California Health Care Reform, as Seen from Progressive States Network

However, limiting premiums to no more than 5.5% of income is a robust standard. There is also a hardship waiver if individuals or families can show that compliance with the mandate would be an undue burden. Lastly, cost and quality reforms within the measure will help to ensure the availability of affordable health insurance.

Cost and Quality Measures: Under the measure, insurance companies would no longer be able to deny individuals coverage for pre-existing conditions, and community rating protections would be instituted, protecting consumers from excessive health insurance costs because of their age or health status. And, insurance companies would be required to spend at least 85% of every dollar paid in premiums on actual medical care, effectively reducing the amount they spend on administrative costs and profits.

To help stem the tide of ever-rising costs, the measure invests in electronic health records, institutes bulk purchasing of prescription drugs, emphasizes preventive care and chronic disease management, requires providers to disclose cost and quality metrics, creates a public insurer to compete with private insurance companies, and creates a statewide purchasing pool to secure large group insurance rates for businesses and their employees.

Employers and Financing: Because proponents lack the two-thirds vote requirement in the legislature to enact a tax increase, the measure's financing will go to the voters in 2008 if the Senate follows the Assembly's lead. This would be another huge hill to climb especially since monied-interests, such as the insurance, drug and tobacco industries, would line up against the measure.

Regardless, proponents are rightfully pursuing shared responsibility of employers and the health care industry to go along with the individual mandate. The measure would require employers to spend, on a sliding scale, up to 6.5% of payroll on health care or pay the equivalent to the state to help finance coverage expansions. Elsewhere, a 4% tax on providers, which the hospitals have agreed to, would draw-down much-needed federal funds and lead to increased Medicaid provider rates. And, a $1.50 to $2.00 increase in the cigarette tax has been proposed.

An Uncertain Future: California faces a $14 billion budget shortfall, which has led Senate President Perata to question moving forward with a major health care reform measure now. He has asked for a state report to show the health care measure's impact on the state budget and will not bring the reforms up for a vote until the new year.

There is much more to do and more details to flesh out, but California continues to move forward and to offer models for state health care reform. While the affordability protections should be strengthened and the individual mandate remains a concern, the public expansion, employer participation, insurance regulations and cost containment provisions will help to spread access to affordable coverage for Californians.

Adam Thompson is a policy specialist at Progressive States. He has worked for major health care reform at the state level and on political campaigns. Before joining Progressive States, he worked on Maine Governor John Baldacci's Office of Health Policy and Finance on the enactment and implementation of Dirigo Health Reform. He previously served as the Executive Director of the Maine Democratic Party. This article first appeared on the Daily Dipatch of Progressive States and is republished with their permission.