With his own party sidelined, California Gov. Arnold Schwarzenegger (R) is working with Democrats to produce a bill that would extend health insurance to everyone in the nation’s largest state if voters approve new taxes to pay for it, the Washington Post reports.

“We hope to have a bill very, very soon,” the governor’s press secretary, Aaron McLear, said Friday. “It’s just a matter of closing the last few inches.”

Schwarzenegger has invested mightily in the issue, saying California can set a national example on health insurance as it has on energy conservation and other areas. Last week, he called lawmakers back for a special session to find common ground between a Democratic bill and his own proposal to cover about 5 million uninsured Californians.

“The main sticking point, as it always is, is the funding formula, and where is the revenue stream?” said Fabian N & #380; & #380;ez, the Democratic speaker of the State Assembly. “When you rely on a free-market health system, and you want everyone to participate, the key issue is affordability.”

The governor’s effort gained momentum last week with endorsements from the state hospital association and the Los Angeles Area Chamber of Commerce. A new poll showed 72 percent of residents favor his $12 billion plan, which resembles the system put in place in Massachusetts and proposed by several Democratic presidential candidates.

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