July 2, 2007
Potential for Health Care Reform

The potential for major health care reform moved forward earlier in June when Senate President Pro Tem Don Perata and Assembley Speaker Fabian Nunez merged their competing proposals into Assembly Bill 8 (Nunez). That bill will be heard in the senate Health Committee on July 11, acording to the current schedule. Governor Schwarzenegger has his own proposal, which has yet to be reduced to legislation. There are major differences between the two proposals. Both sides, however, state that progress is being made. While the proposals are different, one thing that they have in common is a fee charged to employers who elect not to provide health care coverage for their employees. In the Governor's proposal, that fee is 4% of payroll for employers with more than 50 employees. The Democratic alternative would be 7.5% of payroll regardless of size.

The environment in Sacramento seems ripe for health care reform. Many obstacles remain, including who is covered and who is responsible for funding this new system. According to Legislative Counsel, the so-called "fee" on payroll is actually a tax. If correct, that would require a two-thirds's vote from the Legislature adding new strength to Assembly and Senate Republicans and their efforts to shape the final product. This is the primary item on the Legislature's agenda for 2007, and by late August, we should know whether, and what, will be delivered to the Governor for his signature. Stay tuned.