AP Interview: Schwarzenegger to try health care fix again

Gov. Arnold Schwarzenegger responds to a question during an interview with the Associated Press, in his Capitol office in Sacramento, Calif., Tuesday, April 29, 2008. (AP Photo/Rich Pedroncelli)

SACRAMENTO, Calif.—Three months after his effort to retool the state's health care system ran aground, Gov. Arnold Schwarzenegger told The Associated Press he'll try again.

Schwarzenegger said he has an obligation to try to make health care available to Californians who lack coverage -- an estimated 5.1 million people at any given time.

He said in an interview Tuesday that his staff is working with health care advocates to fix the previous plan, even as the state faces a multibillion-dollar budget deficit.

"Now we'll try again," Schwarzenegger said. "We will continue on, keeping the stakeholders together, fine-tuning it and seeing if we can improve on it since we have the time now, then be back again. We feel very confident."

He said he is not willing to break apart the plan, as some have suggested, to tackle only children's health care or address problems with Medi-Cal, the state insurance plan for the poor.

Schwarzenegger spent months negotiating a $14.7 billion health care package with Democratic leaders last year, only to watch it fail in a state Senate committee in late January after an analysis raised concerns about its financing.

If the Senate and voters had approved, it would have been the largest health care overhaul undertaken by any state. Massachusetts passed a similar mandate in 2006 but has far fewer uninsured residents.

A Field Poll out this week found that nearly three-quarters of Californians supported the basic principles of his health plan, a result Schwarzenegger said should give new momentum to the proposal.

The compromise Schwarzenegger struck previously with legislative Democrats, led by Assembly Speaker Fabian Nunez, would have covered about 70 percent of the state's uninsured residents through a combination of subsidies and mandates.

It would have required most Californians to have an insurance policy and every employer to contribute toward their workers' health care.

A report by the nonpartisan Legislative Analyst's Office raised concerns about the plan's cost. It said the state could be on the hook for an additional $500 million to $1.5 billion annually within five years.

On Monday, Schwarzenegger said the state's budget deficit through June 2009 is projected to be between $15 billion and $20 billion. In the Tuesday interview, the governor said revenue and spending projections are fluctuating daily, making it hard to pin down the size of the gap before he releases his revised budget proposal for the 2008-09 fiscal year on May 14.

The deficit already has forced cuts to the state's health care program for the poor and elderly. At Schwarzenegger's urging, state lawmakers in February approved a $600 million reduction in Medi-Cal payments to doctors.

Schwarzenegger has insisted that financing for the health care plan would be separate from the state general fund and would not worsen the budget deficit.

Nunez, who is termed out of office this year and will give up the speaker's post next month, also cited the Field Poll as proof that Californians are eager for a health care fix.

"Hopefully, the patient advocates, labor unions and responsible businesses who backed our plan can leverage this public support and help keep the pressure on for realistic reform that will make health care more affordable for millions of Californians," he said.