What if California Had Passed Health Care Reform?

California lawmakers recently passed a budget that, at least on paper, may, perhaps close the $42 billion shortfall the state faces in this and the next fiscal year. The budget was due before July 2008. So it was a bit less than eight months overdue. One of the methods required to close the gap was to reduce funding to some of the state’s neediest citizens.

Lawmakers inability to find a budget compromise in a timely fashion and in such a cruel fashion speaks volumes about a dangerous and dysfunctional political system. It brings into question whether California lawmakers can be trusted with something as critical to its citizens as the nature of its health care system, which would have happened had California enacted Assembly Bill X1-1 last year. Given the state’s current economic and political problems, what would have happened had health care reform passed in early 2009?

ABX1-1, you may recall, passed the Assembly, was supported by the Governor, but was defeated in the Senate early last year. A major reason for its demise was a Legislative Analyst’s Office Report on ABX1-1 that raised serious concerns about the state’s ability to implement the reform package within the $14 billion price tag touted by its supporters, primarily Governor Arnold Schwarzenegger. then Assembly Speaker Fabian Nunez and then President Pro Tem Don Perata. Using what it considered to be optimistic assumptions of the bill’s sponsors, the LAO concluded the plan would be running a deficit of $300 million. Using more conservative (and what the LAO called, more realistic assumptions), it estimated the health care plan would be running a deficit of $1.5 billion in it’s fifth year and have run up a cumulative deficit of $4 billion during it’s first half-decade of operation.

Supporters of the health care reform bill protested that the LAO report underestimated savings from fixing the state’s broken health care system. They relied on a study conducted by professor Jonathan Gruber of the Massachusetts Institute of Technology that demonstrated the reform package was a net financial plus for the state.

Yet the Gruber report made some questionable assumptions. The LAO report noted, for example, that the Gruber model “is not designed to estimate the effects of an economic slowdown on population responses” to the various elements of the reform.”  Translation:  if the economy tanks the Gruber analysis doesn’t work. That’s because, according to the LAO report, ABX1-1’s proponents assumed then current growth rates would continue over time. “For example, the cost of expanding Medi-Cal to adults was grown at the projected growth rate for current Medi-Cal expenses, while the wage-based employer fee was projected to grow at the projected growth rate for wages.”

But tank the economy did (and has). Time and again, the LAO report, delivered to the Legislature on January 22, 2008, warned against the danger of mis-predicting the future. “California is subject periodically to slowdowns in economic activity. During these times, unemployment often increases. This reduces the number of Californians with access to employer-provided healthcare. A recession similar to the one California experienced in the early 1990s could result in hundreds of thousands of Californians losing access to employer-provided health care, thereby increasing the costs for the [health care reform] plan.”

Statistics published by the California Economic Development Department puts this into context. In January 2008, when the LAO report was published, the state’s unemployment rate had been below six percent for three years, dipping below five percent in 2006. This compares to the state’s unemployment rate during the 1990s recession of more than nine percent during most of 1992 and 1993, peaking during several months at 9.9 percent. California’s current unemployment, at least during January 2009, was 10.1 percent. The worst case scenario the LAO warned against has arrived.

I don’t bring all this up to deny the need for substantial health care reform. For the state and national economies to recover sooner-than-later, substantial changes to the health care system are necessary. In times of economic dislocation like we are experiencing now, the human need for change in health care is especially acute and poignant. Unemployment is about more than data and statistics, it’s about neighbors and families in pain.

Nor am I raising this issue to gloat over the failure of ABX1-1. A number of the reforms contained in that legislation would have significantly improved California’s health care system.

These statistics, however, point to several truths:

  1. Predicting the future is hard, if not impossible. Any reform package has to make assumptions about the economic environment years from now. And most likely, those estimates will be wrong.
  2. Meaningful health care reform must come from the federal government — state’s simply aren’t equipped to deal with it. This isn’t to say there aren’t good ideas emerging from the states. But they lack the tools needed to deal with unexpected problems. As California has ably demonstrated, states do a poor job of facing economic challenges. They can’t deficit spend. The federal government has a tough time influencing the economy; states simply can’t.

Think about the budget drama of the past eight months. Now think about a health care structure upon which the state’s residents depends being subject to this horrendous display of chaos. It’s more than scary. It’s a nightmare that eventually California — or any state — will likely face if it tries to tackle the complex issues of comprehensive health care reform aimed at achieving anything close to universal coverage. Until states can print money, they will be incapable of shepherding their health systems through economic times like these.

