Timing of Calif. action may boost health-care issue

LOS ANGELES - The universal health-insurance package that one chamber of California's legislature passed last week looks a lot like the one Massachusetts put in place a year earlier: Every resident must have insurance, every employer must pitch in, and no one can be denied coverage because of a preexisting condition.

It also resembles the health-care proposals of front-running Democrats campaigning for the presidency.

But this being California, the $14 billion package was presented as something spanking new and with the irresistible momentum of a trend.

"We are in a marathon here in California that the whole country and the whole world is watching," said Gov. Arnold Schwarzenegger, the Republican who made common cause with the Democratic legislative majority to pass the package after more than a year of negotiations and setbacks.

"After today, we can see the finish line."

The nation's largest state has led the way in so many fields that its claim of leadership on a public issue that has confounded policymakers for decades sounded familiar.

The health-insurance plan may not be a first, but the political calendar has the potential to push it smack into the middle of the presidential campaign.

Having been approved on a party-line vote, 45 to 31, by the General Assembly, the plan is likely to be debated in the Senate during the runup to the presidential primaries on Feb. 5, dubbed "Tsunami Tuesday" because it involves votes in more than 20 states. California is the biggest of them, having moved its primary from June, when it historically was chiefly a coronation.

Bill Carrick, a Democratic consultant who has studied voter attitudes toward health care, said the California package is likely to draw the ire of Republican candidates because it places new obligations on businesses. And though the measure resembles proposals put forward by presidential contenders Hillary Rodham Clinton and John Edwards, it will not necessarily unite Democrats. Some traditional Democratic constituencies favor a single-payer plan that covers everyone, rather than one requiring individuals to buy insurance.

Passage of the health plan by the Senate is by no means assured. Democratic Senate President Pro Tem Don Perata has withheld endorsement of the bill, referring to the need to study the state's $14 billion budget deficit.

And voters must approve the funding mechanisms, including a steep new tax on tobacco and a surcharge on hospitals.

But the health package impressed some experts by finding compromises where earlier efforts ended in logjams.

The measure requires all residents to acquire health insurance but helps pay for coverage for families who earn as much as 450 percent of the poverty level.

The subsidy is funded largely by employers who choose not to offer coverage; they are required to pay from 1 to 6 percent of their payroll, depending on the company's size.

The measure also requires insurers to spend 85 percent of premiums on health care, limiting overhead to 15 percent.

"For a long time, this was seen as too big, too complicated, too costly, too many interest groups," said Karen Davis, president of the Commonwealth Fund research group, which issued a study projecting savings of $1.5 trillion nationwide from reforms along the lines of some of the California provisions. "When you get action by a major state like California that has a very high level of uninsured, it just becomes realistic and pragmatic: This is doable. What is really needed is leadership."