ABX1-1 Earns Eclectic Mix of Opponents

People are known by the friends they keep. Public policy is often characterized by its opponents. “If so-and-so opposes this,” a supporter will say, “it must be good.” Assembly Bill AX1-1, the California health care reform compromise worked out by Governor Arnold Schwarzenegger and Assembly Speaker Fabian Nunez, must be one eclectic bit of legislation. It’s opponents are folks you might expect to be loath to remain in the same room together, let alone sit on the same side of a table.

The California Nurses Association opposes ABX1-1 because it permits insurance companies to remain in existence. They prefer a government-run, single-payer system. Blue Cross of California, the state’s largest health plan, opposes ABX1-1 for, among other reasons, it gives government too large a role in the health insurance market.

The California Chamber of Commerce, the National Federation of Independent Business, and the California Manufacturers and Technology Association are among a dozen business groups opposing ABX1-1 because they consider it bad for, well, business. And the United Food and Commercial Workers opposes it because they think it harms workers.

Whether this makes them an eclectic crew or just a motley one says more about you than them, I suppose.

Of course, for every opponent, there’s an opposite and equal proponent. The California Hospital Association, a health plan or two, a business coalition led by Safeway CEO Steve Burd and the Service Employees International Union have already lined up behind ABX1-1 or are likely to soon.

Whether ABX1-1 will ever take effect is uncertain. Passed by the Assembly, it awaits consideration by the State Senate. If it gains legislative approval, it’s implementation is contingent upon passage of a funding initiative supporters are seeking to qualify for the November 2008 ballot.

In the meantime, rumor has it some of these opponents of the health care reform package are already talking about forming an alliance to defeat the funding measure. As one rumor monger, who asked for anonymity noted, “The California Nurses Association and the tobacco industry teaming up. You have to wonder what they’re smoking.”

You also have to wonder about what will happen to the space-time continuum if nurses start asking Californians to vote “No” on the health care reform initiative in commercials paid for by tobacco companies. Where’s Rod Serling when you need him?

Governor’s New Health Care Reform Ally

Governor Arnold Schwarzenegger won new support for his health care reform plan today, again demonstrating that it is dangerous to underestimate his political savvy.  According to the Sacramento Bee, the California Hospital Association came out in support of Governor Schwarzenegger’s health care plan, including its fee of four percent on gross hospital revenue (Hospitals back Governor’s plan).

Yes, there are some critical caveats to the deal. For instance, the fee on private hospitals’ revenue would be permanently capped at four percent. The fee itself would be contingent on passage of an initiative, which, according to the Bee is currently planned for the November 2008 ballot. That initiative would assure the fees raised from hospitals would be put in a trust along with federal matching funds. The trust would be kept separate from the general fund. First dibs on the trust money would be to raise Medi-Cal fees paid to hospitals.  The initiative would also have to provide for mandatory cost-of-living increases on hospital Medi-Cal reimbursements.  Any money left would be required to be spent on reducing the number of uninsured in the state. Added 9/7/07: At the same time, the CHA Board voted to put a stop to charging pateients for the disputed difference between their hospital bill and their health plans’ coverage, a practice known as “balance billing.”

This is a great deal for the hospitals. By getting their state Medi-Cal fees increased, the amount the hospitals receive from the federal government increases. This mitigates some of the financial impact of the fee. Locking in the fee at four percent helps insulate them from future political decisions. And the fewer uninsured, the less uncompensated care they need to provide. So while there’s some pain in the deal for the hospitals, there’s a lot of gain, too.

For the Governor, the deal is a major political boost. Hospitals are very critical centers of influence in their communities. Which is one reason the Governor has reportedly been personally on the phone calling hospital heads across the state — especially in the districts of Republican lawmakers. Additionally, having an interest group subject to one of the Governor’s taxes endorse the plan is a major coup. Expect to hear it mentioned every time doctor and business groups complain about the fee the Governor would impose on them. Added 9/7/07: Finally, the elimination of balance billing is a very pro-consumer victory for the Governor.

The Governor’s and Legislative Leadership’s staffs continue to try to hammer out a compromise on health care reform which could be voted on before the September 14th scheduled adjournment. The support of the hospital association will strengthen the Governor’s hand in those discussions. First, he now has another ally who can put significant pressure on lawmakers where it counts — in their districts. Second, it builds momentum towards the Governor’s viewpoint. And third, it again demonstrates his strong political skills, reminding Speaker Fabian Nunez and Senate President Pro Temp Don Perata that while Governor Schwarzenegger is still relatively new to the game, he’s very good at it.