America’s economy will recover. It’s only a matter of time and hard work. The nation’s health care system can be reformed into a truly American-style system that achieves universal — or nearly universal — coverage. It’s also a matter of time, hard work as well as of smart politics able to find common ground among competing factions. It won’t be easy, but it can be done.

No one during the debate over ABX1-1 could have anticipated what’s happened to the economy. The LAO warned against the potential, but even they did not declare this situation likely. Yet here we are. If ABX1-1 had passed the California fiscal crisis would be even worse than it is. And the state’s lawmakers would have been unable to face the challenge.

Do Schwarzenegger Vetoes Signal a Push for Comprehensive Reform in 2009?

Governor Arnold Schwarzenegger vetoed a host of health care reform bills on Tuesday. Some of them were to be expected. For example, he struck down Senate Bill 840, Senator Sheila Keuhl’s attempt to create a government-run, single payer system in the state. The Governor has been on record as opposing this approach for years and has vetoed the concept in the past. His vetoes of several bills requiring medical plans to include coverage for certain conditions is also consistent with his previously stated opposition to coverage mandates.

But there were lots of surprises on the list, too. Governor Schwarzenegger vetoed legislation that would have made it far more difficult for carriers to insurance companies to rescind an insured once they’ve accepted an application for individual or family coverage (Assembly Bill 1945 by Assemblyman Hector De La Torre. No carrier practice has garnered more negative press — and bigger fines — than rescission. From a political point of view, AB 1945 was a soft ball. Yet Governor Schwarzenegger struck it down.

He vetoed legislation (Senate Bill 1440 by Senator Keuhl) to compel carriers to spend 85 percent of the premium they take in on medical care — even though this concept was contained in the unsuccessful comprehensive health care reform package the Governor was pushing for last year. The same fate befell Senate Bill 973 by Senator Joe Simitian that would have created a statewide public insurer to link together existing regional and county-based health plans even though it too was similar to a portion of the Governor’s own reform plan.

Governor Schwarzenegger’s veto of Assembly Bill 2 by Assemblyman Mervyn Dymally was especially surprising. It would have expanded the ability of the state’s existing high risk pool to help more Californians unable to qualify for coverage in the private marketplace due to pre-existing health conditions.  The program needs significant help to continue to meet its mission. He also vetoed Senate Bill 981 by Senate President Pro Tem Don Perata which would have prohibited “balance billing” by doctors and other care providers.

The Governor had his reasons for keeping these bills from becoming law. His veto message concerning AB 1945 deplored the practice of unfair rescission and listed consumer-protection provisions he would want to see in legislation dealing with the issue. But he noted that AB 1945 was “written by the attorneys that stand to benefit from its provisions” and would lead to unwarranted litigation. Similarly, he preferred a different solution to the problem of balance billing than the approach embodied in SB 981.

Vetoes of this type, over approaches to solving problems, are common. They represent legitimate policy and political differences. The Legislature, for example, considered several bills addressing recission. They could have worked with the Governor’s office to fashion a compromise that he would sign. That didn’t happen. The veto did.

But it’s Governor Schwarzenegger’s rationale for vetoing AB 2, SB 1440, and SB 973 that best illuminates what’s in store for California concerning heatlh care reform. In all three of his veto messages, Governor Schwarzenegger made clear he wants comprehensive health care reform. Piecemeal and incremental changes are unacceptable.

I’ve written previously about why state health care reform efforts usually fail. In my mind, meaningful and comprehensive reform will need to come from Washington. And while enacting such reform has been greatly complicated by the current financial crisis, it still remains near the top of the domestic agendas for both Senator John McCain and Senator Barack Obama.

If the new Congress and the next Administration succeed in enacting dramatic health care reforms, it could preempt laws and regulations at the state level. To me, this suggests the efforts of California’s leaders might best be spent in helping to shape what happens in Washington, DC. Governor Schwarzenegger apparently disagrees.

Governor Schwarzenegger’s vetoes make clear he intends to pursue a California solution. It’s not just what the veto messages say, it’s their political impact that is important. They keep pressure on lawmakers to enact substantial reform. His opponents, for example, will be unable to call for a “time out” on further changes to the system while the new laws are given a chance to work. His allies, while angry at the vetoes, will work all the harder to get their pet reforms enacted.

