Dan Walters: Health plan not dead, but gasping

The much-trumpeted efforts by Gov. Arnold Schwarzenegger and legislative leaders to provide health insurance to millions of working poor Californians aren't dead, but are, to put it charitably, on life support.

Left to their own devices, Republican Schwarzenegger and Democratic lawmakers such as Assembly Speaker Fabian Núñez probably could reach a deal, but they are not free agents, and must, under the Capitol's unwritten rules of political engagement, protect the interests of their major constituent groups.

That means that Schwarzenegger can only go so far without losing support from major private employers and that Núñez must deal with unions and other liberal interests.

The hang-up, as it always is, is money – more specifically, who will cough up the billions of dollars, at least $10 billion a year and perhaps $15 billion or more, that it would take to cover those now without health insurance and who, by definition, cannot pay for it themselves.

Schwarzenegger calls for "shared responsibility" but wants to limit the hit on employers while requiring consumers to dig deeper, and perhaps tapping hospitals and revenue from leasing the state lottery. But the Democrats don't like requiring consumers to pay more and want employers to take up the slack.

The details are much more complicated than that, of course, but that's the essence of the conflict that so far, despite months of public declarations and private negotiations, has defied resolution.

Even were health care to be resolved politically, a plan that relies heavily on employers would have to survive legal challenges that it violates federal law mandating national uniformity of employer-paid benefits. And it would have to pass muster with voters, the vast majority of whom already have health coverage and, according to a new Field Poll, don't rank health care for the poor as a major concern.

It's still possible that something grand and glorious could happen, but the odds against it are lopsided, reflecting the Capitol's chronic inability to deal with complex, high-dollar issues that have numerous, often- contradictory "stakeholders."

The American system of government is essentially a negative one, purposely making it difficult to make public policy by diffusing authority, and we Californians have made it even more so by creating more political and legal hurdles such as two-thirds legislative votes, initiatives and referendums. As a practical matter, therefore, any major interest group that doesn't like the outcome of any particular issue has myriad pathways to blocking action. Or to put it another way, politicians have to achieve near-unanimity on any issue to have a chance of enactment.

Schwarzenegger, Núñez et al. are not only seeking agreement among themselves, therefore, but "sign-offs" from the almost countless interest groups involved.

The governor, for example, eliminated a tax on doctors in his original proposal rather than face their implacable opposition, and is proposing, instead, to lease out the lottery. But when politicians move in one direction to satisfy one stakeholder group, they create new complications, in this case skepticism from educators because schools now are the sole beneficiaries of lottery money.

The flip side is that even if politicians were to refine the product to eliminate all significant interest group opposition, it could turn out to be an unworkable mishmash, as the 1996 deregulation of electric utility services demonstrates. If anything, health care is even more complicated than the utility business because it involves much more money, has many more stakeholders and has an emotional factor.

So will it happen?

Not likely, and politicians may have to settle for tokenism, such as covering all children, if they can even find the money for that.

About the writer:

• Call The Bee's Dan Walters, (916) 321-1195. Back columns: www.sacbee.com/walters