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Healthcare Reform Terminated?

California's yearlong flirtation with broad-scale healthcare reform ended earlier this week with only one member of a key state panel voting in favor of the proposal.

Supporters of the reform plan negotiated by Gov. Arnold Schwarzenegger and the Democratic leadership in the state Assembly remained positive and said the fight is far from over, but I'm not so sure I share their optimism.

Last year around this time, Schwarzenegger was declaring 2007 to be the year of healthcare reform in California. In broad terms he outlined a plan that would ensure that most Californians had coverage, either through their employer, an individual policy or by enrolling in a state-run program or purchasing pool.

The plan promised that everyone would reap the rewards because nearly everyone--insurers, employers, providers and individuals--would have skin in the game. In the end, however, overcoming resistance from all these quarters, while battling a growing budget deficit proved too difficult.

The bill was heard last week by the Senate's Health Committee, and at the time appeared to be just two votes shy of passage. The vote was delayed to allow for some additional politicking, but that extra time ultimately was the bill's undoing. During the break, Senators were able to dig deeper into a state analyst's evaluation of the bill and its potential for driving the state deeper into debt. That report warned of a $4 billion funding shortfalls within five years if the average policy exceeded $250 per person.

The final vote came with seven Senators opposed, one in favor and three abstaining from the controversial measure.

Key concerns over the proposal centered around the revenue stream that would fund the expansion of coverage and the end cost to low-income Californians--concerns that are not going away any time soon. Personally, I agree with the concept that everyone should have skin in the game, but I seriously doubt that the state's entrenched political interests can overcome their differences under the fiscal realities--a looming $14.5 billion deficit and deep cuts proposed for existing healthcare programs--that conspired to kill this proposal.

In a statement conceding the battle but not the war, Schwarzenegger noted California's long struggle with the issue of universal healthcare coverage.

"Despite the Senate's rejection of our comprehensive healthcare reform bill, I want the people of California to know I will not give up trying to fix our broken healthcare system. The issue is too important and the crisis is too serious to walk away after all the great progress we have made. The problems will not disappear. In fact, they are likely to get worse," Schwarzenegger said, adding "If [healthcare reform] were easy, California would have gotten universal coverage 80 years ago--that's when Governor Earl Warren's reform plan fell short by a single vote."

If only things would have been that close this time around, then Los Angeles Senator Mark Ridley-Thomas wouldn't have been the lone voice in favor of the bill. "Opportunities like this don't come around very often. I fear that by letting this opportunity pass, in the hopes of something better down the road, we will be stuck with a failing healthcare system for the foreseeable future," he noted after the vote went down.

It's sad to say, but by the look of things, he's probably right.


Brad Cain is editor of California Healthfax and executive editor for managed care with HealthLeaders Media. He may be reached at bcain@healthleadersmedia.com.

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