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California's health care reform may be the first victim of the economic downturn.
Governor Arnold Schwarzenegger's ambitious $14.9 billion plan to reform the state's health insurance system has crashed, in part because it was unclear proposed funding sources would raise enough revenue to ensure the program's viability in the face of a deteriorating budget environment. The state is facing a $14.5 billion deficit.
After two days of debate, health care advocates and state senators raised questions about how much the program would cost, how many people would be covered and who would pay for it. The proposal agreed upon by the governor and Democratic legislative leaders was always a hard sell. Any tax increases needed to fund it would have required voter approval, a long-shot in the best of times and nearly impossible in a slowing economy. California has been hit especially hard by the mortgage crisis.
The collapse of the California plan could spill over onto the national debate over health reform. While California's idiosyncracies (supermajority vote requirements, large share uninsured, large budget deficit) may be different than the rest of the country, the disintegration of broad support once details were revealed illustrates how complicated reform can be.
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