The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

Health Care Reform Initiative Passage Doubtful

Posted by Alan on December 5, 2007

As noted in an earlier post, Governor Arnold Schwarzenegger, frustrated with the failure to achieve meaningful health care reform through the Legislature, is considering putting the matter to voters on the November 2008 ballot. This may be more of a negotiating tactic than a commitment to a bruising campaign, but what if he’s serious? Could the Governor actually get an initiative passed?

I don’t think so.

First, history is against him. The San Jose Mercury News‘ Mike Zapler analyzed what happened to the 107 initiatives considered by California voters since 1998. Only nine passed when opponents spent at least $1 million and in five of those supporters outspent the opposition by at least 2 to 1. There will be far more than $1 million spent against a health care reform initiative and it’s doubtful supporters will be able to raise more than opponents. The other four successful ballot measures don’t offer much more hope. The Mercury News describes them as popular and “easy to digest.” While health care reform may be popular, it certainly isn’t simple to understand. This could explain why five health care reform initiatives have failed in the past 15 years.

Of course, Governor Schwarzenegger prefers to make history, not follow it. And he often succeeds. He’s got a track record of several successful initiative campaigns (although there is that 2005 disaster that almost derailed his political career). If anyone can buck a trend, it’s Governor Schwarzenegger.

To have any chance of success, the Governor and his team will need to carefully determine what provisions to include in their ballot measure. His current proposal reflects compromises he’s made to close the gap with Democratic negotiators. Some of them are not very popular with his traditional supporters. Keeping that language in the initiative might make it more palatable to more voters, but there will be pressure to revert to a more “pure” version of his original vision. Then there’s the many flaws in the Governor’s proposal (e.g., lack of meaningful enforcement of the individual mandate, lack of an affordability exemption, the structure of the purchasing pool) he will need to fix or risk providing opponents with easy avenues of attack. In short, there’s a lot of drafting work to do.

And this drafting has more than public policy implications. How the ballot measure is drafted will, to a great extent, define the initiative’s supporters and opponents — and the size of their war chests. The Governor certainly can’t count on Labor support. If the Administration was willing to accept a reform package palatable to the unions and their allies there would be no legislative deadlock. Fortunately for the Governor, the unions will be spreading their campaign resources over several other ballot measures and a host of candidates next November. What’s in the initiative — and what’s not — will influence the temperature of Labor’s opposition and how hard they strive to find the resources to defeat it.

The same holds true, in reverse, for the business community — what’s in the measure will determine the nature of their support. The state Chamber of Commerce has yet to come out in favor of the Governor’s current plan, although the Los Angeles and San Jose chapters have. Incorporating too much of the Democrat’s ideas could result in the state organization coming out in opposition to the proposal. The business community is not unified, however. The Governor can expect support from the Coalition to Advance Health Care Reform, which is comprised of over 35 large corporations and led by a Friend of Arnold, Steve Burd, chair of the Safeway grocery chain. But even they should be troubled by an item in the Governor’s plan that empowers an unelected state board to increase the payroll tax he proposes to levy on California businesses without limit or restraint. Such an open-ended tax provision will at best mute financial support from the business community. At worst it will turn them into opponents.

The Governor’s approach to funding reforms could generate substantial opposition to the initiative. If he turns to the cigarette tax as Democrats propose, the tobacco industry will pour millions into the campaign to defeat it. Leasing the lottery, as the Administration has proposed, might bring out opposition from the education community. Add them to pharmaceutical and insurance companies likely to oppose the initiative and the “No” campaign won’t have funding worries.

Another problem the Governor’s initiative will face is the timing of the election — November 2008. The budget process next summer will no doubt be bruising in the face of the $10 billion deficit California faces. If it’s half as ugly as the most recent budget fight, which centered around $700 million in cuts,  how likely are voters going to be to entrust Sacramento with a new $14 billion program?

The presidential campaign culminating at that time will no doubt involve a forceful debate on health care reform. The Administration believes this will help their cause. But it could also make passage of a California initiative less meaningful. After all, if voters believe the next president will enact national health care reform why go through the bother of implementing changes on the state level when they’re destined to be preempted?

Talk of initiative may be just a way to put pressure on the Legislature. That’s certainly a part of the Schwarzenegger playbook. But if the Governor is serious and goes through with the threat, it’s passage is far from certain. The Governor might be better served by finding a legislative solution in 2008.


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