Governor Schwarzenegger may resurrect health care plan

Governor Schwarzenegger's talking about resurrecting the health care reform plan that failed to make it out of the legislature this year. The plan would have provided medical coverage to 6 million uninsured Californians and compelled everyone in the state to get insurance. Insurers, medical practitioners, unions, and business groups alike signed on. In the first of two reports, KPCC's Julie Small explains why, despite that support, the measure ultimately failed.

Julie Small: On the day back in January when the State Senate Health Committee was to vote on his health care reform bill, Assembly Speaker Fabian Nunez implored the members to support the measure. But he already knew they would vote against it.

Fabian Nunez: We did the very best that we could. I don't think you, given the circumstances, could have had a better product before you to consider.

Small: The "product" – ABX1 1 – would have taken health care reform further than any government had before. Nunez and Governor Schwarzenegger had crafted the bill together. It would have provided health insurance to nearly everyone in California.

The bill called for a variety of fees to pay for it – but the governor insisted most of that money was paying for health care already... in higher premiums to support a system that denied coverage to thousands. But none of that mattered.

Senator Sheila Keuhl: Do I have a motion on the bill?

Small: ABX1 1 got 1 "aye" vote, 7 "nos" and 3 abstentions. Nunez slumped in a chair as the committee – for now – put an end to health care reform in California.

Daniel Zingali: Obviously that was disappointing.

Small: Daniel Zingali is the governor's health care policy analyst and one of the architects of the bill. Working nights and most weekends, he managed to win support from unions, business groups, and nearly all the major health insurers in the state. Zingali even got California hospitals to agree to a tax to make health care reform work.

Zingali: That's the system we have, though – where there can be a year of momentum built, securing all the stakeholder support that the governor secured, passage in the Assembly, agreement between a Democratic majority in the Assembly and a Republican governor – and one panel can vote it down under intensive lobbying from those who remained opposed.

Small: Zingali's most powerful opponent was Blue Cross, the largest private health insurer in the state. Blue Cross refused a recorded interview for this story. But in a letter to the Senate Health Committee before the January vote on the bill, Blue Cross said ABX1 1 would increase premiums "when affordability is already a barrier to coverage for many Californians."

Blue Cross also said it "strongly believes in guaranteeing individuals access to coverage" – but without "unintended consequences" that could raise health care costs. Daniel Zingali's interpretation: the bill would have required health insurers to cover to anyone who applied – and to spend more on medical care. Zingali says Blue Cross didn't like that.

Zingali: They want to be able to turn people away for their health histories and they don't like the idea of having to spend at least 85 cents of the dollar on patient care.

Small: In its lobbying effort against the bill, Blue Cross hired PR firm Goddard Clausen for $2 million. That's the firm that created the "Harry and Louise" TV ads to defeat the Clinton universal health care reform plan. They showed a middle-aged couple sorting through medical bills at the kitchen table.

Louise (from Harry and Louise commercial): (sighs) This was covered under our old plan...
Harry: That was a good one.
Narration: Things are changing and not for the better.

Small: Blue Cross paid another 3 million for Sacramento lobbyists to defeat ABX1 1. Altria – the parent company of cigarette maker Philip-Morris – spent almost $350,000 to lobby against the bill.

The tobacco giant got involved when the proponents added a tax on cigarettes to help pay for health care. The governor's health czar Daniel Zingali says lobbying by two well-heeled opponents definitely hurt the bill.

Zingali: That obviously was working against us. But does that explain every member of the Senate's vote against it? No.

Small: The first senator to change his vote – Leland Yee – announced he'd oppose the bill a week before the committee vote. The Bay Area Democrat said he was worried that health insurance premiums might rise.

Leland Yee: I can't see myself hurting the working poor – the workers of California – and that's why I'm not supporting this bill.

Small: Losing Yee hurt, but Daniel Zingali and other proponents of the health care reform point to Senate President pro tem Don Perata. They say the Oakland Democrat could have replaced Yee and others on the Health Committee who opposed the bill. He didn't. Tomorrow we'll hear why Perata decided to let the health care reform bill die.