A year of uneven progress toward wider health coverage

California leads way, developing blueprint across political lines

December 25, 2007|By New York Times News Service.

SACRAMENTO, Calif. -- A year that began with great ambition for major expansions of health insurance here and in other state capitals is ending with considerable uncertainty, as a second wave of change runs headlong into a darkening economy and political divisions over how to apportion the cost.

Though the governors of three big states - California, Illinois and Pennsylvania - proposed sweeping plans to restructure health care this year, none will finish 2007 with bills passed and signed.

In each state, the initiatives confronted entrenched opposition from insurance and other business lobbies that made it far more difficult to build a consensus for change than in the smaller New England states that acted in recent years.

Yet it also was a year of intriguing achievement, in California above all, where the Republican governor, Arnold Schwarzenegger, and the Democratic Assembly speaker, Fabian Nunez, drew up a bipartisan blueprint for bringing near-universal coverage to the country's most populous state.

Schwarzenegger and Nunez have yet to close the deal by gaining the support of the state Senate. But they demonstrated in their yearlong negotiations that a consensus on basic principles could be reached, perhaps setting a template for other states and for Washington.

"It's significant that what they've been talking about in California is similar to what many of the leading Democratic presidential candidates are talking about as well," said Larry Levitt, vice president of the Kaiser Family Foundation, which researches health care issues. "There seems to be some convergence at least on the part of those supporting universal health care on how to get there."

In addition to being the most populous state, California has among the country's highest proportions of uninsured residents, about 20 percent. There are more uninsured in California than there are total residents of Massachusetts, Maine or Vermont, the states that have set the pace for overhauling health care. Success here, therefore, would send a signal that such plans could be enacted in states with the heaviest burdens.

The Schwarzenegger-Nunez plan, which passed the Democratic-controlled Assembly last week, expands on the universal coverage law that Massachusetts passed in 2006. That state now requires insurance companies to offer coverage regardless of an applicant's health status and mandates that most residents have insurance by Dec. 31 or face a tax penalty of $219.

State officials project that more than 300,000 previously uninsured people will sign up in time, a third of them in a surge over the last month. That has put Massachusetts more than halfway to its goal of insuring everyone.

The downside, and one noted by states with widening budget gaps, is that the program is expected to exceed its first-year budget by at least $150 million.

While only a few states considered universal coverage plans, it was an active year for more incremental measures, said Laura Tobler, a health policy analyst for the National Conference of State Legislatures.

Maryland and Texas joined the 15 states that have created programs to subsidize insurance for small businesses and individuals, she said. Four states effectively guaranteed that all children could be insured through expanded eligibility for Medicaid and the State Children's Health Insurance Program, known as SCHIP.

While many health reform advocates felt that this non-election year provided the best political climate for change, now the focus might shift to the presidential campaign, where the leading candidates for the Democratic nomination have each proposed major overhauls.

Some state leaders could be tempted to wait out the year to gauge whether the next president will push for a national health plan that might subsume state efforts.

The essential problem, meanwhile, continues to worsen.

The Census Bureau reported that the number of uninsured grew to 47 million in 2006, a one-year increase of 2.2 million. The share of U.S. residents who had employer-based coverage dropped to 60 percent from 64 percent in 2000, according to the Economic Policy Institute, a liberal research group.

Because of its national influence, California will continue to command attention as Schwarzenegger and Nunez try to bring along the Senate president pro tem, Don Perata, a Democrat.

Other governors, in more centrist states, made less headway this year in overcoming opposition generated by efforts to contain health costs and to raise the revenues needed to subsidize premiums.

Illinois' Democratic governor, Rod R. Blagojevich, got nowhere with his proposals to pay for universal access to insurance by taxing gross business receipts and assessing employers who do not offer coverage to their employees. He then instigated a fight with his legislature and provoked a lawsuit by using his executive authority to widen eligibility for state-subsidized insurance programs.

In Pennsylvania, Gov. Edward G. Rendell, also a Democrat, failed to persuade his politically divided legislature to cover the state's 900,000 uninsured through an employer assessment. Like the California leaders, Rendell has now proposed increasing cigarette taxes, as well as raiding the surplus in a state fund designed to help doctors pay for malpractice insurance.

"It remains incredibly difficult for states by themselves to get all the uninsured covered," said Robert Blendon, a Harvard professor of health policy and political analysis.

"There just is not a consensus on who should pay."

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