CALIFORNIA ELECTIONS / GOVERNOR : Garamendi Urges Health Care Overhaul

Democratic gubernatorial candidate John Garamendi on Tuesday proposed a top-to-bottom overhaul of California’s health care system as the keystone to a state economic revitalization program.

The conversion to a single program covering all Californians for all their health care needs would save $5.5 billion a year in insurance costs, said Garamendi, the state insurance commissioner, during an address to the Commonwealth Club.

Garamendi, who is facing Treasurer Kathleen Brown and state Sen. Tom Hayden (D-Santa Monica) for the Democratic nomination in the June 7 primary, said the savings could be used in a variety of ways--both public and private--to rebuild the foundation of the California economy and to stimulate the creation of jobs.

The economic program could include the development of a $200-billion transportation system over the next 20 years, construction of other public works such as highways and earthquake safety projects, and the creation of an educational technology industry, Garamendi said.

The funds could be used to help finance a high-speed bullet train between Los Angeles and San Francisco, he added, and to replace the aging rail system that transfers goods from the ports of Los Angeles and Long Beach to interstate rail lines near Downtown via the new Alameda Corridor, he said.

The key is reform of a system under which many Californians now pay for as many as eight health insurance policies and in which many others have no regular health insurance. He said health care absorbs 15% of the gross domestic product, up from 6% two decades ago, with billions of dollars “squandered” on administrative and legal costs.

“We must provide universal access to health care for every Californian,” said Garamendi, who was wearing a flexible cast and walking with the aid of crutches because of a broken right leg he suffered at his ranch Saturday night.

“Far too many California families live in the fear of losing everything if they lose their health care,” he added.

Tuesday’s address is one of four major speeches Garamendi said he will deliver this week, including education reform, revival of “the California spirit,” and rebuilding trust between people and their government.

Treasurer Brown also used the Commonwealth Club, an organization of corporate executives and professional people, as the forum for her own economic program. Delivered Jan. 26, it relied heavily on a series of proposed tax credits and other incentives for new business and creation of jobs.

Since last month, Brown has capsulized the program into a “mission” of creating 1 million jobs during a first term as governor.

The heart of Garamendi’s health reform is President Clinton’s health care proposal. But Garamendi’s California plan would go much further.

The average working Californian now receives health insurance under a plan such as Blue Cross/Blue Shield at work, workers’ compensation, auto insurance, homeowners liability insurance, business liability, Medi-Cal and Medicare, and others, Garamendi said.

He would remove the health components from all those plans and put them into a single program that would cover all Californians 24 hours a day for any illness or injury. Care would be provided by alliances such as the one that now works under the state Public Employees Retirement System.

Financing would come primarily from payroll withholding and employer contributions, he said, along with government funds now spent for health care for the poor and elderly. In most cases, payroll deductions would be no more than they they are now, he said.

Californians are likely to vote this fall on an initiative measure to create a “single-payer” health plan financed by the state. Garamendi has indicated that he opposes that initiative.