ABCs of health care debate

State lawmakers are engaged in special sessions to discuss water and health issues. Here's a primer on the health care debate.

Q: Why is the Legislature holding a special session on health care issues?

A: Gov. Arnold Schwarzenegger called the special session after he was unable to reach agreement with legislative leaders on a plan to reduce the number of Californians without health insurance, now estimated at 6.7 million. The Republican governor and Democratic lawmakers blamed the 52-day state budget impasse for their failure to reach a compromise during the regular session. But serious differences remain about how to pay for health care expansion. Republican lawmakers oppose any fee increases and are calling for an incremental approach rather than the sweeping changes proposed by the governor and the Democrats.

Q: How does the special session work?

A: The special session will work much like state budget negotiations. The governor has been meeting privately with the two Democratic leaders -- Assembly Speaker Fabian Núñez and Senate President Pro Tem Don Perata -- and Assembly Republican leader Mike Villines and Senate Republican leader Dick Ackerman. The chairmen of the Assembly and Senate health committees and administration health care officials and staff members in the Legislature are also lending their input.

Even without the support of any Republican lawmakers, the Democratic-dominated Legislature could pass a health care bill on a simple-majority vote. But without a two-thirds vote in the Legislature, voters would have to approve tax or fee increases to fund any proposal. Schwarzenegger and Democrats say voters will ultimately make the decision. Signatures would have to be collected to qualify a ballot initiative, with the November 2008 general election the likely target.

The special session designation allows the suspension of some legislative rules and allows measures approved with a majority vote to take effect 90 days after the session closes.

Q: What are Republicans proposing?

A: Republican lawmakers say the state should encourage market-based solutions instead of dramatically expanding the role of government in health care. Among their proposals is creating state health savings accounts, which the federal government has done. Republicans also want to encourage expansion of neighborhood clinics, which provide lower-cost care than hospitals and doctors. They also want to expand the state program of guaranteeing coverage for people with pre-existing medical conditions.

Q: What is the Democratic proposal?

A: Democrats would require employers to spend 7.5 percent of their payroll on health care and insurers to cover people with pre-existing conditions. Insurers would also be required to spend at least 85 percent of premiums on medical care. Their proposal would cover two-thirds of the people in the state without insurance, including all 800,000 children. The cost of employee contributions to insurance premiums would be capped at 5 percent of income.

Lurking in the background is a bill by Sen. Sheila Kuehl, D-Santa Monica, that would create a health care system run by the government and financed by employers and individuals. Kuehl's plan would cover all Californians and do away with the role of private insurance companies. Her legislation is similar to the one vetoed last year by Schwarzenegger, who favors more involvement by private markets.

Separately, the California Restaurant Association, which opposes both the governor's and Democratic proposals, has proposed a ballot initiative that would create a 1-cent sales tax to fund health care reform.

Q: What is the governor proposing?

A: The governor's $12 billion-a-year universal health care proposal aims to spread the financial burden among employers, hospitals and doctors. Many small businesses oppose the requirement that employers spend 4 percent of payroll on health care. Hospitals have agreed to Schwarzenegger's proposal to contribute 4 percent of their revenues. But doctors have adamantly opposed his proposal that they chip in 2 percent of their revenues. Schwarzenegger would also require individuals to contribute to their health care, with the state subsidizing the poor.

Q: Isn't it the federal government's job to provide health care? What is it doing and how will that affect the state's efforts?

A: The federal government provides matching funds for money spent by states on health care -- and the proposals under consideration in California call for maximizing those funds. But federal efforts to reduce the number of Americans without insurance have been stymied since a universal health care proposal championed by President Clinton and his wife, Hillary, was resoundingly defeated 13 years ago. This week, Hillary Clinton, now a candidate for the Democratic presidential nomination, unveiled another health care plan. It would require every American to have health insurance, offer generous subsidies to help pay for the policies and seek to tamp down on rising medical costs. Republican presidential contender Mitt Romney, who as governor of Massachusetts signed a universal health care bill that served as a model for Schwarzenegger's proposal, dismissed Clinton's proposal as "European-style socialized medicine."

About the writer:

• The Bee's Aurelio Rojas can be reached at (916) 326-5545 or arojas@sacbee.com.