Senator Perata the Key to California Health Care Reform Now

A lot of interesting developments in the past couple of days as California continues its long journey toward comprehensive health care reform. Here’s some of the highlights. Details will follow in the next few days — or become totally irrelevant.

  1. There’s now a new, improved ABX1-1 (Nunez).  According to a story by Laura Kurtzman of the Associated Press, the package requires all residents to obtain health care coverage, implements a one-to-six percent payroll tax on employers, and raises the cigarette tax. (One of the few remaining issues left to resolve is whether the tobacco tax will be raised by $1.50 or $2.00 per pack). The “affordability exemption” demanded by Labor and others is gone, but households earning up to 400 percent of the Federal Poverty Level would receive tax subsidies if premiums exceed 5.5 percent of their income; and for those earning up to 700 percent of the FPL tax credits would kick in if their premiums exceeded 10 percent of their income. As is apparent, negotiators made a lot of changes to the ABX1-1 passed by the Assembly Health Committee last month.  Understanding the package will require a thorough review. 
  2. Assembly Members don’t have much time for that review. Speaker Nunez has announced a vote on the compromise by the full Assembly on Monday, December 21st. Or, of course, they could skip reading the bill and simply vote the way their party leaders tell them. In either event, the result is likely to be the same: expect the Assembly to pass ABX1-1 on a party line vote.
  3. Senate President Pro Tem Don Perata called passage of health care reform legislation before Sacramento addresses the state’s looming budget crisis “imprudent and impolitic.” He told Senate colleagues not to expect to meet before the end of 2007. (This is significant because, depending on who you talk to, work on the initiative to finance ABX1-1 needs to begin next week or early-January if the measure is to be on the November 2008 ballot).
  4. Governor Arnold Schwarzenegger and Speaker Nunez have already begun positioning their compromise as being a financial boon for the state. According to a statement issued by the Governor’s office, health care reform would “bring billions of dollars of badly needed money to our healthcare system and ensure that future Governors will not have to make the decisions we are being forced to make today.”  Central to this argument is the relief ABX1-1 provides the General Fund in connection with MediCal financing. By using a tax on hospitals to raise the reimbursement rate, California providers will benefit from increased federal matching funds.

There’s a whole lot to digest here. It’s a complicated package and with lots of nooks and crannies for devils to hide in.  Whether understanding the bill will be worth the effort depends a great deal on Senator Perata.

It will be difficult for him to claim that what was “imprudent and impolitic” on Thursday is sound public policy on Monday. But both the Governor and Speaker are working hard to position their health care reform package as good for the state’s economy and budget. If their argument gains traction with the media and the public Senator Perata would have the coverage he would need to reverse course and push the compromise through the Senate. If that’s what he wants to do.

That’s unclear, however. He’s made very complimentary statements about the compromise, calling it better than he thought would emerge from the long and arduous negotiations. But he also seems genuinely focused on dealing with what could be a $14 billion budget deficit.

Over the next few days, it will be important to keep an eye on how various stakeholders respond to ABX1-1. Has it crossed the line in the sand Labor and its allies drew during the November 14th Assembly Health Committee hearing? Or has that line shifted to the right in the past month? Will the business community consider the reform package a benefit to their bottom lines or a drag on it? What do doctors think about the package? The carriers? Agents? Editorial boards?

If keeping track of how all these folks respond to the compromise seems too daunting a task, it’s easy to simply things: just watch for what Senator Perata. Because the fate of health care reform is largely in his hands now.