Governor heeds health study

When Gov. Arnold Schwarzenegger wanted to build public support for his eagerly awaited health care overhaul, he turned to a study by the New America Foundation.

The report, released recently by the nonpartisan Public Policy Institute, concluded that the average family in California pays a $1,200 "hidden tax" to subsidize health care for the uninsured.

Never mind that Families USA, a liberal advocacy group, released a similar study in 2005. The Schwarzenegger administration has cultivated a close relationship with the New America Foundation, whose centrist philosophy is more in tune with the governor.

Administration officials heard New America was working on the study and asked, " 'Hey, can we use this thing?' " recalled Len Nichols, director of the foundation's health policy program.

"I said, 'Well, sure,' " said Nichols, an economist, adding that New America also has been approached for advice by five presidential aspirants as rising health care costs become a top domestic issue.

As the governor prepares to unveil his health care plan in his Jan. 9 State of the State speech, New America's proposals on how to increase access for the nearly 7 million Californians without insurance may shed some light on the biggest guessing game in the Capitol.

Schwarzenegger has rejected a single-payer health care system that would diminish the role of the private sector and adamantly opposes new taxes.

Nichols said that leaves the governor with only two choices -- "shared responsibility or a lick and a promise" -- if he intends, as he has said, to provide universal access.

And like New America, the governor believes individuals, government, employers, medical providers and insurers must all be involved, said Kim Belshé, Schwarzenegger's secretary for health and human services.

The big question is whether Schwarzenegger will require workers and their employers to contribute to insurance premiums -- and how those costs would be divided among the various parties.

"The individual mandate is the kind of thing you've got to have," Nichols said. "The optional piece is the employer requirement. But in the real world -- and especially in California -- you're probably going to have one."

Belshé said "finishing touches are being put on the governor's plan," but she declined to say whether it would place requirements on individuals or employers.

She noted, however, that "history has shown us that some degree of mandate is often necessary to get everyone to do something in society, whether it be school attendance, tax payments, people using child safety seats, seat belts, et cetera."

Any mandates would likely set off a battle in the Capitol.

California Chamber of Commerce President Allan Zaremberg said the organization remains opposed to employer mandates, which he said would be open-ended as long as health costs continue to rise.

"If you don't have a stable cost structure, then you're mandating something no one can afford," Zaremberg said.

Anthony Wright, executive director of Health Access, which advocates for health consumers, said individual mandates would hurt the working poor.

"People should not be penalized for being uninsured on top of the health and financial consequences they're already facing," Wright said.

New America maintains such clashes between the right and left have led to public policy paralysis.

Founded in 1999 by policy wonk Ted Halstead, the foundation has nurtured a new generation of public intellectuals who believe old ideologies are outdated.

Halstead laid out his philosophy in the 2001 book "Radical Center: The Future of American Politics," written with Michael Lind.

New America's donors include some of the titans in the field, including the David and Lucile Packard Foundation, Pew Charitable Trusts and John D. and Catherine T. MacArthur Foundation.

With headquarters in Washington, D.C., New America also has a significant presence in California, which it calls the nation's largest laboratory of democracy.

About the writer:

• The Bee's Aurelio Rojas can be reached at (916) 326-5545 or arojas@sacbee.com.