Senate GOP leaders offer a health plan

Spurning Gov. Arnold Schwarzenegger’s proposal to guarantee health insurance for all Californians, Republican leaders in the state Senate offered a far more modest alternative Tuesday, intended to increase clinics for the poor and encourage the purchase of high-deductible policies covering catastrophes.

The plan aspires to make medical care and insurance easier to obtain for about 1 million of the state’s 6.5 million residents who do not have insurance. But unlike the proposals from Schwarzenegger and the Democrats who control the Legislature, it would not require employers to provide coverage. Neither would it require that everyone in the state obtain insurance, as Schwarzenegger wants.

“We frankly don’t believe the state of California has the ability or could afford universal health insurance,” said state Sen. Dave Cox (R-Fair Oaks). “What we do believe is we can satisfy the health requirements and the needs by changing some of the delivery methods.”

The proposal was a setback for Schwarzenegger, who has been aggressively courting fellow Republicans in hopes that they might compromise and agree on a dramatic refashioning of California healthcare that would provide medical coverage for all.

But the senators’ move was not unexpected. Republicans have been vocal about their resistance to the governor’s proposal.

And both the administration and the Democrats have honed their plans so that they could be passed with a simple majority of the Legislature, rather than the two-thirds vote required of any proposal with tax increases. Because a supermajority cannot be reached without Republican votes, any measures that require two-thirds support give the GOP effective veto power.

The proposal would expand tax credits to encourage employers to offer insurance plans for their workers and to promote the use of health savings accounts that allow people to set aside some of their earnings to pay for medical care without paying taxes on that income. Created by the Bush administration in 2003 and now a cause celebre in GOP circles, such accounts are for people who buy insurance plans that pay only for catastrophic illnesses.

The GOP plan would also:

* Redirect for the creation of healthcare clinics $2 billion that now goes to hospitals and $600 million in tobacco taxes now used to encourage preschool education, healthcare and development through the California Children and Families First Act.

* Allow nurses, instead of doctors, to run clinics -- an idea strongly opposed by the physicians’ lobby.

* Improve Medi-Cal rates over the next eight years for doctors who care for the poor, while reducing Medi-Cal benefits to ensure that no one on public assistance gets more than people in private plans.

* Allow emergency rooms to send patients who do not need urgent care to clinics, which Republicans said provide care at a third or less of what hospitals cost.

In a significant departure from the other plans, the GOP proposal would exclude coverage for 2.5 million illegal immigrants or nonresidents whose heavy use of emergency rooms is often cited as a factor in the high cost of healthcare.

Schwarzenegger has argued that immigrants must be covered because otherwise they will continue to receive medical care at emergency rooms, which is guaranteed by federal law. The GOP plan proposes asking the federal government to pay for that care, though that is considered highly unlikely.

Republicans in the Assembly have not offered a healthcare plan, although on Tuesday they announced, after Democratic goading, that they “will soon propose our own common-sense reforms.”

Meanwhile, the Senate GOP leaders said not everyone in their 15-member caucus agreed to all elements of the plan. But by offering their array of proposals, they hope to get some of them included in the final package. Both Schwarzenegger and Democratic leaders have said they want a plan that has bipartisan support.

One objection voiced by many healthcare experts is that the GOP plan would accelerate the trend of employers dropping coverage and of people getting plans that require large out-of-pocket deductibles, $5,000 or higher, before any benefits are paid.

“The proposal would increase underinsurance, encouraging high deductibles and scaled-back benefits. It would take money from the safety-net hospitals on which we all rely,” said Anthony Wright, executive director of Health Access California, a nonprofit group.

“With more legislators at the table, we are still optimistic about the debate and the outcome,” Wright said. “We are glad that the other health proposals recognize the need for better standards for coverage and more, not less, oversight over insurers.”

Peter Harbage, a healthcare expert with the New America Foundation, a think tank that Schwarzenegger relied upon for parts of his plan, said he was surprised that the Republicans dismissed the notion of aiming for universal coverage.

“There seems to be so much momentum,” Harbage said. “There’s a role for tax breaks, but just saying to people, ‘Here, go off and buy insurance,’ that’s not going to help anybody.”

*

jordan.rau@latimes.com

*

(BEGIN TEXT OF INFOBOX)

Provisions

Here are key elements of the plan that Republican state Senate leaders offered Tuesday as an alternative to proposals from Gov. Arnold Schwarzenegger and Democratic lawmakers:

* Expand healthcare clinics and encourage their use instead of emergency rooms for routine care.

* Permit Californians to create health savings accounts, which would allow them to avoid taxes on income put aside for medical care. Such accounts are allowed only for those who purchase high-deductible insurance plans that pay solely for catastrophic care.

* Trim Medi-Cal, which pays for medical care for the poor, so it does not offer benefits better than those available from private insurers.

* Give health maintenance organizations more leeway in setting their rates.

* Redirect for children’s healthcare all tobacco tax money now spent on preschool and other developmental efforts through the California Children and Families First Act.