When you're the most populous state in the union, any extraordinary policies you sketch out could likely become a national
catalyst for change. California has begun working on its state initiative for comprehensive healthcare reform, not simply
for lack of a national proposal, but also because the health of its 36.1 million residents is at stake.
At a glance
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One person who's watching California's evolution closely is Christopher C. Ohman, president and CEO of the California Association
of Health Plans (CAHP), headquartered in Sacramento, which represents nearly every plan in the state. Ohman says Gov. Arnold
Schwarzenegger has created a proposal for California that leverages the core strengths of the health plans, their networks,
their relationships with members and their cost-management strategies.
In his State of the State Address in January, Gov. Schwarzenegger proposed a radical plan to mandate health coverage and reform
California's healthcare system to one that covers everyone and relies on a variety of funding streams and reallocations. Currently,
between 6 million and 7 million California residents are uninsured; nearly one in three have family incomes of $50,000 or
more. Those who do have insurance tend to be in HMOs, and a surprising amount are enrolled in individual plans not associated
with an employer.
"Governor Schwarzenegger has painted a very large canvas of the right size for what it will take to cover all Californians,"
Ohman says. "Now getting from an appropriate-sized plan to the result is an enormous challenge. He has structured his plan
to be based on shared responsibility, which, for the stakeholders, means there's some bitter and some sweet. The way that
this will all come together is if we all accept our share of responsibility." According to Ohman, the governor's plan for universal coverage does not put health plans out of business or force a single-payer
system, and for the 40 plans that comprise CAHP, that's good news. So far, healthcare reorganization proposals coming from
various governors' offices nationwide have included health plans as part of the solution.
Certainly the driving force behind states' aggressive reorganization attempts is the need to better manage healthcare costs
and to have the wiggle room to serve residents' needs for the long-term. It seems the time is right for states to expand public
programs and get all the stakeholders involved in the big picture.
Schwarzenegger's Plan
Under California's introduced proposal:
- All residents would be required to purchase coverage, and they'd get a tax break;
- Low-income residents could receive subsidies to purchase coverage;
- Those who qualify would be enrolled in Healthy Families or Medi-Cal, the state's Medicaid program;
- Businesses with 10 or more employees would provide health benefits or pay into a state pool at a rate of 4% of payroll;
- Providers would contribute from their income—2% for doctors and 4% for hospitals; and
- The estimated $12 million cost would be funded by the state pool, employer taxes, provider contributions and redirected federal
grants.
Critics say the governor ruffled some feathers among small- and medium-sized business, but polls indicate that as many as
80% of Californians support the shared-responsibility approach.
