Peter Harbage and Hilary Haycock on California Healthcare Reform: How State Politics and Ideology Derailed California Healthcare Reform

This extensive commentary explains the substance and history of California ’s ambitious but now stalled attempts at comprehensive health reform legislation. The legislation started with great promise but ended in ideological and political stalemate in the State Senate. Although California faced significant barriers to reform, including a high number of uninsured, the ultimate health reform plan from Governor Arnold Schwarzenegger and Assembly Speaker Fabian Nunez was bold and comprehensive. The compromise plan was based on “shared responsibility:” the idea that individuals, employers, the government, insurers, and providers all have to put more resources into the system to achieve universal coverage. In addition to individual and employer mandates, as well as government subsidies to make coverage affordable, the plan called for expansions in California ’s Medicaid program and the State Children’s Health Insurance Program. The plan further contained aggressive steps for cost-containment, wellness, and prevention. This commentary fully sets forth the details of the plan.

This commentary co-authored by Peter Harbage and Hilary Haycock of Harbage Consulting shows how the ambitious plan failed to be enacted and as such offers lessons for future health reform efforts. (Mr. Harbage has served as the senior health policy advisor to presidential candidate and former Senator John Edwards, as well as advised Governor Arnold Schwarzenegger’s health reform team. During his career, he also served as the Assistant Secretary for Health at the California Health and Human Services Agency and as Special Assistant to the Administrator of the federal Health Care Financing Administration.) Some of the reasons California reform broke-down can be attributed to the state’s unique legislative process, which created gridlock on health reform. Due in part to policy disagreements and political complexity, reform lacked a clear legislative roadmap, as the Governor and the Republicans and Democrats in both legislative houses articulated their own health plans. Acceptance of the compromise plan needed time to mature. California’s two-thirds rule to raise revenues and approve the state budge ultimately gave Republicans, who were strongly opposed to raising revenue, the power to delay the debate and then force the plan’s funding mechanism to the ballot. This created challenges for the legislative calendar which, with legislative rivalries that had kept the State Senate out of much of the action, left the Senate Health Committee ill-prepared to take the bold step of voting to approve the final reform bill.

This commentary features an appendix that analyzes every section of the January 16, 2008 version of the Health Care Security and Cost Reduction Act. As you walk through the proposed legislation, you see the enormous sweep of what it attempted to do and how it intended to achieve affordable and meaningful healthcare for the population

The legislation thus sets forth a blueprint upon which future attempts at comprehensive healthcare reform can be built in California or elsewhere. 

The authors point out that the healthcare reform effort in California offers important lessons for the national debate on this hot issue. “The first lesson is to find the policy compromises that are necessary to achieve the second lesson, which is to build broad coalitions of support. The third lesson from California is the tragic power of extreme ideologues on the Right and Left to block compromise reform in their effort to pursue their own perceived ‘perfect’ solution.” 

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