3 Senators to Offer Health Bill; Praise Garamendi Idea

Key Senate Democrats, praising a health care reform plan proposed by California Insurance Commissioner John Garamendi, said Tuesday that they will introduce legislation that calls for universal health coverage for all Americans but leaves the details of financing and the operation of the programs to the states.

If the idea gains support, it will represent a major shift in strategy by leading Senate health care reform advocates, who have been unable to agree on the details of complex reform proposals.

In a meeting with Sens. Bob Kerrey (D-Neb.), Harris Wofford (D-Pa.) and Thomas A. Daschle (D-S. D.), three of the most active Democrats on health care issues, Garamendi said Washington should decide on a basic package of health care benefits and then step aside and let the states decide how to deliver them.

Garamendi also said that, ultimately, states should control two key programs that account for about 40% of health spending: Medicare for citizens over 65 and Medicaid, the program for the poor, which in California is called Medi-Cal.

Without major health care reform, he said, “the economy will stall out, and all the new available money will go for health care.”

Wofford, who won an upset victory in a special election in Pennsylvania with health care as his most powerful issue, said the federal government should set a total figure for the nation’s health care spending and establish a package of benefits for doctor and hospital care. Beyond those basics, he said, “the states should be the laboratories.”

The three senators said their legislation will include the Garamendi proposal as a model state approach. It combines health insurance and workers’ compensation in a single program.

The California Senate is to vote on Garamendi’s plan soon, with Assembly action later in the year. Chances of passage are uncertain. His approach is strongly opposed by Gov. Pete Wilson, who favors changes in the current insurance system.

More than 6 million Californians have no health insurance now and millions more could lose their benefits if they become unemployed or seriously ill, Garamendi said.

His plan would replace the current system with a payroll tax, an average of 6.75% on employers and 1% on workers, to provide universal coverage for all legal residents of the state. A statewide health insurance purchasing corporation, with government and private members, would collect premiums, buy health insurance for all Californians and certify the health plans that could participate in the program. The state would set a ceiling for health care spending and would adjust fees paid to doctors and hospitals to stay within the annual budget.

Garamendi’s plan has a formidable array of opponents: the health insurance industry, which would be displaced; doctors and hospitals, whose revenues would be curtailed and strictly regulated, and businesses without health insurance, which would be forced to bear a new payroll tax.

Despite the political opposition, he insisted that his proposal will be welcomed by masses of voters fearful of losing health benefits. “The current system is collapsing; the lifeboat is going down,” he said.