Health on Back Burner for Gov.-Elect
By VITA REED
Employers looking for Gov.-elect Arnold Schwarzenegger to move quickly on healthcare reform could be disappointed.
The big issue: Senate Bill 2, signed by Gov. Gray Davis in the days leading up to the recall.
SB2, which mandates employer-covered healthcare for companies with as few as 20 employees, has enraged companies who claim it’s another way the state is making it hard to do business here.
The healthcare murkiness extends to Schwarzenegger’s transition team.
A healthcare policy leader hasn’t been named, according to a spokesman in the governor-elect’s Sacramento office. And a look at biographies of the 65-member bipartisan transition group finds few with any direct health experience on the team.
Schwarzenegger backers say there are too many budget issues to take on before healthcare is addressed.
“There are a number of crises that are absolutely on boil in this state,” said state Assemblyman John Campbell, an Irvine Republican and Schwarzenegger ally. Budget issues “are clearly going to be the first priority to this administration,and they have to be.”
That doesn’t mean SB2 isn’t important, Campbell said.
“It is, but it’s one of many issues where a crisis has not yet occurred,” he said.
The law’s implementation is some time away, with a phase-in period for large employers in 2006, midsize employers in 2007 and small ones in 2008.
Early on, Schwarzenegger said he plans to repeal the tripling of car registration fees while finding a way to plug the state’s growing deficit. Other key moves include pushing Schwarzenegger’s own brand of workers’ compensation reform and repealing Gov. Davis’ law approving drivers’ licenses for undocumented immigrants.
But employers roiling over double-digit healthcare premium hikes are doubly angry about SB2.
The law requires companies with more than 20 workers to pay 80% of workers’ health coverage or an equivalent fee into a state pool that provides coverage. Employers with 200 or more workers must pay for dependants’ care.
Schwarzenegger has said he’s opposed to requiring businesses to cover health benefits. But he hasn’t offered details on how he might deal with SB2.
One option could be proposing “clean-up” legislation to help reduce the mandated health benefit law’s impact on employers.
If Schwarzenegger moves in that direction, he’ll likely face a fight with powerful Democratic state Senate leader John Burton, who used a great deal of his political clout to get SB2 through the Legislature.
But Schwarzenegger will face pressure from businesses to get something done.
“What it really would do is raise the cost of business, which he’s been opposed to,” said Paul Feldstein, a health economics professor at the University of California, Irvine’s Graduate School of Management. “By raising the cost of business, it would result in some unemployment of low-wage workers. I don’t think it would be the kind of thing he would favor.”
At least one issue related to healthcare,workers’ compensation reform,promises to be among the first things Schwarzenegger looks at when he’s sworn in.
During Schwarzenegger’s recall campaign, he denounced Gov. Davis’ reforms and promised to introduce what he’s called “real reform.”
Schwarzenegger’s approach is three-pronged. First, a method is set to be developed to evaluate and rate disabilities, a contentious issue that wasn’t addressed in Davis’ legislation.
Second, Schwarzenegger wants to set up an independent medical review board made up of doctors without ties to the employer or injured worker.
Lastly, the governor-elect is expected to push for objective standards for treating injuries “to reduce widely diverging medical care recommendations for similar diagnoses.”
Getting Schwarzenegger’s plans through isn’t guaranteed,lawmakers typically want to wait a year to see how just-enacted reforms actually work. And trial attorneys are lining up to fight against any bill that makes it more difficult for injured workers to get treatment.
But a strong push is expected.
“Workers’ comp is at a crisis level right now,” Campbell said.
He said he expects a special legislative session to deal with workers’ comp reform in late November or early December.
Schwarzenegger also may be confronted in the coming months with some tough budget-related decisions on state-sponsored Medi-Cal and Healthy Families spending.
Medi-Cal, a health insurance program for poor, elderly and disabled Californians, is a heavy source of funding for the state’s nursing homes. Healthy Families provides coverage to children whose parents work, but do not receive health coverage through their employers and can’t pay for private coverage.
How Schwarzenegger addresses such issues “may be a fight between the two Arnolds,the fiscal conservative and the compassionate moderate,” said Drew Altman, president of the Kaiser Family Foundation, a Menlo Park-based healthcare think tank.
Schwarzenegger has said in the past that he supports expanding the Healthy Families plan.
Healthcare bureaucracy is another issue that Schwarzenegger could address.
Some critics contend that the state Department of Managed Care, which regulates health maintenance organizations and other types of health plans, is overloaded with lawyers and places a heavy burden on businesses.
Some lightening of the state bureaucracy could come after Schwarzenegger’s audit.
“I have no expectations for him. I only have hope,” said Godfrey Pernell, president of Dental Health Services, a Long Beach dental healthcare plan.