In some significant ways, the potential for success is greater in 2009 than it was in 2008. Governor Schwarzenegger will be negotiating with a new cast of Legislative Leaders.  He will will be working with a relatively new Legislature, many of whom will have no scars with from his previous effort. Yet, unlike in 2007 when he launched the Year of Health Care Reform, a year in which, for most of it, the Governor offered only general principals, in 2009 he can use his defeated reform legislation, Assembly Bill X1-1, as a detailed starting point.

Certainly, the task won’t be easy. It may even be impossible. The state’s finances are in shambles and health care reform is expensive.

But there’s a legacy to be attended to. Plus, the Governor does not like to lose and the defeat of ABX1-1 was both visible and painful. His vetoes are a clear signal of where he’s headed. Expect 2009 to be the Year of Health Care Reform. Again.

ABX1-1 Postmortems

For those distracted by — oh, let’s face it — no one could have been so distracted as tp not know Assembly Bill X1-1 died in the Senate Health Committee on Monday. The compromise health care reform package hammered out by Governor Arnold Schwarzenegger and Speaker Fabian Nunez received a single “aye” vote. Seven Senators, including all four Republicans, voted against it. Three of the committee’s seven Democrats abstained.

ABX1-1 was deeply flawed, but it also was creative and forward-looking. Many aspects of the legislation will be part of the health care reform debate — here in California and nationally — for years to come. Here’s a round-up of what folks are saying now that the year of health care reform is officially ended.

The Sacramento Bee’s Daniel Weintraub has a blunt, and on point, analysis of why ABX1-1 failed.

Frank Russo, who publishes the California Progress Report blog laments the liberal-against-liberal infighting that surrounded ABX1-1 and reminds all sides that “politics is the art of the possible.”

A sampling of California newspaper coverage from San Jose Mercury News, the Los Angeles Times, and the San Diego Union and an editorial from the San Francisco Chronicle.

And here’s how out-of-towners reported on the demise of ABX1-1 in the New York Times, the Wall Street Journal, and, from way out of town, a Chinese news outlet (why not?)

Here’s what Governor Schwarzenegger, Speaker Nunez and Senate President Pro Tem Don Perata had to say (the legislative leader’s statements were made prior to the Senate Health Committee vote). A video of a press conference held by the Governor and Speaker after the vote is on the Administration’s web site (right now it’s on the home page, I don’t know where it will be moved to later). And here’s where you can listen to Senator Perata’s press conference after the vote.

Finally, here’s a thorough review of what happened, and why, posted by the California Healthcare Foundation on its California’s Healthline web site. 

Some Lessons Learned from California’s Year of Health Care Reform

With the demise of Assembly Bill X1-1, the compromise health care reform package proposed by Governor Arnold Schwarzenegger and Speaker Fabian Nunez, California has demonstrated how difficult it is to pass comprehensive changes. The bill was attacked, sometimes viciously and not always fairly, by the right and the left. In the end, it lacked a cohesive constituency of the center to push it forward. Given the Legislative Analyst’s study showing the legislation was likely to cost the state billions of dollars more than the $14.4 billion acknowledged by its supporters, it’s doubtful any constituency could push it through.

ABX1-1 failed, but the health care reform debate that started in December 2006 did not. Governor Schwarzenegger declared 2007 to be the Year of Health Care Reform., It wasn’t, but it wasn’t a wasted effort either. California’s health care reform effort produced many innovative ideas and brought to light valuable lessons. Here’s just a few:

1. Compromise requires participation from all parties.California’s politics are unique. We’re a three party state: Democrats; Republicans; and Post-Partisans. OK, there’s only one member of the Post-Partisan party, but he’s the Governor so he counts as much as the others. Only two of the three were engaged in the negotiations that led to ABX1-1. The Republicans were excluded (whether for good reasons or bad isn’t relevant for this discussion). The result: complicated and distracting legislative and political gymnastics and a winnowing of available support for the bill.

2. It’s tough for a state to go it alone.California is a big state. A really big state, but in the end, just one state. It’s revenue raising options are few and it can’t print money. In the end, printing money was was about the only thing that could have saved ABX1-1. Without the flexibility and power inherent in the federal government, ABX1-1 lacked a credible safety net if things didn’t turn out as the authors planned. In fact, to date, no state has successfully implemented universal coverage. Some argue no state can. Health care reform may require a national solution.

