California Healthcare Recipes Could Whet National Appetite

In Washington, the debate over reforming the healthcare system seems to be on life support. The capital has largely turned the other way as a spiral of rising prices and declining access has increased the number of uninsured nationwide by more than 5 million since 2000. Proposals now advancing from President Bush and GOP congressional leaders to cut spending on Medicaid, the joint state-federal healthcare program for the poor, would probably push those numbers higher yet.

All of which makes the ferment over healthcare in California so timely. Almost every conceivable idea to expand health coverage for the uninsured is on the table in the state. These include a mandate on employers to insure their workers, a mandate on individuals to purchase insurance, a single-payer government-run healthcare system that would eliminate private insurance and a public-private partnership to guarantee coverage for all children.

If the state could reach consensus on any of these approaches -- or, more likely, a blend of them -- that could inspire action in other states and eventually encourage Washington to return to the problem. “This has to get solved nationally,” says Bruce Bodaken, the chairman and chief executive of Blue Shield of California. “But a single state solution, as an opportunity for other states and the federal government to look at what might work, makes a lot of sense.”

The breadth of ideas surfacing in California underscores the depth of the problem. Figures from the Census Bureau and UCLA’s Center for Health Policy Research show that about one-fifth of Californians lack health insurance. That’s among the highest rates of any state. The number of Californians without health insurance (an estimated 6.6 million) exceeds the entire population of 38 states.

That translates not only into inadequate care for those without insurance, but also enormous financial pressure on public hospitals and clinics and higher bills for the insured, whose premiums must fund the care the uninsured do receive.

An unexpectedly close ballot brawl in November helped propel healthcare onto the state agenda. With a late assist from Gov. Arnold Schwarzenegger, business interests passed a ballot initiative to repeal the mandate that former Gov. Gray Davis signed requiring employers in firms with at least 50 workers to insure their employees.

But the repeal initiative won by only 180,000 votes out of 11.6 million cast. That demonstrated a larger constituency for action on healthcare than many expected. “We never anticipated coming this close,” says Anthony Wright, executive director of the consumer group Health Access California. The narrow finish has inspired the unions and consumer groups that fought repeal to begin planning their own initiative, probably for 2006, to reimpose the business mandate.

Meanwhile, a diverse coalition is trying to build on the state’s most promising recent healthcare initiative. Individual counties across California have imaginatively combined public and foundation dollars to guarantee health insurance for all children. An alliance called the 100% Campaign now wants Sacramento to expand the program statewide -- and guarantee it a permanent source of public funding, perhaps with a private trust fund as a supplement.

“The counties are not going to be able to continue what they are doing without a stable financing source,” says Wendy Lazarus, co-president of the Children’s Partnership.

Two other ideas define the debate’s ideological poles. Keith Richman and Joe Nation -- a Republican and Democrat, respectively, in the state Assembly -- have proposed legislation to require all state residents to purchase insurance against catastrophic healthcare costs. But since that plan would leave the uninsured -- most of them lower-income workers -- liable for the first $5,000 in expenses, many health advocates say it “isn’t health insurance for people, it’s financial insurance for hospitals,” as E. Richard Brown, director of the UCLA center, puts it.

At the other extreme, Democratic state Sen. Sheila Kuehl of Santa Monica has proposed a government takeover of the healthcare system, which still excites many on the left. But the idea’s cost and complexity stamps it as more a statement of principle than a viable option.

Bodaken says medical, business and consumer groups are meeting to explore a consensus approach that apportions costs for universal coverage among business, individuals and government. That’s probably the best option, but insiders doubt all of the divergent interests involved can agree on a single plan.

The missing piece in this productive maneuvering is Schwarzenegger. The governor has expressed some general interest in several of these ideas. Kim Belshe, his Health and Human Services secretary, strikes the right note when she says the administration believes the key to expanding coverage is to “acknowledge it is a shared responsibility” among business, government and individuals.

But unless the governor bends his opposition to new taxes or new mandates on business, he’ll lack the resources for more than modest action. If anything, his fiscal priorities may compound the problem. Though Schwarzenegger didn’t cut Medi-Cal, the state’s Medicaid program, as much as expected in his latest budget, advocates worry that his proposal for caps on state spending will eventually compel eligibility reductions that increase the number of uninsured.

California could make different choices that direct more resources to health coverage. But ultimately even a state as wealthy as California can’t permanently reverse the trends reducing access without national action. The problem is that national action may not come until more states create momentum by acting first. It may sound paradoxical, but as California struggles with its healthcare crisis, the best way for the state to attract national help is to move forward without it.

Ronald Brownstein’s column appears every Monday. See current and past columns on The Times’ website at www.latimes.com/brownstein.