Health care veto is vowed

Gov. Arnold Schwarzenegger on Wednesday threatened to veto Democrat-backed health care legislation if it relies solely on employers to pay for coverage, upping the stakes on negotiations to enact controversial fees and require all individuals to obtain coverage.

The Republican governor, meeting with The Bee's editorial board, said he would "absolutely" consider seeking a ballot initiative for a health plan if talks fail in the Legislature. As another option, the Governor's Office indicated Wednesday that he remains open to keeping lawmakers in Sacramento beyond the Sept. 14 close of the session if necessary to reach a health care agreement.

But Schwarzenegger said he will not sign a plan by Assembly Speaker Fabian Núñez and Senate President Pro Tem Don Perata as it stands now. Their Democratic proposal, Assembly Bill 8, would require employers to spend 7.5 percent of payroll on employee health care.

"If anyone over there thinks that I will sign a bill that comes down to me that has only employer mandate, they shouldn't," he said. "I won't sign it. It won't happen. Because we will never have a chance again to go back and cover the rest."

The governor in January proposed charging 4 percent on hospital revenues, 2 percent on doctor revenues and 4 percent on employers with at least 10 workers if they do not provide health insurance. He wants to require all Californians to obtain minimum coverage while forcing insurers to cover everyone regardless of pre-existing conditions.

While his aides acknowledged persistent opposition from doctors, Schwarzenegger was more hopeful of reaching agreement with hospitals, describing talks as going in the "right direction."

"We want to have shared responsibility, which is extremely important," he said. "We don't believe we should go back to (legislation) where it is just employer pays. All of those different things that I am talking about, they are connected, the dots are connected. It is like a balancing act, a human pyramid. You take one person out, and the whole thing collapses."

Jan Emerson, spokeswoman for the California Hospital Association, said Wednesday that hospital officials are negotiating with the governor but remain opposed to what she called a "provider tax." She acknowledged that hospitals could see an increase in federal dollars from the governor's plan but that only some hospitals would benefit.

"With this provider tax, there would be winners and there would be losers ... and many losers would be hospitals already on the financial edge," she said.

Doctors say the governor's proposed charge on their revenues is unworkable, said Dustin Corcoran of the California Medical Association.

Spokesmen for Perata and Núñez called on Schwarzenegger to meet in earnest to reach a compromise, suggesting that the governor has yet to do so.

"When the governor decides to roll up his sleeves and engage with the speaker and Senator Perata, we are confident we can resolve the minor differences we have and complete comprehensive health care reform," Núñez spokesman Steven Maviglio said in a statement.

A long budget impasse that ended Tuesday has left Schwar-zenegger and lawmakers little more than three weeks to agree on the health care overhaul. Senate Republicans resisted voting for the budget for weeks, and tensions flared between GOP lawmakers and Schwarzenegger during the dispute.

If a legislative counsel opinion proves correct, the governor will need GOP votes for his health care plan because the levies he proposed would be considered taxes and, as such, require two-thirds approval.

Before meeting with The Bee, the governor attended an AARP rally outside the Capitol and urged 1,000 members in attendance to pressure lawmakers.

Despite the budget fight, Schwarzenegger told The Bee's editorial board he still holds out hope that Republicans will provide votes for a health care plan this session.

"We have to figure out how we're going to do that," he said. "I know that's going to be very difficult but that should not make us shy away from attacking the problem."

Anthony Wright, director of Health Access California, a statewide health care consumer advocacy coalition, questioned why Schwarzenegger threatened to veto AB 8 when it shares similarities with his own plan.

Wright said the governor mischaracterized AB 8 as relying solely on employers when the Democratic bill also draws on funds from individuals and the federal government, which are also part of the governor's proposal.

"It doesn't make sense to oppose reforms that he endorses," he said. "Not being able to do some reforms should not be an excuse not to do other reforms."

Wright said the significant difference between the governor's plan and AB 8 is that the legislation can reach his desk without support from Republicans because it does not include fees on hospitals or doctors. By threatening a veto of AB 8, the governor puts more pressure on himself to seek Republican votes to pass fees, Wright suggested.

Should a health care deal falter in the Legislature, Schwarzenegger said he would consider pursuing a ballot initiative to overhaul the state's health care system. He cited Field Poll numbers showing that 69 percent of California voters are dissatisfied with the current system.

"Well, ballot is always a choice, absolutely," he said. "Because, why not ask the people if they want to go in that direction?"

The governor bristled at a suggestion that Núñez and Perata may believe they can force the governor to sign whatever health care bill they send him.

"I have heard that the speaker is saying, if it comes to it, I will even sign a shoe that he sends down," Schwarzenegger said. "And I said I will sign a shoe that you put on eBay to raise money for some charity. But I will not sign a bill that does not have everyone covered and does not address affordability and bring the costs down."

About the writer:

• The Bee's Kevin Yamamura can be reached at (916) 326-5548 or kyamamura@sacbee.com.