Expected but disappointing….

It’s not often that any Governor has a chance to help millions of Californians with a stroke of the pen, but he just missed that opportunity minutes ago with the veto of AB8.

With his pen, he could have made coverage more available and affordable for millions of Californians, whether through on-the-job benefits, through public programs, or the individual insurance market. We’ll see what he is willing to put in its place.

This is the fourth time in four years that the Governor Schwarzenegger has blocked a major health care reform that would have significantly expanded health coverage for over a million Californians:

* the Governor campaigned against Prop 72 to expand worker coverage in 2004;
* he vetoed AB772 to expand children’s coverage in 2005;
* he vetoed SB840 to expand coverage to all Californians through a single-payer system in 2006; and now
* he vetoed AB8 that would have comprehensively expanded health coverage and that included financing in 2007.

With his history of vetoes on health, the Governor needs to show flexibility and not just keep proposing what he set out in January.

WORDS VS. ACTIONS: He says he wants reform, but vetoes the bills that pass the Legislature.

He says he only will sign a universal coverage proposal, but his proposal is neither universal nor coverage—it doesn’t even define what coverage is. He says he wants only comprehensive reform, but he sets a standard that his own proposal doesn’t meet.

He says he is willing to negotiate and be flexible, yet ten months into the process, he has just put out language, and it doesn’t move much from his January proposal.

AB8 DESCRIPTION: AB8(Nunez/Perata) was a comprehensive health reform package that would expand health coverage to over 95 percent of Californians in the state — and would be the most sweeping coverage expansion in four decades.

Unlike the Governor’s plan, which requires a 2/3 vote or a ballot measure, AB8 can be passed and financed as a majority vote, allowing it to get to the Governor’s desk.

AB8 would have made significant strides toward universal health coverage. Once enacted, 95 percent of Californians would have health coverage.

* The full text of the bill is here,
* Health Access’ comprehensive fact sheet on AB8 is here.
* Health Access’ analysis of the current barriers for consumers in getting coverage, and how AB8 (and SB840) would have addressed those issues, is available on our website, here.
* Health Access letter to the governor on AB8 is here.

KEY PROVISIONS: The high points of AB8 include:
· Expands Medi-Cal and Healthy Families to cover all children, and most parents, who are citizens/legal residents up to 300%FPL.
· Creates a statewide purchasing pool initially for employees and dependents of employers that choose to use the purchasing pool. A new, affordable option for employers to cover their entire workforce, the purchasing pool would cover an estimated three to four million people.
· Establishes a minimum employer contribution to spend 7.5% of payroll on health benefits, either by paying into the purchasing pool or buying health insurance or other health benefits.
· Establishes a ceiling – at 5 percent of income – for what consumers are required to pay annually for health costs (including premiums and out-of-pocket costs).
· Reforms the individual insurance market so that coverage is available to anyone who wishes to purchase, by limiting insurers ability to deny people based on “pre-existing conditions,” and providing better funding coverage for those that are denied.
· Brings in new federal dollars to California ’s health system, through these expansions of public programs and employer contributions.
· Offers workers tax savings, by providing the ability to pay premiums, or share-of-premiums, with pre-tax dollars, for a savings of 15-40%.
· Places other rules and oversight on insurers, including limiting the percentage of premium dollars that go to administration and profit, rather than patient care.
· Provides modest reforms of job-based coverage to make it more accessible and affordable for employers.
· Encourages use of health information technology and disease management.
· Encourages cost savings through a bulk purchasing of prescription drugs, transparency of medical cost and quality information and creates a public insurer option to compete with private insurers to help keep premiums low.

AB8 SETS A GOOD FOUNDATION

AB8 (Nunez/Perata) is a comprehensive approach to both expand health coverage, and to secure coverage for those who have it, but are concerned that it won’t be there for them when they need it.

It seeks to make health coverage more available, affordable, and automatic in each of the three ways that consumers now get coverage: through employer health benefits, public coverage programs, and the individual market.

Passage and enactment of AB8 would have been historic, as it would be the biggest health care expansion of since the creation of Medicare 40 years ago; it would set a minimum employer contribution for health care, as significant as the establishment of the minimum wage 70 years ago.

The proposal includes “shared responsibility” financing from employers, workers, state and federal government, and insurers. As a majority vote bill, it can be enacted into law with simply the Governor’s signature, without the need for additional financing or special federal waivers.

If the governor wants something different or include different elements that would improve the bill, such as the Medi-Cal rate increase (and related hospital), he should start with the framework of AB8 and add to that.

Health Access California promotes quality, affordable health care for all Californians.

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