3. Balancing access and affordability is key. Health care reform in California nearly died in November of last year. Negotiators had reached an impasse. Governor Schwarzenegger insisted on requiring all residents to buy coverage; Democrats argued this would could impose a financial hardship on low- and middle-income Californians.  The Administration was focused on access; the legislature on affordability.

What bridged the gap was the introduction into the dialogue of an “affordability exemption.”  Every Californian would be required to have coverage unless the cost was too great a percentage of their household income. That at least was the theory. As defined in the bill it may not have been the case. But more important than the details was the concept and how it bridged what had seemed like an insurmountable gap. It wasn’t wholly original, Massachusetts has a similar provision in its health care plan. The lesson is that until the tension between access and affordability is resolved, reforms can’t move forward. (Maybe someone should tell the Democratic presidential candidates about it — but then what would they have to argue about?)

4. It’s better to vet complicated public policy early. The Governor, Legislative Leaders and their staffs devoted thousands of hours to working through the complex issues that make up health care reform. They spoke with stakeholders of every stripe — if they had charged admission to all the meetings and conference calls they held they could have financed the bill. If you ask these insiders, the drafting of ABX1-1 was an open and inclusive process.

Only, it wasn’t. There was talk, but not always dialogue. When there was dialogue, a limited number of parties were in the smoke filled tent. In fact, the final version of the 200+ page bill was published just hours before the Assembly passed it, few if any lawmakers actually read it first.  It was only last week that the legislation got the close examination required. The Legislative Analyst’s Office (LAO) study was incredibly important and Senate President Pro Tem Don Perata was right to have demanded it before the Senate considered the bill. And the Senate Health Committee’s 11 hour meeting made sure all sides were heard on every element of the legislation. Would opening the process up in this manner months earlier have assured the bill’s passage? No one can really say, but I believe it would have inspired negotiators to fashion a more solid proposal.

5. The process worked. In their opening statements today, Speaker Nunez and Secretary of Health and Human Services Kim Belshe, gave heartfelt eulogies for ABX1-1. It was better than the status quo, they claimed. Millions without coverage would get it; millions with coverage would be more secure. Maybe. I’m sure the folks who advocated Tennessee’s ill-fated (and ill-designed) TennesseeCare felt the same way. As did the policy makers in Washington State before they had to unravel much of the reforms.

We’ll never know if ABX1-1 would have improved California’s health care system or just replaced current problems with new and potentially more devastating ones. The package was held together by optimistic assumptions and hopeful visions of how independent actors (businesses and consumers) would behave. As the LAO analysis proved, if those fragile assumptions and hopes were wrong, the resulting plan would crumble.

Concern about the risks created by the plan wasn’t the fear mongering some of ABX1-1’s supporters claimed it to be. These risks were likely and perhaps inevitable. In the end, the process allowed lawmakers to evaluate the risk and benefits of ABX1-1. And that’s what the legislative process is supposed to do.

6. It’s a marathon, not a sprint. Improving California’s health care system will take time. As flawed as it was, ABX1-1 is a good starting point for the next stage of that effort. Indeed, it’s a worthy starting point for a national health care reform effort. The legislation may have failed, but it’s legacy is likely to continue.

Can The Troika Pull a Rabbit Out of the Committee’s Hat?

Anyone have any idea how Governor Schwarzenegger, Assembly Speaker Fabian Nunez and President Pro Tem Don Perata are going to pull this rabbit out of their hat?

The Senate Health Committee seems poised to defeat their troika’s health care reform package, Assembly Bill X1-1. The math is pretty straightforward:

There are seven Democrats and four Republicans on the committee. Two of the Democrats have announced their opposition to the bill and none of the Republicans have ever said anything indicating they’re supporting the bill. That means the bill fails five-to-six. And that assumes none of the other Democrats decides to vote against the bill.

Seems to me there’s only three ways to turn this around:

1. Stack the committee. It’s been done before. Replace a no vote with a yes-Senator. But Senator Perata told the San Jose Mercury News he won’t do this.

