California Assembly Passes Health Insurance Bill on to the Senate

With a vote of 45 to 31, the California State Assembly passed on to the California Senate the health care reform initiative of Speaker Nunez and Governor Schwarzenegger.

The legislation, AB 1 X1 (Nunez), is still a long way from becoming law. The California Senate must pass it and certain provisions must be passed at a general election in November 2008. The legislation faces opposition from tobacco companies and insurers and some business interests.

The bill, as passed by the Assembly, and reported in the Third Reading of the bill, requires:

commencing July 1, 2010, requires every California resident to enroll in and maintain minimum health care coverage (individual mandate), as determined by MRMIB, for himself or herself and his or her dependents. ...
States legislative intent to finance the Act with contributions from employers, individuals, federal, state and local governments and health care providers.

The bill requires "credible coverage" - much like the Massachusetts Health Care Law. The bill includes a provision mandating that health insurers spend $0.85 of every $1.00 on health benefits - a provision that insurers say is impossible. It taxes cigarettes at $2.00 per pack.

Finally, for businesses:

Requires all employers with one or more full-time equivalent employees to establish Section 125 accounts to allow employees to pay premiums for health coverage with pre-tax dollars. ... A requirement for employers to pay a health care fee equal to 1% to 6.5% of annual Social Security wages in the prior calendar year depending on size of firm payroll. This spending requirement will be reduced to the extent employers make health expenditures for employees and their dependents during the same time period.

The financing provisions of the bill will be on the November 2008 ballot in California. If passed, mandatory universal coverage will be law in California.