(January 8, 2007) -- Governor Arnold Schwarzenegger has proposed that all Californians be required to carry health insurance under a system in which insurers would "guarantee coverage" with access to "affordable products" for all individuals.

Source: CA Governor's office

Unveiling the plan in a January 8 internet webcast -- to which LBReport.com provides on-demand video access below -- Governor Schwearzenegger's system would require all businesses with over ten employees to provide health insurance coverage or pay Sacramento an "in lieu" fee.

"My solution is that everyone in California must have insurance. If you can’t afford it, the state will help you buy it, but you must be insured." the Governor said. "Most employers offer coverage to their workers but if they employ at least ten workers and don’t provide insurance they will be required to pay four percent of payroll into a state fund so people without insurance can buy basic coverage." Small businesses (which the Governor's office said "make up 80% of CA businesses") would be exempt, the release said.

Source: CA Governor's office

The Governor also proposed to encourage "personal responsibility for health and wellness" by including a system of "incentives/rewards" for those who adopt "healthy behaviors."

During the webcast, the Governor explicitly said his plan would cover illegal immigrants. "There is no debate about whether to provide medical care for people who are in California illegally. I know this is controversial but federal law requires us to treat anyone who shows up at an emergency room in need of care. So the decision for my team was: Do we treat them in emergency rooms at the highest cost available or we do it right and do it efficiently?"

Very low income residents would get expanded access to programs such as Medi-Cal and lower income working residents "will be provided financial assistance to help with the cost of coverage through a new state-administered purchasing pool." Since hospitals and doctors would recieve $10-$15 billion in new money from increased Medi-Cal rates and elimination of uninsured, the Governor's plan would assess a "coverage dividend" of 2% on doctors and 4% on hospitals to "help cover the increased Medi-Cal rates."

The plan would require HMOs, insurers and hospitals "to spend 85% of every premium dollar on patient care," the Governor's release said.

In response, Assembly Speaker Fabian Núñez (D., Los Angeles) said in a webposted statement that he commended the Governor for "following the lead of Democrats with his health care proposal."

Speaker Núñez said he was pleased to see the Governor’s plan includes coverage for all children, including the children of undocumented immigrants.

The Speaker said, "I’m glad the governor is on board with coverage for ALL kids. That’s a key part of our plan.And more than 80% of Californians support that." He noted the similarities between the Assembly Democrat’s "Fair Share" proposal and the Governor’s "Shared Responsibility" proposal. (Both require employers to pay for some employee health care cost.) However, Speaker Nunez indicated that there are "differences between the proposals that he hopes will be worked out during the legislative process.

State Senator Jenny Oropeza (D., Carson) said in an emailed release, "Many of the governor’s health plan goals are worthy and laudable," especially putting an end to denials of health care coverage based on age, health status and assuring health services for the undocumented. "But there already are concerns about shifting the costs and risk from insurers to individuals. Any first step, however, must be to ensure basic, humane health coverage for all of California’s children. Cuts are unacceptable."

To view the Governor's webcast announcement followed by Q & A with his staff with an accompanying release, click here and then click "play video."