2. Get a Yes vote from one of the Democrats currently committed to voting No. Committee Chair Shiela Kuehl or Senator Leland Yee have both come out against the bill. In his opening statement to the committee, Senator Perata took a none too subtle swipe at Senator Yee in his prepared statement before the start of the Health Committee hearing. “I am a little dismayed that some committee members have seen fit, or maybe one committee member, is seeing fit to pre-judge the LAO’s report without reading it. Be that as it may, I guess we all approach our work in a different manner.” As means of persuading someone to change their minds on one of the most public and publicized decisions of their political career, this approach leaves something to be desired.

More likely is that Senator Perata, the Governor and Speaker will seek a courtesy vote from one of the Democrats. Their argument could be: 1) you’ll get to vote no on the floor of the Senate; 2) we’ll owe you big time; 3) you’ll keep your office; and 4) eventually the voters will decide if they like this health care reform — why would you stand in the way of letting the people decide? 

This last argument might — emphasis on the word “might” — work. ABX1-1 is entirely dependent on a funding measure passing on the November 2008 ballot. If the initiative fails, the bill never gets implemented. So moving the bill forward can be seen as simply giving the people a chance to make the final determination. Will either Senator Kuehl or Yee buy into this? That’s a big unknown.

3. Get a Republican to vote Yes. It’s worth a try. However, the most likely GOP Senator to buck the party is Senator Abel Maldonado. He was, after all, the only Republican Senator to support the 2007-08 budget during the 52-day standoff.

However, according to someone who was there, at a meeting with constituents on Friday, Senator Maldonado expressed concern about committing the state to substantial new expenses before the state’s $14 billion deficit is fixed. As the observer described it, Senator Maldonado explained that everything he knows from his own business experience and his commitment to being a responsible elected official points to a “No” vote on Monday.

OK, there’s a glimmer of a chance that the troika can find a courtesy vote. Or they can convince Senator Maldonado to listen to their financial analysis and not that of the non-partisan and highly respected Legislative Analyst. But it’s a long shot.

Nonetheless, some Sacramento insiders, even some opposed to the bill, are convinced they’ll pull it off. The Governor, Speaker and Senate Leader simply have too much invested in ABX1-1 to let it fail this close to the finish line.

I can’t figure out how they could do it. But if any of you have a guess — or better yet, inside information — please share with the class.

Senate Health Committee Hearing on ABX1-1 Roundup

California voters should send thank you notes to the Senate Health Committee. For the first time in the 14 month health care reform “debate,” the compromise health care reform plan worked out by Governor Arnold Schwarzenegger and Speaker Fabian Nunez, with an assist from Senate President Pro Tem Don Perata got a full and thorough vetting. Whether you support the legislation, Assembly Bill X1-1, or oppose it, you have to acknowledge the value of what the Senate Health Committee accomplished. Over the course of an 11 hour hearing they heard from dozens of witnesses on virtually every aspect of the bill.

Among the many sources describing what happened at the hearing, here are some of the most useful:

The Associated Press as published by the Monterey County Herald, “Schwarzenegger health reform bid teetering in key committee”
Kaiser Family Foundation “California Senate President Pro Tempore Delays Vote on Health Care Overhaul Measure”
California Healthline “California Senate Panel’s Vote on Health Reform Plan Delayed” 
Health Access has several valuable posts on the hearing
San Francisco Chronicle “Key vote on health care coverage delayed”
San Diego Union “Senate Democrats express doubt over insurance proposal ”
Speaker Fabian Nunez video and press release on the Legislative Analyst’s Office report and on ABX1-1 health care reform

If a vote had been taken after Wednesday’s hearing, the 11 member Senate Health Committee would have defeated ABX1-1. Democratic Senators Sheila Kuehl and Leland Yee had publicly announced their opposition to the bill. None of the Republicans had indicated much enthusiasm for ABX1-1. Senator Perata asked for a delay of the vote until Monday to give him time to find a sixth vote.

ABX1-1 has the support of the Governor, Speaker and President Pro Tem. It’s a comprehensive response to a problem a majority of Californians consider critical. Passage should be a slam dunk, yet ABX1-1 is on the brink of failing. Why?

What’s happening to ABX1-1 illustrates why it’s so difficult to pass comprehensive health care reform. Stakeholders cling dearly to their positions. The political process makes it easier to attack the most visible problems (health insurance premiums, for example) and pushes to the background initiatives to deal with the root cause of the problems (skyrocketing medical costs). A change in one area creates new issues. It’s like pick-up-sticks. Try to lift one problem from the pile and you’re likely to jostle others in undesirable ways.

