A blog about Policy

Gov. Arnold Schwarzenegger on Monday proposed extending health care coverage to all of California’ss 36 million residents as part of a sweeping package of changes to the state’s huge, troubled health care system. The plan, which Mr. Schwarzenegger estimated would cost $12 billion, calls for many employers that do not offer health insurance to contribute to a fund that would help pay for coverage of the working uninsured. It would also require doctors to pay 2 percent and hospitals 4 percent of their revenues to help cover higher reimbursements for those who treat patients enrolled in Medi-Cal, the state’s Medicaid program.[link]

The number of the uninsured in United States (currently 44 million) is fast approaching a critical mass where a public policy intervention would make political sense. Massachusetts was first off the block but of course , California is unique. It’s much larger than and also has a very high proportion of undocumented workers. It remains to be seen how many taxpayers are willing to pay for them.

The proposal makes a lot of sense to Schwarzenegger personally. California  usually votes blue in Federal elections and he is looking for a possible Senate run in 2008. If he can carry it off, it can yield some excellent electoral benefits. The proposal would meet some strong resistance primarily from Republicans and their core constituency -small business. California has already amongst the highest minimum wages in the country and the effect this will have on the general business envoironment remains to be seen.

Finally, there is little doubt that movement towards universal health care is going to pick up steam. Apart from the 2006 elections, the cost of Medicaid, the program which takes care of the poor is going through the roof. In some larger states, it is estimated that without reforms, it will reach almost 50% of the state budget. Completely unsustainable. Interestingly enough, couple of states, noticeably Maryland and Florida are practically privatizing their Medicaid in order to cut costs.