Major Health Coverage Bill Given No Chance This Year : Legislature: Progress on the issue is blocked by conflict among powerful special interest groups.

Unable to overcome incessant conflict among some of the state’s most powerful special interests, lawmakers have conceded that there is no chance now to pass a comprehensive health insurance bill before the Legislature adjourns for the year.

With insurance premiums climbing dramatically and more than 5 million Californians lacking even basic medical coverage, legislators and the governor had hoped to strike a deal this year to cover the uninsured and contain health care costs for everyone.

But none of about half a dozen proposals put forward was able to generate a consensus among the affected interest groups, which include business, labor, doctors, hospitals, insurers and consumer groups.

The most that lawmakers might do before they leave town on Friday is pass a Democrat-backed plan to create a “blueprint” for a health insurance solution. But even that program, contained in a measure passed Tuesday by a two-house conference committee, could not be implemented without further, bipartisan action from the Legislature next year and a vote of the people in 1992.

“The timing wasn’t right this year,” said Senate Republican Leader Ken Maddy of Fresno, who opposed even the tentative proposal put forward by Democrats. “Perhaps things are not quite bad enough in the state to allow us to get something like this through both houses of the Legislature.”

Assemblyman Burt Margolin (D-Los Angeles), who has led months of negotiations on the issue, said his hopes of passing a full-scale solution this year were dashed by the reluctance of powerful interest groups and lawmakers to compromise.

“The organizational dynamic around here is you introduce your own bill, and you say yes on that and no on everybody else’s bill,” Margolin said.

Margolin’s fallback plan, which has virtually no Republican support, would create a framework for a health insurance program under which all employers eventually would have to provide insurance for their workers or pay a tax. Even if that bill were enacted, the program would not take effect unless lawmakers returned next year and approved a way to finance it and then get it approved by the voters in 1992.

“This isn’t the final decision,” Margolin said. “If it was the final, irreversible decision, we’d have no chance. The compromise I’m willing to make is to start with phase one, lay out the blueprint and take my chances next year.”

The failure of the Legislature to solve the crisis this year all but guarantees that two or more initiatives on the issue will appear on the ballot in 1992. The California Medical Assn. has proposed a program similar to Margolin’s plan but without the strictest provisions aimed at controlling medical costs. The other, proposed by Health Access, a San Francisco-based consumer-labor coalition, would create a Canadian-style system under which the government would bear the cost of health care for everyone.

Maryann O’Sullivan, executive director of Health Access, said she believes that nothing short of the threat of an initiative will push the special interests, particularly doctors, hospitals and insurance companies, to negotiate.

“They seem pretty comfortable and unthreatened by the legislative process,” O’Sullivan said. “There’s such an incredible resistance to change. Everyone looks at it as threatening or frightening. To the big interests, a bad status quo is better than an unknown change.”

Maura M. Kealey, a lobbyist for the California State Council of Service Employees, blamed the stalemate on the alliance between business interests and the Assembly Republicans, who have the power to block any bill that needs a two-thirds majority to pass.

“The impression is that the people who don’t have health insurance are the lower-paid working people and the unemployed, and they’re not Republicans,” Kealey said. “Republicans don’t respond to those people. Republicans respond to big business.”

But Democrats, too, have their constituencies. One obstacle that blocked consensus on the issue was the insistence by the trial lawyer lobby that nothing be done to make it harder for people to sue doctors for malpractice. The lawyers, who are strong supporters of Assembly Speaker Willie Brown (D-San Francisco), contended that a 1987 agreement they made with the doctors as part of a major overhaul of the civil justice system protected them from any further “tort reform” until 1992.

All this means that it will be another year, and probably longer, before any program is in place to control medical and insurance costs and provide coverage for those who now lack it. Meanwhile, lawmakers involved in the issue have blocked more modest efforts for fear that a partial solution would reduce the pressure for a comprehensive program.

That frustrates Martyn Hopper, a lobbyist for the National Federation of Independent Business, which has steadfastly opposed any move to require employers to provide insurance. Hopper contends that companies would offer coverage voluntarily if small steps were taken to change the way insurance is sold, making it more affordable and stable for small businesses.

“Right now, you have people polarized,” Hopper said. “You have zealots on the left and on the right. We need to realize that some modest steps can be taken. There are legislators involved who feel very strongly that we need a comprehensive approach or nothing. That’s what we’re going to get--nothing.”