For example, a lot of those testifying at the hearing yesterday want carriers to sell coverae to all applicants for coverage. Yet they were among the first to object to requiring all Californians to buy coverage. Without both of these corresponding mandates, the result is skyrocketing premiums and substantially reduced consumer choice.

Passing ABX1-1 in the best of times would be a challenge. Passing ABX1-1 as the economy whipsaws the state’s finances and has lawmakers, economists and the media warning of a recession is nearly impossible. How do you ask state legislators to support a $14 billion health care package that risks running up a $4 billion deficit in its first five years of operation (according to the report published by the Legislative Analyst’s Office) at the same time you’re asking them to cut $14 billion from the current state budget?

That’s the question Governor Schwarzenegger, Speaker Nunez and Senator Perata need to answer before the Senate Health Committee votes on ABX1-1 on Monday, January 28th.  The odds are against them.

Senate Health Committee to Delay Vote on ABX1-1

Assembly Bill X1-1, the compromise health care reform plan hammered out by Governor Arnold Schwarzenegger and Assembly Speaker Fabian Nunez, is in deep trouble. Even co-sponsor Senate President Pro Tem Don Perata is expressing pessimism.

At the Senate Health Committee’s hearing today Democrats and Republicans alike seized on the serious risks identified by the Legislative Analyst’s Office’s (LAO) report on the legislation’s impact on the state’s finances. Most significantly, two Democrats on the 11 member Committee have indicated they will oppose moving ABX1-1 forward. Assuming the Committee’s four Republicans continue to oppose the bill, this deprives the bill of the majority it needs.

To provide Senator Perata an opportunity to find the elusive sixth vote, Committee Chair Senator Shiela Kuehl agreed to his request to delay a vote on the bill until Monday. In the interim, Senator Perata will no doubt be having serious conversations with Senator Kuehl and Senator Leland Yee, the second Committee Democrat to announce he would oppose the bill. Senator Perata may even spend some time with the four Republicans. 

What he won’t be doing, according to the San Jose Mercury News, is shuffling the membership of the Committee to assure a majority will support ABX1-1.  This even though he admits to being pessimistic about the chances of ABX1-1 reaching the Governor’s desk. “You don’t instill public confidence by doing things that people don’t understand and they don’t think is a high priority. And I don’t think anybody right now believes anything (is more important) right now but the economy …” he told Mike Zapler of the Mercury News.

The LAO report is complicating the Senator’s quest. Using assumptions nearly as optimistic as those used by the bill’s sponsors, the LAO estimates the reform package would lose nearly $4 billion during its first five years of operation. It also identified other significant financial risks. Given the state faces a $14.5 billion deficit, this has, understandably, created substantial misgivings among lawmakers.

If a vote was held today it would fail. We’ll have to wait until Monday to see if the political skills and clout of Senator Perata, Governor Schwarzenegger and Speaker Nunez, can change this result.

ABX1-1 Coming Up Short in Senate Health Committee

Senator Leland Yee has apparently moved from the “undecided” to the “oppose” column concerning Assembly Bill X1-1, the health care reform package being pushed by Governor Arnold Schwarzenegger and Assembly Speaker Fabian Nunez. The bill will be heard by the Senate Health Committee tomorrow in what promises to be a long, thorough and, for the legislation’s supporters, bruising session.

As I posted on January 20th, Senator Yee had expressed strong concerns over the weekend about the state’s ability to afford ABX1-1. Today the Sacramento Bee’s CapitolAlert web site reports an aide to the San Francisco State Senator is confirming he will be vote no on the bill.

It takes six votes to pass a measure through the Senate Health Committee. With its four Republicans members and Democratic Chair, Senator Shiela Kuehl, already inclined to oppose the legislation, ABX1-1 appear to be headed to defeat tomorrow.

But a lot can still happen between now and then. As I speculated in the earlier post, Senator Kuehl could give the bill a “courtesey vote,” to keep it moving, even while pledging to vote “no” on the legislation when it reaches the full Senate. When asked if she’d consider such a gesture, she replied she “can’t answer that,” according to CapitolAlert.

