The state Senate's abrupt rejection of Gov. Arnold Schwarzenegger's ambitious plan to extend health insurance to millions of Californians has continued to reverberate, setting the stage for high-stakes political and legal battles.
Democratic senators who killed Schwarzenegger's complex scheme early this year preferred, instead, to eliminate all private health insurance and create a $200-billion-a-year, state-managed "single-payer" system. They sent a bill to that effect – one quite similar to those he had vetoed in the past – to his desk.
At the same time, health-access advocates cannibalized portions of Schwarzenegger's plan, especially those that imposed new regulations on private insurers, and wrote them into individual bills that also made it to his desk last month.
Schwarzenegger reacted by vetoing them, including the single-payer measure, citing "annual shortfalls of $42 billion" in financing. The net effect of an almost two-year exploration of the politics of health care, therefore, was virtually nothing. That's in keeping with the Capitol's nearly unblemished record of failing to resolve complex public policy issues.
With California's health care stakeholders exhausted, the unspoken consensus is to wait to see what Congress and the next president, whoever he may be, can devise before taking up the Sacramento battle again with a new governor.
The death of Schwarzenegger's scheme, meanwhile, meant that one of its key provisions, imposing financial mandates on employers to provide some level of insurance for their workers, didn't get the judicial test that certainly would have followed its enactment. The pay-or-play mandate stretched, perhaps to the breaking point, tight federal restrictions on benefits that states and local governments can mandate.
As Schwarzenegger's plan was being unveiled nearly two years ago, a federal appellate court in Maryland voided a state law imposing health care mandates on large employers, aimed specifically at Wal-Mart, because of the 1974-vintage federal law (dubbed ERISA) that imposed uniformity on employee benefits. It followed a similar ruling by another federal appellate court regarding Hawaii's health care mandate on employers.
The issue appears headed to the U.S. Supreme Court, however, because the same 9th U.S. Circuit Court of Appeals that ruled in the Hawaiian case has now upheld San Francisco's 2-year-old mandate on employers to pay the equivalent of certain hourly amounts for health care, either directly or through a city-operated health program for the uninsured.
The California court, known for its liberal bent, is seemingly daring the Supreme Court to take up health care. Were it to validate San Francisco's plan, we could see an explosion of similar mandates at state and city levels. Were it to void the plan, health care is likely an issue that will be solved only by the federal government, if at all.
Call The Bee's Dan Walters, (916) 321-1195. Back columns, www.sacbee.com/walters.
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