Gov. Arnold Schwarzenegger (R-CA), who had previously described national health care reform as “health care to nowhere” that’s infected with “bribes, deals and loopholes,” is expected to announce today that California will fully comply with the new law. According to an advance copy of a speech obtained by the AP, the governor will call on lawmakers to set politics aside and “start implementing the law.” “If reform is to succeed, he says, it is up to the states to make it happen.” Schwarzenegger’s endorsement will make him the first Republican governor to publicly support health reform, delivering a major victory for HHS Secretary Kathleen Sebelius, who been trying to portray the law as beneficial to the states. The governor’s support also comes as Republicans across the country are distancing themselves from reform, suing the federal government, and refusing to implement its early provisions.
- Effective Immediately — Small Business Tax Credits: According to a March issue brief from UC-Berkeley’s Center for Labor Research and Education, California residents who work at small businesses or are self-employed represent a disproportionate 71% of the state’s total uninsured population. The center estimates that small California businesses could receive more than $4.4 billion in tax credits over 10 years through the reform provision.
- April 1, 2010 — Medicaid Expansion Option: By Jan. 1, 2014, states are required to expand Medicaid eligibility to non-elderly residents with incomes less than 133% of the federal poverty level. However, the reform law allows states as of April 1, 2010, to phase in the Medicaid expansion to take advantage of federal matching dollars…. California and other states that face significant budget shortfalls are unlikely to expand their Medicaid programs before 2014. California officials have estimated that it will cost the state $2 billion to $3 billion more each year to cover new Medi-Cal beneficiaries.
- Effective 90 Days After Enactment — High-Risk Pools: California already has a high-risk pool — the Major Risk Medical Insurance Program — but it does not meet the requirements of the new health reform law because it caps enrollment at 7,100 and insurance benefits at $75,000 per year because of limited funding. The federal high-risk pool under the reform law calls for subsidized premiums and no annual caps on benefits. A bill (AB 1887) by Assembly member Mike Villines (R-Clovis) would establish a new high-risk insurance pool that would operate alongside MRMIP until 2014, when health plans will be prohibited to deny coverage to individuals because of pre-existing conditions.
- Effective Six Months After Enactment — Extending Coverage for Young Adults: UCLA’s 2007 California Health Interview Survey found that 29.5% of Californians ages 23 (when most health plans stop covering dependents) through 25 were uninsured. Some health plans, including California giant Kaiser Permanente, have announced that they will comply with this reform provision before it takes effect in September.
- Effective Six Months After Enactment — Prohibiting Pre-Existing Condition Exclusions for Children: The reform law prohibits health plans from excluding coverage to children with pre-existing conditions. By 2014, this provision will apply to all individuals. Assembly Member Mike Feuer (D-Los Angeles) has introduced a bill (AB 2244) that would go beyond the federal health reform provision by also limiting discriminatory changes for children with pre-existing conditions.
In 2007, Schwarzenegger unsuccessfully attempted to reform California’s health care system. Much like the new national law, his plan would have required Californians — even illegal immigrants — to purchase health insurance coverage, mandated businesses with 10 or more employees to offer insurance or pay a fee and expanded public health programs. Schwarzenegger’s proposal would have prohibited insurers from denying coverage to individuals with pre-existing conditions and required companies to spend at least 85% of their premium proceeds on patient care.