Flurry of Legislation Prepared to Overhaul Health System in State

By HOWARD FINE
Staff Reporter

Proposals to overhaul health care delivery in California are suddenly all the rage, although it's considered doubtful any of the plans can emerge from the current legislative session.

Three major health care reform initiatives have been introduced in the Legislature this year, and more are certain to follow.

Given the state's massive budget deficit, the proposals with the most realistic chances of passage are those requiring employers to provide health coverage. Both Democrats and Republicans are proposing employer-based initiatives.

But health care advocates and industry lobbyists generally agree that a sweeping health care reform package of any sort is unlikely to emerge until at least 2004.

So why all the recent activity?

"This year is looking to be a staging year, where the proposals are laid out on the table," said Clark Miller, spokesman for the Pacific Business Group on Health. "Next year, with a presidential election that's sure to focus on health care, there may be more impetus for reform."

Nonetheless, the pressure for health care reform is real and growing with each month.

It's coming from several fronts: employers fed up with double-digit increases in health care costs; middle-class voters concerned about losing their coverage; local governments straining under the burden of providing care for the uninsured; and physicians, hospitals and other health care providers getting squeezed by pressures to hold costs down.

"The problem we have today is a confluence of crises in both the public and private health care systems," said Dr. Jack Lewin, chief executive of the California Medical Association, the advocacy group for physicians. "That's why you're seeing this pressure for reform."

The Democratic leadership is offering a bill that would require all employers to provide health insurance to employees or else put funds into a health insurance pool. The legislation would come as a result of the merging of pending employer mandate bills from Senate President John Burton, D-San Francisco, and Sen. Jackie Speier, D-San Mateo.

Another approach, favored by Republicans and business, is to provide tax credits or other incentives to coax businesses into providing health insurance for their workers. As of last week, however, no bills had yet been put on the table.

The only Republican bill comes from Assemblyman Keith Richman, R-Northridge, which would expand the state's Healthy Families program to working childless adults.

A third initiative, proposed late last week by state Sen. Sheila Kuehl, D-Santa Monica, calls for a single-payer health care plan along the lines of the system now in use in Canada.

A similar proposal was defeated at the polls in 1996, and with the state facing a budget deficit of up to $35 billion this year, health care observers agree the chances of legislators passing a program requiring a huge infusion of state funds is basically nil.

"The single-payer proposal is dead on arrival this year," Lewin said. The CMA is generally opposed to a single payer plan, although Lewin said about one-third of the CMA's member physicians support it.

Governor quiet

Gov. Gray Davis has not taken a stance on health care reform not surprising, say Sacramento lobbyists, given that the budget deficit is consuming almost all the administration's time.

Even Insurance Commissioner John Garamendi, who has said he wants to put forward a plan for universal health insurance coverage, has been sidetracked by other issues.

Last week, Garamendi spokeswoman Nanci Kramer said the commissioner is focused on the workers' compensation and homeowners' insurance crises. "These are huge, pressing, near-term issues," Kramer said.

Garamendi has formed a working group on health care reform, which Kramer said should come out with proposals later this year. She said she did not know whether those proposals would come out in time for consideration in this legislative session.

Even if the liberal Democrat-dominated Legislature managed to put forward an employer mandate bill, as many believe is most likely to happen, it is not clear it would pass muster with Davis. With the state's economy so shaky, resistance from the business community to an employer mandate is seen prompting a Davis veto.

The last time such a confluence occurred was 10 years ago and led to the formulation of the Clinton health reform plan, which led to a powerful backlash from health insurers and Republicans.

Because employers would now take the brunt of the reforms, health insurance carriers haven't been quite as vocal so far. Bill Wehrle, chief lobbyist for the California Association of Health Plans, said the organization was still reviewing all the proposals.

"We are definitely opposed to a single payer system, since that would cut out the insurance industry," Wehrle said. "Beyond that, we're still evaluating everything."


Health Care Plans
Three bills have emerged so far this session in Sacramento.

- Plan: Requires all California employers to provide health insurance for workers or pay into a health insurance pool

Sponsors: Sens. John Burton and Jackie Speier

Prospects: Good chance of passing Legislature, probably next year; too close to call on whether Davis signs bill.



- Plan: Sets up a government-run and primarily government-funded single payer health insurance system, similar to Canada.

Sponsor: Sen. Sheila Kuehl

Prospects: Little chance of passage, especially with budget deficit.



- Plan: Expands existing Healthy Families Program to cover working childless adults, using combination of state, federal and HMO funding.

Sponsor: Assemblyman Keith Richman

Prospects: Slim, due to budget crisis and expected resistance from HMOs.

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