Unions give up on gov.’s health plan

SACRAMENTO -- Abandoning their facade of cooperation, a coalition of California labor unions and consumer groups says it is gearing up a campaign to discredit Gov. Arnold Schwarzenegger’s healthcare proposal as too expensive for many workers.

Organizers say they will trail Schwarzenegger throughout California to challenge and rebut him, hold prayer vigils and news conferences, press elected officials to oppose his proposal and run critical ads on television. They plan to deride the governor’s program as the “Arnold Middle-Class Gouge.”

The coalition, which includes most major unions and two prominent consumer groups -- Health Access California and Consumers Union -- has hired one of the nation’s most aggressive Democratic strategists to run the campaign.

The campaign represents a break from labor leaders’ strategy, which had been to encourage Schwarzenegger’s efforts while gently prodding him in their direction. Leaders say they no longer believe that the governor will ever agree to their priorities without pressure.

“The year for healthcare reform has been a failure, and it has largely been a failure because of the governor,” said Art Pulaski, head of the California Labor Federation.

Unions have successfully employed a strategy to drive down the governor’s popularity with the public in the past -- in 2005, for example, when they defeated his special-election agenda.

But the campaign could backfire by turning voters against big changes to the state’s healthcare system, including methods favored by unions. That might benefit Republican lawmakers, Blue Cross of California and business groups that have opposed a wholesale overhaul along the lines envisioned by Schwarzenegger and Democratic leaders.

“There is a chance the voters might say, ‘This is all too complicated and let’s wait,’ ” said Mark Baldassare, president of the Public Policy Institute of California, a nonpartisan research group.

The planned campaign also could undermine whatever goodwill there might be in healthcare negotiations between Schwarzenegger and Democratic lawmakers long aligned with unions.

“People need to take a step back and ask how to pass healthcare reform, not how to poison it,” said Schwarzenegger spokesman Adam Mendelsohn. “I don’t think anyone would have guessed that healthcare would be threatened at the end of the day more by unions than by insurers and other special interests.”

But the patience of many labor leaders and consumer advocates expired when Schwarzenegger’s staff showed them the updated version of the governor’s healthcare plan. Labor leaders walked out of a meeting late last month in the governor’s Capitol conference room in anger. Since then, labor has been faulted for being inflexible and blamed by Schwarzenegger advisors and some healthcare lobbyists for the lack of a deal.

Although Schwarzenegger’s latest plan, released last week, contained some concessions to labor, including increasing the number of families who could get subsidies for insurance premiums, from the unions’ perspective it did not go nearly far enough. Unions are particularly upset that the governor has not demanded more of employers.

Starting Wednesday, they plan to publicly argue that Schwarzenegger’s plan is unaffordable for many. It would require individuals earning more than $35,735 and families of four making more than $72,275 to buy insurance without any subsidies for the costs. Unions say those thresholds are at least $10,000 too low.

Organizers also plan to distribute to elected officials the results of a public opinion poll supporting the unions’ position, and to target the “healthcare czar” -- head of the state health and human services agency. Under the governor’s plan, the agency would be given vast authority to decide what benefits insurers must provide and what kinds of patient safety information hospitals and doctors must release.

The campaign is being led by Chris Lehane, a San Francisco political consultant who has handled public relations for President Clinton on the Whitewater allegations, former Gov. Gray Davis on the energy crisis and Michael Moore for his films.

Highly influential groups such as AARP, the advocacy group for the elderly, that are not part of the labor coalition are also ready to come out aggressively against Schwarzenegger’s plan. AARP told the governor last month in a private letter obtained by The Times that it would “vigorously oppose” his plan unless it ensured that health insurance was affordable to Californians.

Some vitriol is likely to surface if the Legislature holds hearings on the governor’s plan in coming weeks.

The labor groups are threatening to bring their own proposal to the voters in a ballot initiative next year. It would place most of the financial responsibility for providing insurance on employers, as did the Democratic healthcare overhaul vetoed by Schwarzenegger last week.

A similar measure that passed the Legislature in 2003 was narrowly rejected the following year in a referendum brought by business groups, but labor groups think concern about healthcare has risen to the extent that the public would accept such a measure now.

However, the 2008 ballot could end up crowded with other measures on the same subject, a situation that traditionally has tended to doom all. Business groups are toying with an initiative that would raise the sales tax to expand the state’s healthcare programs, and the California Nurses Assn. favors an initiative that would abolish all private insurers in favor of coverage paid for by the state through payroll and individual taxes.

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jordan.rau@latimes.com