Senator President Pro Tem Perata, who previously expressed concerns similar to those of Senator Yee, but who now appears interested in moving ABX1-1 forward, could restructure the Committee. He’s proven himself capable of such a move in the past, although its rare for a committee’s membership to be shuffled over just one bill. And whether he cares enough about the fate of the legislation to make such a move is questionable.

Anothe scenario: the CapitolAlert post speculates that one of the Republican Senators might vote for ABX1-1. They identify Senator Abel Maldonado of Santa Maria as the most likely suspect. The odds of this are slim, however. Senator Maldonado, although having shown a willingness to buck the party line, has indicated no enthusiasm for ABX1-1 or any similar health care reform packages.

Given normal circumstances, it would appear ABX1-1 will be defeated in the Senate Health Committe tomorrow. But, these are not normal circumstances.

ABX1-1 represents more than a year of negotiations between the legislative leaders and Governor Schwarzenegger. They’re not giving up yet. And there’s an election in  California just two weeks from today. One of the ballot measures, Proposition 93, will determine if the state’s term limits law is changed in a manner which enables Speaker Nunez and Senator Perata to hold onto their powerful posts. Do they really want to kill health care reform so close to that vote?

A lot can happen between now and the Committee’s vote tomorrow evening. And, given this is California and the topic is health care reform, most likely, a lot will happen.

ABX1-1 Could Fail to Pass Senate Health Committee

The Governor wants the bill passed. The Assembly Speaker wants the bill passed. The Senate President Pro Tem may want the bill passed — or not, it’s hard to tell. Anyway, several powerful unions want the bill passed. So do some business groups and consumer groups. So why is Assembly Bill X1-1, California’s comprehensive health care reform package in danger of failing to make it past its first committee hearing?

On January 23rd, the Senate Health Committee is expected to dive deeply into ABX1-1. The hearing will start in the morning and is likely to go into the evening. (Here’s the anticipated agenda). But how thoroughly a bill is reviewed doesn’t always correlate with its viability.

What’s endangering ABX1-1 is the make-up of the Committee. There are seven Democrats and four Republicans on the Senate Health Committee. When it comes to ABX1-1, the four Republicans will certainly oppose it. That means supporters can only afford to lose one of the Democrats. Lose two and the bill fails.

There are at least two Democrats who could vote against the measure. The Committee Chair, Senator Sheila Kuehl, has been an outspoken critic of the compromise bill.  The legislature’s chief proponent of a single-payer health care system for California, Senator Kuehl voted against Speaker Fabian Nunez and Senator Perata’s previous health care reform bill, Assembly Bill 8. And most observers would be surprised to see her vote for that bill’s successor.

Another Democratic considering a “no” vote on ABX1-1 is Senator Leland Yee of San Francisco. The Associated Press, in a story posted on the San Francisco Chronicle’s SFGate.com web site, quotes Senator Yee as saying, “It’s rather difficult for me to vote for a health care plan that’s going to cost $14 billion at the same time I’m looking at cutting $14 billion” due to the fiscal crisis facing the state.

The non-partisan and highly regarded Legislative Analyst’s Office (LAO) is preparing a detailed report on the legislation’s impact on the state’s finances. Senator Yee will be relying heavily on this report in determining his vote. “I think all of us are trying to find something that’s going to be of help to the people of California and not in any of the out-years find that there are unintended consequences or that it’s going to shift the burden of costs to workers unfairly,” the Associated Press writer Steve Lawrence quotes Senator Yee as saying.

None of this means that ABX1-1 is doomed. Senator Kuehl could vote for it in Committee as a courtesy to the authors regardless of how she intends to vote on the bill when it reaches the Senate floor. The LAO report could show, as some believe it will, that the state’s financial situation would benefit from passage of ABX1-1, meaning Senator Yee could comfortably support the legislation. There’s numerous plausible scenarios that have the bill sailing through the Committee.

Then again, it’s easy to come up with scenarios that have ABX1-1 crashing in flames. It’s tough to tell how hard Senator Perata will be pushing to get the legislation through his chamber, so the pressure to pass the bill along may not be as strong in the Senate as it was in the Assembly. The LAO report could raise questions that make Senator Yee — and perhaps others — unable to support it.  Or the Committee’s thorough review of the bill could bring to light previously unknown structural or drafting problems with ABX1-1 that are severe enough to have the committee hold the bill over. This is, after all, the first real vetting this version of the legislation is receiving.

