The New York Times-20080128-Governor-s Health Plan In Trouble in California

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Governor's Health Plan In Trouble in California

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It has been a January to forget for Gov. Arnold Schwarzenegger of California.

Since the beginning of the year, the governor, who handily won re-election just 14 months ago, has had to confront a $14.5 billion budget deficit, declare a fiscal state of emergency and announce across-the-board cuts for almost every state agency, including schools, parks and prisons.

But for all that, the worst day of the month will probably be Monday, when a Senate health committee is expected to vote against Mr. Schwarzenegger's widely promoted and potentially legacy-defining bill on universal health care. A no vote would effectively kill the bill, which would also need voter approval to become law.

The bill, which would offer coverage to millions of uninsured Californians, passed the State Assembly in December but began to stall in the Senate last week after the state's legislative analyst raised questions about its financing and two prominent Democrats announced they would vote against it.

Chief among many Democrats' concerns was the proposal of a so-called individual mandate, a stipulation requiring every Californian to pay for and maintain a minimum level of health insurance, though some residents would be exempt because of low income or financial hardship. A new board would negotiate rates with insurance companies, while employers would be required to spend a minimum amount on health care, though contributions would be capped.

But for some, the numbers did not add up.

I just came to the conclusion that the working people are going to end up paying for it, said Senator Leland Yee, Democrat of San Francisco, who announced his opposition before a committee meeting last Wednesday. There's control for everybody else -- the employers are protected and the insurance industry. The only group that's vulnerable is the working people.

Asked to surmise its odds of passage on Monday, Mr. Yee was blunt. I wouldn't bet 5 cents on it, he said.

Since his re-election in 2006, Mr. Schwarzenegger, a Republican, has managed to work closely with the Democratic majorities in both houses in large part by distancing himself from his own party, announcing himself during his second inaugural as a centrist devoted to the party of California.

But that strategy has seemingly backfired on health care, experts on health policy say, as Republicans lined up against the bill early, and Democrats began tossing out their own competing health care ideas.

How would it be a winning strategy to ignore your party and in effect compete with ideas from your opposing party, and think you're going to end up on top? said Helen Ann Halpin, the director of the Center for Health and Public Policy Studies at the University of California, Berkeley. I'm not a rocket scientist, but this is a nonstarter.

Senator Dick Ackerman, the Republican leader, agreed, saying his fellow party members had philosophical differences with the plan from the beginning.

He felt the entire system had to be changed, Mr. Ackerman said. We felt 80 to 90 percent of the system was working. He wanted to throw the whole thing out. And generally, we think the system works.

Once the plan was unveiled, Mr. Ackerman said, Republicans were also upset by several of its ideas, including an increase in the cigarette tax and a provision that would have offered health insurance to nonlegal residents.

In addition to politics, the bill might have been put in jeopardy by other factors, including its timing -- a big-money plan pitched during a budget crisis -- as well as a kind of interlegislative rivalry between the Assembly and the Senate.

Senator Sheila Kuehl, a Democrat and the chairwoman of the Senate Health Committee, said she felt that the Democrats in the lower house had not carefully analyzed the bill before passing it.

I don't believe the bill got any kind of scrutiny in the Assembly, said Ms. Kuehl, who said she would vote against it. And I felt for once in its life it ought to have an airing. I think the Senate has the very serious responsibility to make a sound judgment about the fiscal security of this bill, which isn't there, and the potential impact on lower- and middle-class people, which is negative.

Ms. Kuehl presided over a marathon day of testimony Wednesday, just a day after the state's Legislative Analysts Office released a report about the plan's financial soundness, which included good and bad news for the governor.

There are sufficient revenues to support the program in the first year of operation (2010-11), read a paragraph in the report's summary. However, by the fifth year of the program (2014-15), annual costs exceed revenues by $300 million.

That was followed by an even more chilling assessment, which found a number of other fiscal risks and uncertainties could cost the state $1.5 billion more annually. And during the testimony, Elizabeth G. Hill, a legislative analyst and a nonpartisan fiscal adviser, and the report's author, amplified that sentiment. What you have before you is by no means the worst-case analysis, Ms. Hill said.

All of which has left even the most ardent supporters on the fence. Senator Don Perata, the Senate president pro tem and a co-sponsor of the bill, was not speaking to reporters on Friday, but a spokeswoman said he was taking the weekend to weigh his concerns.

If the measure does lose on Monday, Ms. Halpin said there might be a silver lining. If things get so much worse over the next six months, I think we'll find the politicians have much more political will to solve this problem, she said.

For his part, the governor seemed quiet on the issue, as his support -- in this legislative session, at least -- was dwindling. He issued a short statement on Wednesday, thanking the Legislature for being a great partner in health care reform.

I look forward to working with them and other members of our coalition to pass heath care reform, the statement read.

It just did not say when.

[Illustration]PHOTO: Gov. Arnold Schwarzenegger talking at a news conference last year about his health care plan. (PHOTOGRAPH BY MAX WHITTAKER/ASSOCIATED PRESS)