Republicans to vote for it."

Raphael Sonenshein, a political scientist at Cal State Fullerton, said that if the governor wants health care reform this year, a majority-vote bill might be the only option.

"Absolutely it's possible," he said. "The Republicans have hugely overplayed their hand. If the Democrats really want to make a deal before the end of session, they'd give Arnold some piece that he wants in the package and the Republicans are done on health care."

State Sen. George Runner, R-Lancaster (Los Angeles County), one of the holdout senators, said he would not be surprised if Schwarzenegger cuts a deal on health care with Democrats. But that threat, he said, doesn't change his resolve on the budget.

"We always anticipated and were aware that this was an option," he said. "My God, we've watched him do it a few times, and to not factor that into our thinking would not be very smart of us."

The budget stalemate, now one of the longest in recent state history, has left Schwarzenegger almost powerless over a group of 14 Republicans in the state Senate who refuse to support a $145 billion spending plan unless more spending is cut and policies are changed.

If the impasse continues through the end of August, the state will have been unable to make $3.2 billion in payments since the beginning of the fiscal year July 1 - including payments to hospitals and clinics, vendors and contractors, as well as paychecks to about 600 legislative staffers, state elected officials and appointees.

The Assembly, which approved the budget July 20, returns from its summer recess today, and expectations are that serious negotiations will resume between legislative leaders and the governor.

But even if a resolution is quickly attained, the summer struggle will have left its mark.

After trying quiet negotiations, Schwarzenegger took the unprecedented step last week of holding news conferences in the districts of several of the holdout Republicans, criticizing their position and urging local voters to pressure them to pass the budget.

Holdout Republicans have pushed back, pointing out their willingness to pass legislation to fund needed services that would allow budget negotiations to continue - both ideas that were shot down by Democrats and the governor, who do not want to prolong the stalemate.

Even if budget negotiations move quickly this week, members of the business lobby don't think it's possible to make significant progress on health care by mid-September.

"This is a crisis that has occurred over decades, and to fix it in one legislative session doesn't make a lot of sense to us," said Jot Condie, president of the California Restaurant Association. "We think something needs to be done, but not without careful debate."

But labor unions, consumer groups and health reform advocates want Schwarzenegger to fulfill his promise to push health care legislation forward this year.

The California Endowment, one of the state's largest private foundations, launched a $6 million statewide ad campaign earlier this month calling for health care reform. The Service Employees International Union and AARP also plan to lobby in the coming weeks.

The governor has always contemplated that the health care bill would be the product of compromise that involved all interests. He also proposed as part of the financial package a tax on hospitals and doctors as a way to generate revenue for expanding insurance coverage - a tax that would require support from two-thirds of the Legislature.

An alternative plan proposed by Democrats would simply require employers and workers to share the cost of expanding care to uninsured workers and expand government-sponsored coverage.

While some critics maintain that the Democrats' plan imposes a tax and should require a two-thirds majority, the bill is structured so that it could pass with a simple majority.

Runner said that if the governor seeks an agreement with the Democrats on a majority-vote bill, it would increase the chances that the measure would be challenged either in court or at the ballot box.

"How popular a system will this be if it only gets support from a simple majority of the Legislature?" Runner asked.

Budget impasse - whom to call

Contact the following state offices about the delay in budget negotiations:

Senate Republican leader Dick Ackerman of Irvine: (916) 651-4033; senator .ackerman@sen.ca.gov

Senate President Pro Tem Don Perata, D-Oakland: (916) 651-4009; senator.perata@sen.ca.gov

Gov. Arnold Schwarzenegger: (916) 445-2841; e-mail by visiting the governor's Web site at

gov.ca.gov