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Good news and bad news in governor's health plan

There's good news and bad news in the sweeping health insurance plan that's a key part of Gov. Arnold Schwarzenegger's agenda for this year.

The good news: He's at last admitted there is a problem and wants to cover everyone. Just about a year after he vetoed a bill aiming to set up government-run health care, he's now ready to have government fund insurance for those who can't afford even small premiums. And he insists he's willing to listen to ideas from almost anyone else.

The bad news: If, as many claim, obscene health insurance company profits are a big part of the problem, the Schwarzenegger plan will only worsen things. Working poor people able to buy only the bare-bones minimum policy this plan offers would often get nothing for their money, as a $10,000 annual deductible would leave the vast majority still responsible for all their own bills except in case of a catastrophic illness or accident.

"For a lot of people, it's really no different from no insurance at all," observes Democratic state Sen. Sheila Kuehl of Santa Monica, author of the plan Schwarzenegger vetoed last year.

Nevertheless, this is the first time since the days of Earl Warren in the late 1940s that any California governor has been willing to consider the idea of universal health insurance. Sure, others have talked about insuring all children, and there was progress in this direction under ex-Govs. Pete Wilson and Gray Davis. Still, neither of them addressed the needs of the millions of adults who make up the majority of the uninsured 25 percent of Californians.

But Schwarzenegger is treading on delicate territory here, as discovered ruefully by everyone who has tried to confront the health insurance issue during the last 20 years. It took former first lady, now New York Democratic Sen. Hillary Clinton, more than five years to recover from negative advertising hurled her way when she tried it.

No one, however, is likely to try such an ad campaign against Schwarzenegger this year.

For one thing, his plan carefully avoids doing major harm to any of the interest groups capable of putting on a major effort against him.

The big businesses that are Schwarzenegger's largest financial backers all now provide health insurance to their employees. In no known case does spending on this fall below the 4 percent-of-payroll threshold Schwarzenegger would set as a minimum for all companies with 10 or more employees. So there will be no vilification from the likes of Chevron, PG&E, Sempra Energy, Seagate, Google, Viacom or even any large corporate farms.

Health insurance companies that funded a good share of his 2006 campaign and his inaugural festivities also do fine under the governor's plan. There are no new restrictions on their profits or the salaries of their top officials. They would continue to administer the vast majority of health care in the state and might attract as many as 4 million new customers, even though they could no longer turn anyone away for medical reasons. Not much here for them to complain about.

Even though doctors and hospitals would be forced to kick in a percentage of their overall profits, they would also likely come out fine in this plan, as Medi-Cal would now be paying them to care for many thousands of indigents who now are charity cases at best.

What problems there are would arise mostly for the little guys, specifically the working poor. Labor unions, for instance, complain that asking workers to pay between 3 percent and 6 percent of their earnings is too much. And some union leaders speculate that employers may find it cheaper to drop their current plans, give the state 4 percent of their payroll and plunk their workers into the state pool.

Because the plan so far makes no effort to spell out quality controls, there could be wide variance in the kinds of treatment offered to patients and how it is administered. Some plans might have large co-pays for routine visits to doctors' offices, others might have somewhat higher premiums and low co-pays.

Then there's the problem of illegal immigrants. Only 32 percent of voters want them included in any plan, as Schwarzenegger would do, according to a January survey. That's one reason no plan will make it through the Legislature this year or next if passage requires a two-thirds legislative vote. And it would take such a supermajority if the newly mandated payments from businesses and individuals are considered taxes and not fees.

More likely, therefore, is any plan that passes will cover the illegal only for treatment of contagious diseases and life-threatening traumas.

The bottom line: If Schwarzenegger wanted a simple, universal health insurance system, he could have adopted the single-payer, choose-your-doctor system he has long opposed.

But that would decimate several of his biggest donors, so he won't allow it -- which means that while he says he's willing to entertain all ideas, what he really means is that he'll listen to anything that won't hurt his pals and contributors. That's far from perfect, but at least it could lead to significant progress toward solving one of California's longest-running and least fair problems.

Elias is author of the book "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government's Campaign to Squelch It." Send comments to thomas.elias@sddt.com. Comments may be published as Letters to the Editor.

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