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Schwarzenegger Proposes Universal Health Care in California

California Gov. Arnold Schwarzenegger has proposed a universal health care program that would extend coverage to the state's uninsured population. A California health official and NewsHour correspondent Susan Dentzer discuss the implications of the proposed plan.

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  • GWEN IFILL:

    The Census Bureau estimates that almost 47 million people in the country lack health insurance. Yesterday, the governor of the nation's most populous state proposed a plan to single-handedly cut that number by 14 percent.

    Arnold Schwarzenegger's $12 billion plan would require every Californian to have health insurance, including illegal immigrants.

    Joining us to discuss how that plan might work and its implications for the rest of the nation is California's health and human services secretary, Kim Belshe, and Susan Dentzer, the NewsHour's health correspondent.

    Ms. Belshe, the Los Angeles Times today wrote, in covering this, the governor's announcement, that this was the most audacious plan of its kind in the country. Give us the nuts and bolts. What's so audacious about this?

    KIM BELSHE, California Health and Human Services Secretary: Well, it is big, it's bold. To use the L.A. Times' word, it is audacious. It's reflective of Governor Schwarzenegger's commitment to tackle the tough issues, to not shy away from them.

    For far too long, the problem of the uninsured, rising health care costs, has resulted in chief executives retreating rather than leading. Yesterday, Governor Schwarzenegger led with a very comprehensive, far-reaching proposal that will fix California's broken health care system by focusing on prevention and wellness, coverage for all, and affordability.

    And in so doing, the governor's approach will eliminate the hidden tax associated with the shifting of uncompensated costs or unpaid bills from the uninsured to the insured. It will make coverage more affordable. It will cover all Californians, and it will promote a healthier California, which is a very important goal.

  • GWEN IFILL:

    You say it eliminates the hidden tax, but does it replace it with new taxes on insurers, on hospitals, even on individuals?

  • KIM BELSHE:

    You know, the governor's plan is not about raising taxes. The governor's plan is about eliminating this hidden tax associated with unpaid medical bills from the uninsured that are shifted to paying individuals.

    Researchers estimate that it contributes 10 percent of all premiums. So for an average family policy, they're spending $1,200 each year because of this hidden tax.

    Governor Schwarzenegger's approach to fixing California's health care problems is premised upon everyone playing a part, everyone sharing the responsibility. Taken together, the approach he's put forward is a budget-neutral approach, and it's an approach that will result in overall taxes going down rather than going up.

  • GWEN IFILL:

    Do employers, however — they're required to participate in this. Doesn't that make it a mandate and something that the governor has tried to avoid in the past?

  • KIM BELSHE:

    Governor Schwarzenegger has not proposed an employer mandate. He is not dictating to employers what they should or are required to provide in terms of benefits.

    You know, in California — and I think in other states, as well — far too many proposals put forward have looked to employers to exclusively bear the burden of health reform. Governor Schwarzenegger's approach is a different approach.

    It's an approach built upon shared responsibility, beginning with the individual, but also government, in terms of helping coverage become more affordable, health care providers, in terms of providing lower-cost services due to the elimination of this cost shift, health plans, making benefit plans available to all individuals so that they can access affordable coverage.

    And employers have a responsibility, as well. Most Californian employers are already offering health coverage. And for them, nothing is going to change, other than health care should become more affordable under the governor's plan.

    But for those employers who do not offer coverage, the governor's plan does ask them to contribute a fee to help subsidize the cost for uninsured individuals.

    But it's structured in a way to exempt our smallest employers. It's structured in a way to promote affordability for employers overall. And there are some very significant tax benefits for employers that far exceed the fee that would be required of non-offering employers.