We won’t know until Wednesday evening. What’s surprising, at least to me, is that the outcome is in doubt at all. It’s actually an encouraging turn of events. After all, this is how the legislative process is supposed to work: lawmakers making up their minds based on public input, thorough analysis and their political beliefs.

Senate Health Committee Hearing on ABX1-1 Agenda

Previously I’ve written about the thorough vetting Assembly Bill X1-1 was likely to receive before the Senate Health Committee. That should be Vetting, with a capital “V.”

ABX1-1, the compromise health care reform package has yet to be subjected to a thorough, formal review. Drafted by Governor Arnold Schwarzenegger and Assembly Speaker Fabian Nunez, it passed the full Assembly the same day it was printed in final form. This may be business as usual in the legislature, but it’s no way to review complex, complicated and critical legislation.

So Senate Health Committee Chair Sheila Kuehl is doing Californians a favor by making the time to thoroughly analyze the bill. Her motivation may be fueled, at least in part, by her numerous problems with ABX1-1 (as described in that previous post),  but who cares? What’s important is that lawmakers understand what’s in the bill before they vote on it.

Senator Kuehl’s approach to reviewing the bill, breaking it up into manageable pieces, should make it easier for Senators to dive deeply into different aspects of the legislation. One can question the way it’s broken up. For example, reviewing the mandate on residents to maintain minimum creditable coverage separate from the market reform which requires carriers to issue coverage regardless of an applicant’s health condition, is a bit disjointed. The reason a mandate to buy coverage is necessary is to make the mandate to sell policies work. However, that’s a relatively minor quibble with the approach. Far more important is that details of the bill will have a better chance of coming to light.

The Committee will take up the bill on January 23rd at 9:00 am. Based on the agenda the hearing should last all day. While all witnesses are created equal, some are more interesting than others. The representative of the Legislative Analyst’s Office (LAO) will be the marquee witness. Senate President Pro Tem Don Perata asked the LAO to analyze the impact ABX1-1 was likely to have on the state’s finances back in December when he felt passage of health care reform legislation before Sacramento addresses the state’s budget crisis was “imprudent and impolitic.” He’s since managed to overcome his reluctance, much as Governor Arnold Schwarzenegger seems to have overcome his concerns about changing the state’s term limit laws without redistricting reforms. Coincidence? Nahhhh.

Anyway, back to the hearing, Elizabeth Hill, the Legislative Analyst, is highly regarded by legislators of all parties. Her office’s report will be highly influential if,and it’s a big if, it makes definitive statements instead of couching it’s findings in an ocean of hedges. If the report is full of “ifs,” “potentiallies” “coulds” and “perhapses” then it’s impact will be muted, unless Committee members can get the LAO’s representative at the hearing to refine the conclusions a bit. We’ll have to wait a few more days to see if that will even be necessary.

For those who want to follow along at home on the 23rd (again, beginning at 9:00 am), the hearing will be broadcast online. To listen in, visit the California Senate’s web site and click on room 4203. The Committee’s expected agenda, subject to change, follows:

Outline for Hearing on ABX1 1 (Nunez)

I. Author’s presentation, including presentation by Secretary Belshe or administration representative

II. LAO presentation of fiscal analysis 

III. Testimony, by topic (order for each topic will be support, support if amended or with amendments, concerns, oppose unless amended, oppose)

  A. Mandate to maintain minimum creditable coverage

  B. Purchasing pool, coverage expansions, and proposed tax credits

  C. Requirements for health coverage outside of purchasing pool

  D. Health insurance market and regulatory reforms

  E. Financing (including provisions of proposed initiative) 
     — Employer assessments
     — Redirection of county funds
     — Tobacco tax
     –Hospital assessments
     –Federal funds
     –Individual contributions
     –Contingencies in event of funding shortfall

  F. Testimony on Massachusetts health plan

  G. Scope of practice changes

  H. Data collection and transparency and pay for performance provisions

  I. Other provisions
     –Hospital and physician rates
     –In-Home Supportive Service (IHSS) worker provisions
     –Electronic prescribing and medical records
     –Healthy actions and incentive rewards
     –Public insurer provisions
     –Diabetes, obesity and smoking provisions
     –Prohibition on hospital balance billing
     –Other

IV. Author’s close