Schwarzenegger and health care: Don’t get greedy

The Governator announced today his new plan for California health care. From the very sketchy details currently available, it doesn’t seem like a terrible plan, although it could be better.

It appears to be basically a pay-or-play program similar to the kind that he opposed a couple of years ago: business must either ensure their workers or pay 4% of their payroll into a state program. It also put a 2% tax on doctors’ receipts and a 4% tax on hospitals. Healthy Families (California’s CHIP program) would be expanded to cover all children who aren’t otherwise covered, bringing some federal money in.

There are two points to make here:

1) We shouldn’t get greedy. The most popular Republican governor–perhaps the popular Republican period–has a proposal for universal health coverage. Progressives now bemoan rejecting Bush I’s proposals in 1991, Reagan’s federal Medicaid buyout, and Nixon’s FAP. I would rather take universality and then work on building a better model. Yes, single-payer would be better, but no, we’re not going to get it now. Besides, more radical surgery at the state level might risk ERISA pre-emption.

The test will be what the proposal requires of health plans. If it is not much, then businesses might just drop their employer coverage and pay into the system. If the requirements are limited, then most people might wind up with worse coverage than beforehand. That won’t fly. But let’s see.

2) This will be settled in the courts. Already the right-wing Assembly GOP leader has opposed any plans with new taxes. But Fabian Nunez, the Democratic Assembly Speaker, said that Schwarzenegger’s plan would only need majority legislative support. This is an aggressive posture: generally speaking, tax increases and the state budget need a two-thirds majority, which means that they need at least some legislative Republican support.

If this thing (or something like it), passes with less than two-thirds support, some group (probably bankrolled by right-wing groups) will sue. That means it could be up to the California Supreme Court to decide the matter. That court is almost obsessive about not interfering in political decisions, so I would expect upholding of the law. But you never know.

UPDATE: An excellent site to stay up to date on this is the Sacramento Bee’s Crossroads/Health Care blog. it reports that the California Nurses Association, which did so much to block Schwarzenegger’s special election chances, is coming out full-blast against the proposal because it isn’t single-payer. Sigh. CNA is a good organization, but they are having a hard time taking yes for an answer–maybe because the hospital tax threatens their membership. The CEO of Health Net is enthusiastic–maybe because it ISN’T a single-payer system. Dan Weintraub, the Bee reporter who manages the site, reports on the legal aspect: the key here is that the Administration says that it isn’t a “tax” but rather a “fee”–which only requires a majority vote. I think that the state Supreme Court is likely to agree: it has been very generous on the fee/tax distinction in previous cases.

Author: Jonathan Zasloff

Jonathan Zasloff teaches Torts, Land Use, Environmental Law, Comparative Urban Planning Law, Legal History, and Public Policy Clinic - Land Use, the Environment and Local Government. He grew up and still lives in the San Fernando Valley, about which he remains immensely proud (to the mystification of his friends and colleagues). After graduating from Yale Law School, and while clerking for a federal appeals court judge in Boston, he decided to return to Los Angeles shortly after the January 1994 Northridge earthquake, reasoning that he would gladly risk tremors in order to avoid the average New England wind chill temperature of negative 55 degrees. Professor Zasloff has a keen interest in world politics; he holds a PhD in the history of American foreign policy from Harvard and an M.Phil. in International Relations from Cambridge University. Much of his recent work concerns the influence of lawyers and legalism in US external relations, and has published articles on these subjects in the New York University Law Review and the Yale Law Journal. More generally, his recent interests focus on the response of public institutions to social problems, and the role of ideology in framing policy responses. Professor Zasloff has long been active in state and local politics and policy. He recently co-authored an article discussing the relationship of Proposition 13 (California's landmark tax limitation initiative) and school finance reform, and served for several years as a senior policy advisor to the Speaker of California Assembly. His practice background reflects these interests: for two years, he represented welfare recipients attempting to obtain child care benefits and microbusinesses in low income areas. He then practiced for two more years at one of Los Angeles' leading public interest environmental and land use firms, challenging poorly planned development and working to expand the network of the city's urban park system. He currently serves as a member of the boards of the Santa Monica Mountains Conservancy (a state agency charged with purchasing and protecting open space), the Los Angeles Center for Law and Justice (the leading legal service firm for low-income clients in east Los Angeles), and Friends of Israel's Environment. Professor Zasloff's other major activity consists in explaining the Triangle Offense to his very patient wife, Kathy.