GOP leaders offer governor a prescription for expanding health coverage

Although they flatly rejected Gov. Arnold Schwarzenegger’s healthcare proposal, Senate Republicans did the governor one favor. They showed him how to maneuver around a big stumbling block to any major expansion of medical coverage in California.

There are two big obstacles to GOP support for any major overhaul of medical coverage: Insuring illegal immigrants and raising taxes.

The governor wants to require everybody in California to carry health insurance, including illegal immigrants. People who couldn’t afford it would get state subsidies.

Republicans don’t want to provide state money to insure even illegal immigrant children.

“As soon as you open that door, you’re not just talking about people coming from Mexico,” says Senate GOP leader Dick Ackerman of Irvine. “If California had a plan like that, anyone who got sick anywhere in the world would come to California. We can’t be the hospital for the world.”

Schwarzenegger and Assembly Speaker Fabian Nunez (D-Los Angeles) make the practical argument that illegal immigrants, insured or not, already are entitled by federal law to costly care at overcrowded hospital emergency rooms. And everyone else -- taxpayers, policyholders, medical providers -- gets stuck with the bill.

There also are the self-protection and humane arguments: We should make sure California’s estimated 2.5 million illegal immigrants are healthy so they don’t spread germs. They’re here because we’re hiring them; morally we owe them healthcare.

The beauty of the Senate Republicans’ modest healthcare proposal is that it resolves the dilemma posed by each argument without breaking the GOP taboo against providing insurance for illegal immigrants.

Under the GOP plan, the uninsured -- here legally or not -- would be shifted to a greatly expanded network of medical clinics for nonemergency care. In emergencies, people still would be treated at emergency rooms. But the clinics would be more accessible and provide much less expensive basic care than the ERs.

“We disagree with the concept of providing health insurance policies to the undocumented,” Sen. George Runner (R-Lancaster) told reporters Tuesday at the GOP plan’s unveiling. “We do agree with the governor, though, that use of the emergency rooms is an extremely expensive way to deliver healthcare. And so that’s why we [want to] move populations into clinics ... the undocumented, underinsured, insured.”

Schwarzenegger seemed receptive to the idea Wednesday at a Capitol news conference. In fact, his universal healthcare plan includes a provision for expanding clinics.

“I understand where they’re coming from,” the governor said of his fellow Republicans’ opposition to insuring illegal immigrants. “My point is that there’s a cheaper way” to provide the federally mandated care, he continued. “No one can be turned away ... and everyone has to get treatment, whatever it may be.

“But we can send a lot of patients, maybe 90% ... to a clinic.... Let’s try to find a way to do it cheaper and not burden the taxpayers

The Schwarzenegger administration says that the cost of treating strep throat is $72 at a clinic, $91 in a doctor’s office and $328 in an emergency room.

The governor also says that an average California family pays an extra $1,186 in premiums to reimburse medical providers stiffed by the uninsured. And he maintains that businesses pay a similar “hidden tax” of “a staggering $14.7 billion a year.”

Proposed solutions are highly complex and mostly controversial -- even expansion of the clinics.

Republicans would finance the clinics by seizing $2 billion that goes to hospitals for treating underinsured patients. (The hospitals could recoup by operating the clinics.) They’d also take perhaps $300 million of the tobacco taxes now used for children-related programs. And they’d pare Medi-Cal for poor people when their coverage exceeded benefits of private plans.

Moreover, the clinics would be operated by nurses rather than doctors. Critics charge that would mean second-class treatment for patients.

But all this is negotiable between the governor and Legislature -- and a horde of medical, business, insurance and labor lobbyists now encamped around the Capitol.

What is not negotiable, Republicans say, is anything that smacks of a tax increase. Schwarzenegger proposes to sock doctors and hospitals, along with most businesses that don’t offer health insurance, with $4.5 billion in “fees” to help finance his plan.

“I don’t care if it’s a ‘tax’ or a ‘fee,’ we don’t support that method of funding,” Ackerman says, speaking for Senate Republicans.

Any tax hike requires a two-thirds vote of each house and thus some Republican support. Ruling Democrats could decree the tax to be a “fee” and pass it on a simple majority, party-line vote. But Republicans say Schwarzenegger has assured them he won’t accept a bill without GOP backing. And a gubernatorial advisor confirms it.

“The governor has made clear that he wants a bill with Republican and Democratic support. It must be bipartisan,” says communications director Adam Mendelsohn.

That’s a sharp shift from last year, when the governor and Democrats enacted major legislation -- global warming, minimum wage, prescription drugs -- over bitter GOP opposition.

Runner says that if Schwarzenegger tries that with healthcare legislation, “he’ll never have healthcare on his legacy.” That’s because without a broad, bipartisan coalition behind it, any plan is bound to face court challenges and perhaps a repeal effort at the ballot.

So Schwarzenegger needs GOP support. Credit Senate Republicans with showing him how to get it on the emotional issue of illegal immigrants: Treat their routine ailments, without insurance, in low-cost clinics. It’s not brain surgery.

George Skelton writes Monday and Thursday. Reach him at george.

skelton@latimes.com.