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Everyone's a critic of health plan

By ASSOCIATED PRESS
Published January 13, 2007

SACRAMENTO, Calif. - Gov. Arnold Schwarzenegger is taking on just about every major interest group in California in his audacious effort to bring universal health care to the nation's biggest state: unions, small business, doctors, hospitals, insurance companies, conservatives.

Whether the former Hollywood action hero can prevail and get it passed - or get it passed in still-recognizable form - is far from clear.

"I think it's very difficult in its present form," said Bill Carrick, a Democratic strategist. "He's got universal Republican opposition to it and the stakeholders are all going to get hit with a tax."

The Republican governor unveiled a $12-billion-a-year plan on Monday to extend health care coverage to most of California's 6.5-million uninsured and make it the second state, behind Massachusetts, to require everyone to carry insurance. Coverage for the poorest of the poor would be free; for many others, it would be subsidized.

Schwarzenegger also proposed to share the sacrifice by requiring individuals, employers and health care providers to contribute to the cost, saying the program will save billions, in part by providing preventive care.

"Building on shared responsibility, where everyone does their part," the governor said, "we will fix California's broken health care system and create a model that can be used by the rest of the nation."

But some economists say the plan will expose the state to runaway costs.

Small employers say requiring them to spend at least 4 percent of payroll on health insurance or to pay that much into a state pool will put them out of business.

Republican legislators say the governor's plan raises taxes, which Schwarzenegger promised not to do during his re-election campaign.

Doctors are going to be asked to pay 2 percent of their gross profits, and hospitals 4 percent. Doctors say the cost will be passed along to patients, amounting to a tax on sick people.

Exactly where the insurance industry stands is not clear. The plan could mean a lot of new business for insurance companies - perhaps 5-million new customers. But insurers would no longer be allowed to turn people away for medical reasons.

Unions are protesting the requirement that everyone buy insurance. They also say that many employers may drop health insurance for their workers and pay into the state pool instead.

California has one of the highest rates of uninsured people in the nation. In Massachusetts, 13.1 percent are uninsured; in California, 20.7 percent.

[Last modified January 13, 2007, 01:03:27]