A November Ballot Initiative Over California Health Reform Would Be The Biggest Thing Ever To Happen In The Debate
With news that California Governor Arnold Schwarzenegger (R) and the Democratic controlled General Assembly have agreed on a health reform proposal we may be on the cusp of a huge referendum on the Democratic version of health care reform.
The next step is for the State Senate to approve the plan. The Assembly approved it earlier this month on a party-line vote with Republicans in opposition. The Democratic-controlled Senate is also likely to approve the bill but that vote will be held at about the time as the state's presidential primary in early February.
Technically, the November ballot initiative would be about approving the new taxes necessary to implement the plan.
All of the Republican presidential candidates oppose this generally Democratic brand of health care reform. You can expect the Republican candidates to be railing against the $14 billion plan that mandates that both individuals and businesses buy health insurance and has lots of tax increases to pay for it.
All of the leading Democratic presidential contenders have proposed a health care reform plan very similar to the already enacted Massachusetts health reform law.
Now, California seems poised to take a very similar health reform program to state voters next November.
If this ballot initiative passes in our largest state next November, it would provide enormous energy for any incoming Democratic president to accomplish the same thing at the federal level.
If a Republican wins the presidency, it would give Democrats in the new Congress a great deal of momentum in their health care dealings with a new Republican president.
If the ballot initiative were to fail in so strong a Democratic state, it would likely scare the Congress far from any similar national program. Just like the failed Clinton health plan of 1993 left Democrats too scared to touch major health care reform for almost fifteen years, a California defeat would have a catastrophic impact. Democratic efforts for their preferred Massachusetts-like style of health care reform would be dead in their tracks and Dems would be forced to take another look at the more incremental market-based proposals offered by Republicans.
A California referendum on health care reform could well be the whole ballgame for Democrats and an enormous opportunity for Republicans to turn the tide in the health care reform battle.
Today, the polls say 65% of the voters support the plan. But in California, these ballot measures often look lopsided in the beginning before opponents spend millions in counter advertising. Given the importance of this vote, every health care stakeholder with something to lose will be pulling out all of the stops and the outcome of the contest, that would fundamentally change how peoples' health care would be paid for and delivered in California, can in no way be predicted this far out.
Plan supporters believe it would cover more than 70% of the state's almost 7 million uninsured.
Under the California health reform bill:
- Those with under 250% of the federal poverty level would get state subsidies for coverage while those up to 400% of the poverty level would get tax credits aimed at keeping their health insurance premiums below 5.5% of their incomes.
- While there is an individual mandate to buy coverage, residents are exempt if they are required to spend more than 5% of their income to buy a basic policy.
- There would be an employer mandate to "pay or play" by requiring those who do not cover their employees to pay a tax.
- Insurers would be prohibited from denying coverage to residents because of pre-existing medical conditions.
- Insurers would be required to spend at least 85% of their premiums on medical care--the leading for-profit health plans currently spend about 82% on medical care.
- To fund the program new taxes would be created thereby requiring voters to approve the plan in a November referendum. These taxes would include an increase of between $1.50 and $2 over the current $.87 per pack cigarette tax, a 4% tax on hospital revenues, and the employer mandate that would require any employer not providing coverage to pay a tax of between 1% and 6.5% based on the size of the business. The program would also count on $4.5 billion in federal matching funds. Proponents say the program is revenue neutral--it will pay for itself.
The California health reform plan also looks like everything the Republican candidates say they are against--mandated coverage, more taxes, and bigger government.
But if the California Senate approves this and sends it on to voters next November, we are going to have an unavoidable showdown on health care policy right at the time of the national election.
The outcome of the California vote on health care reform would have enormous life and death policy implications.
2 comments:
Great post. Here's a response cross-posted at the Health Access Weblog, at:
http://www.health-access.org/2007/12/stakes.htm
Bob Laszewski at the Health Care Policy and Marketplace Review, an observer of the national heath policy debate, make a couple of interesting points in his latest blog post about the upcoming ballot campaign.
He correctly notes that the California reform backed by Governor Schwarzenegger and Assembly Speaker Nunez is very similar to the plans of the leading Democratic presidential candidates--Edwards, Obama, and Clinton.
He places huge import of the November 2008 vote on this ballot measure, not just on the fate of California's reform, but of the reform conversation at the national level, regardless of who wins the presidency.
I agree that if California is able to pass reform, just as a new president is being elected, that would be a huge boon to the national effort. It would give the new President a mandate for health reform.
What if the ballot measure loses? Laszewski thinks it would stifle the debate. Losing would not be good, but I am not so sure it would stop the national effort. In 1992, California had a health reform proposal, Prop 166, that only got 32% of the vote, but that didn't stop President Clinton from his major attempt at health reform.
In fact, the experience of Health Access California is that key consumer advocacy issues that were initially unsuccessful at the ballot became some of our biggest legislative victories in the past decade.
* Consumer groups placed HMO consumer protections--Props 214 and 216--on the 1996 ballot, which got no more than 42% of the vote, but which led to the enactment of the HMO Patients' Bill of Rights by 2000.
* In 2005, the prescription drug companies spent $80 million to defeat Prop 79 to have the state negotiate drug prices for uninsured and underinsured Californians, but a different version of that bill was signed into law in 2006.
Two health coverage issues were on the ballot in recent years--a minimum employer contribution to health care, and a tobacco tax to fund hospital care and children's coverage. Both lost, but very narrowly (49%, 48% respectively). The election result did not stop the momentum behind those ideas; in fact, both concepts are in the new package now backed by the Governor and Speaker.
From the right, we also have conservative groups returning to the ballot in 2008 after losing previously, on property rights and eminent domain for a second time, and on parental notification for abortions, for a third time in a row.
Don't get me wrong: it's much better to win. Much. But in California, losing on the ballot is only losing when you give up. And if you don't try, you've given up and you've lost to begin with.
Final thought: The much bigger deal to the prospects of health reform at the national level is who is elected President. And it would be interesting to have the most prominent Republican Governor in the nation stumping for a health reform package that is similar in its outline to that of the Democratic presidential candidate.
California is already $14 billion in the hole. Oh well, what's another $14 billion after all....
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