Health care plan veto won't stop lawmaker
Kuehl calls state-run program ‘gold standard,’ works to gain support
Tom Chorneau
San Francisco Chronicle, Sacramento Bureau
Tuesday, May 15, 2007
Sacramento — The debate over health care reform in California has focused on proposals from the governor and legislative leaders aimed at expanding private insurance coverage to more residents.
But there’s another idea — one with the support of legions of enthusiastic voters and a majority of the Legislature: Replace private insurance with a system managed by the state, the so-called single-payer system.
“Single-payer is the gold standard; it’s the right answer,” said state Sen. Sheila Kuehl, D-Santa Monica, author of SB840, which has already been vetoed once by Republican Gov. Arnold Schwarzenegger.
The idea, borrowed from health care plans used in many parts of the world including Europe and Canada, would provide universal coverage, including dental and vision, to all Californians.
Supporters contend that by cutting out the private insurance companies — their profits and overhead — costs will actually fall. They say the dollars now spent by workers, employers and government in California — estimated at about $186 billion last year — would be more than enough to pay for the universal service.
But Schwarzenegger and many Republican lawmakers oppose putting the state in charge of the system. Thus Democratic leaders, some of whom also support Kuehl’s bill, are working out a compromise with the governor that would leave the existing system dominated by private insurance in place.
Kuehl said she’s skeptical about what may emerge from closed-door negotiations.
There had been expectations that she would push her bill along and on to the governor’s desk later this summer as a popular alternative to any other deal that might be worked out. But Kuehl said she wants to keep her bill around another year even though she knows it has virtually no chance of ever getting Schwarzenegger’s signature.
“I don’t want it to be vetoed this year,” Kuehl said. “I want it to be vetoed in 2008, if he’s going to veto it — when we’ve got a national election going on and it gives me a whole other year to build support for it.
“People might say, why are you doing this if we passed that other bill? And I’ll say I still think this is the better answer,” said Kuehl. “This is will not go away because someone passed a half-assed bill.”
Although recent statewide polls show weak support for the concept, Kuehl’s bill has strong backing in the Legislature. Last year, the same bill passed out of the Assembly with a near-unanimous vote among majority Democrats and in a similar fashion in the Senate.
This year, the bill has 41 co-authors including Senate President Pro Tem Don Perata, D-Oakland, and Assembly Speaker Fabian Núñez, D-Los Angeles.
Still, Schwarzenegger remains opposed, dismissing the notion that government can efficiently run a health care system.
“We have watched what they have done to the health care system in the prisons,” said Schwarzenegger during a speech before the California Medical Association just last month. “And what did the government do? The prison health care system has been such a disaster that the federal court had to take over that system.
“Now they want to tell us they want to use that same system and provide health care for 37 million people — now, think about that,” he said. “What do they think, we are crazy? No, it’s not going to happen.”
More to the point, argued Chris Ohman, president of the California Association of Health Plans, is that single-payer does nothing to rein in the escalating cost of care, which he said has been increasing far faster than the rate of inflation in recent years.
“The cost issue precipitates an affordability issue, which in turn creates a coverage issue,” he said. “The concern we have with single-payer is that it doesn’t address the causes of medical cost inflation.”
Single-payer supporters say insurance companies’ profits are among the fastest-growing components of health care costs. Ohman said that overall, his members’ profits are similar to other industries.
Kuehl’s bill would require workers to contribute about 4 percent of earnings to the funding pool and employers to contribute about 8 percent. But if costs exceed available funds, critics point out, the state would be forced to either cut services, impose co-pays or deductibles, or raise taxes.
Kuehl said health care costs have generally tracked closely to the rise in income taxes so the need for new money would be unlikely. Besides, she argues, the existing system is already on a runaway track.
“What have you got now that’s rational? Nothing. We are now all completely at risk,” she said.
Looming on the horizon, too, is the specter of a single-payer ballot initiative — something that the California Nurses Association and some of the big labor unions have talked about in the past. Currently there is no measure in the works to put the proposal on the ballot, but that could change quickly.
The Service Employees International Union, which is a strong supporter of Kuehl’s bill and a potential sponsor of a ballot measure, is looking for compromises as part of a group that includes insurers like Blue Shield and Health Net, as well as providers like Kaiser and Catholic Healthcare West and groups including the teachers union and the medical association.
Despite her passionate support for single-payer for many years, Kuehl acknowledged the challenges it faces and conceded the time might not be right.
Indeed, a Field Poll conducted in late 2006 found increasing anxiety among voters over health care costs and strong support for the idea that government should be responsible for providing access to care.
Still, 52 percent said they favored reforming the existing system while 24 percent said they would support a new government-run program.
“I’m one of the major spokespeople of single-payer, and I’ll continue to be that,” Kuehl said. “I’ll do that next year, I’ll do it after I’m termed out, until we get another governor or an initiative.”
Comparing proposals
Here’s a comparison of some features of Gov. Arnold Schwarzenegger’s health care plan and the single-payer proposal from state Sen. Sheila Kuehl.
Who’s covered?
Governor’s plan aims at expanding coverage to 6.5 million uninsured residents. Kuehl’s plan would establish a new system for all California residents.
How do the plans work?
The governor’s plan requires all Californians to get coverage from a private insurer or from an existing government program. Kuehl’s plan would replace private insurance with a single-payer system managed by the state.
Cost
Governor’s plan requires that individuals have a minimum policy with a $5,000 deductible and out-of-pocket maximum of $7,500 per person. Employers with 10 or more workers must offer coverage or contribute 4 percent of payroll into a purchasing pool.
Kuehl’s plan imposes a payroll tax of 8 percent on employers and 4 percent on workers.
Key criticism
Governor’s plan would tax doctors, hospitals and other providers to help pay for new coverage. Insurance companies would also be required to accept any applications, regardless of preconditions. Kuehl’s plan might require new taxes to pay for services if planned sources of revenue cannot keep pace with medical inflation.
E-mail Tom Chorneau at tchorneau@sfchronicle.com.