California: Attempts to Enact Comprehensive Health Reforms Face Obstacles

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For California, 2007 was a year filled with high hopes and much preparation for comprehensive health reform. The previous State of the States noted that the outcome of negotiations involving Governor Arnold Schwarzenegger, Assembly Speaker Fabian Nunez, and Senate President Don Perata on the compromise health reform bill (AB X1 1) was unclear. In mid-December, the California Assembly had approved AB X1 1 during a special session, but the bill then failed to pass out of the Senate Health Committee in late January 2007 with a 1-to-7 vote against it. The bill would have provided health coverage for an estimated 3.6 million Californians (about 70 percent of the state’s uninsured residents). The main components of AB X1 1 included the following:

  • Mandated coverage for all individuals;
  • A financing mechanism shared across government, hospitals, employers, and individuals;
  • Expansion of Medi-Cal and Healthy Families for children, parents, and childless adults;
  • Subsidies and tax credits for low- and moderate-income populations;
  • Health plans required to meet an 85 percent medical loss ratio and to guarantee issue by 2010; and
  • Cost containment and quality improvement measures, such as implementation of health information technology, significant cost and quality transparency efforts and value-based purchasing initiatives, and employers’ required establishment of Section 125 plans.[i]
In February, Daniel Weintraub of the Sacramento Bee wrote an opinion piece about the state’s failure to pass comprehensive reform. He argued that the bill died for many reasons but, in the end, was confounded by the reality of a legislature composed of “leftist Democrats and right-leaning Republicans,” which made the passage of a centrist proposal remarkably difficult. In addition, Weintraub noted that while “the bill did not suffer from a lack of public support,” the process failed to keep the public informed.
Although many meetings were held to garner stakeholder support, failure to conduct enough public hearings limited general awareness of the proposal’s transformation into its final form. Even though Weintraub and others have subjected California’s reform effort to considerable analysis, agreement is still elusive as to what factors most significantly contributed to the plan’s rejection. Without doubt, concern over an insufficient future funding stream was a major factor.[ii] In any event, a significant majority of Californians are concerned about the state’s health care system and the need for health reform legislation. A 2008 Field Health Policy Survey released in April found that 72 percent of voters supported the overall health reform plan.[iii]
Given strong public support in California for comprehensive health reform and the governor’s continued advocacy, it is possible that the unsuccessful attempts of 2007–2008 have laid the ground work for future efforts. Unfortunately, California’s budget problems have worsened since January 2008. Even though the health reform legislation would not have relied on the general budget for funding, budget concerns are now the main focus among California policymakers.[iv]


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[i] “Major Proposals,” California Healthcare Foundation,,; State of the States, State Coverage Initiatives, AcademyHealth, January 2008.
[ii] Weintraub, D. “The Death of Health Care Reform: How Arnold Schwarzenegger’s Overhaul Plan Was Doomed by the Legislature’s Liberal-Conservative Partisan Crossfire,” The Sacramento Bee, February 10, 2008.
[iii] DiCamillo, M. and M. Field. “As Insecurities with the Health Care System Grow, Californians are Concerned about the State’s Failure to Enact Health Reform Legislation,” Field Research Corporation, April 28, 2008.
[iv] Ibid.