Mandated Health Insurance a Possibility in California

In California, the issue of health care has been at the forefront of the agenda of Governor Schwarzenegger. At the end of October the Assembly Health Committee began a series of hearings on the Governor's health care proposal. Yesterday, the state's democrats led by Speaker Fabian Nunez announced some compromises and revisions to the Governor's plan and a commitment to work with the Governor.The Houston Chronicle is reporting that democrats have agreed to one of the most controversial provisions of the plan - mandated health insurance.

Under both the Governor's plan and the democratic revised plan, Californians will be required to purchase health insurance. The concept being that by spreading the risk of illness among a larger risk pool, premium costs will be controlled.

The plans also agree on a $2 per pack cigarette tax and propose bulk purchasing of common drugs to lower pharmaceutical costs.

For California business owners, the most significant point of disagreement between the plans is how much California businesses will need to pay for health insurance. Under the Governor's plan, businesses that do not provide health insurance for their employees would be taxed at up to 4% of income. The democrats' original plan set that tax at 7.5%. Yesterday, Speaker Nunez suggested a compromise to a sliding rate tax of 2% to 6.5% depending on the size of the business. According to the San Jose Mercury, the Governor's Office had not issued a formal comment as of today, but indicated that the response was a "positive step.".

Schwarzenegger's plan has drawn criticism from republicans across the country and in his own state. Without republican support the plan must be adopted and placed on the November 2008 ballot for California voters to approve.