CALIFORNIA ELECTIONS / PROPOSITION 186 : Defeat May Prove Fatal for Large-Scale Health Reforms

The massive voter rejection of Proposition 186, the initiative to impose a Canadian-style health care system on California, left the future of health care reform in California cloudy.

Sponsors of the initiative, already in the process of regrouping Wednesday, say they will continue to fight for a so-called single-payer system in California that would guarantee health insurance coverage to all legal residents of the state.

But opponents say they believe the measure’s crushing defeat, coming just months after President Clinton’s national health reform plan stalled in Congress, may spell the end of large-scale proposals to overhaul the health system.

Proposition 186 got the support of only 26.6% of those who cast ballots on the measure, according to final unofficial results. That means it went down even more decisively than the last effort at sweeping health reform in California--Proposition 166, a California Medical Assn.-backed plan that lost by a 2-1 margin two years ago.

The defeat of Proposition 186 left supporters reeling even as it had opponents hoping the lopsided defeat would discourage future efforts at imposing a similar kind of plan based on taxes and employer mandates.

“We think (the vote) is sending a resounding message that people don’t want government running their health care system,” said Susan Neely, a senior vice president of the Health Insurance Assn. of America, which poured $1.5 million into the effort to defeat Proposition 186.

Health industry activists on both sides of the issue believe that although Proposition 186 may be dead, health reform is not because of underlying health care problems that led to the initiative.

Among the problems that have so far defied a political solution are finding a way to provide coverage to the estimated 6 million medically uninsured people in California and figuring out how to provide coverage to those who have health insurance but will lose it if they lose their job, get divorced or found themselves outside the system because they are suffering from a serious illness.

In post-election comments, most predictions were that global-type plans requiring strong government intervention, such as the Clinton plan and Proposition 186, will give way to more incremental proposals tackling smaller pieces of the problem. The battlefield will be Congress or the state Legislature.

“When you look at the cumulative effects of Tuesday’s election, voters are saying no to new taxes and no to big government,” said Matt James of the Palo Alto-based Kaiser Family Foundation, one of the nation’s largest nonprofit foundations that tracks health care reform. “It will be very difficult for something like Proposition 186 to succeed in the present political climate.”

Mary Kay Henry, director of the health care division of the Service Employees International Union, which contributed $200,000 toward the initiative’s passage, said the union will not back away from health reform because it believes the nation’s health care problems will only get worse.

“Proposition 186 was just one battle,” Henry said. “Now we are trying to figure out how to win the war, which may mean a whole series of battles in the future.”

“I don’t believe this was a referendum on health care reform,” said Duane Dauner, president of the California Assn. of Hospitals and Health Systems and co-chairman of the opposition campaign, called Taxpayers Against the Government Takeover. “The underlying problems we have to deal with still remain.”

Times staff writer David Olmos contributed to this story.