Schwarzenegger endorses healthcare law, says California will move ahead

California Gov. Arnold Schwarzenegger endorsed the health reform law on Thursday and vowed that his state would not fight it.

Instead, Schwarzenegger said California would move ahead with it “thoughtfully” and “responsibly.”

Schwarzenegger - who had been critical of a previous version of the Senate bill - is the first Republican governor to endorse the new law, and gives Democrats a welcome political boost from a powerful moderate as they seek to defend their signature accomplishment heading into the mid-term elections.

“The plan is not without flaws,” Schwarzenegger said in prepared remarks. “But it is the law.”

Health and Human Services Sec. Kathleen Sebelius praised the governor’s support in a statement released before the governor even made his announcement. Advance copies of the speech had been shared with some media outlets.

“As the governor of the largest state in the union, Governor Schwarzenegger supports the goals of the Affordable Care Act which will give Californians and other Americans more control over their own health care,” Sebelius said.

“As a former governor, I appreciate the governor's dedication to strengthening the health care system and the governor deserves credit for his proactive work to help improve public health and prevent disease and illness.”

The announcement comes two days after Schwarzenegger asked Sebelius in a letter to consider approving changes to Medicaid and other programs worth several billion dollars. The state faces a $20 billion shortfall over the next 14 months.

“The state’s current fiscal situation poses another fundamental challenge as we begin the effort to implement national health reform,” reads the April 27 letter, which is also signed by Senator Pro Tem Darrell Steinberg (D-Sacramento) and Assembly Speaker John Perez (D-Los Angeles).

“California must maintain and strengthen its core health care infrastructure for the successful implementation of federal health reform.”

The letter goes on to inform the secretary that California has requested that the Centers for Medicare and Medicaid Services approve:

•       A Medicaid waiver that would allow California to expand coverage to uninsured adults up to 200 percent of the federal poverty level. The state is asking for an extra $2 billion for each of the five years of the waiver.

•       A new fee on hospitals, which California authorized last year, that would leverage another $2 billion in new federal funds. The state’s 2010-2011 budget proposal assumes $560 million from the fee for children’s health care.

•       The state’s plan for drawing down $783.8 million in unexpended funding from an existing Medicaid waiver. The money has already been tentatively approved.

•       An adjustment to how much the state must pay the federal government for drug coverage provided to the low-income elderly who are eligible for both Medicare and Medicaid. The letter argues that California has negotiated steep drug rebates over the past few years, and that its residents are therefore costing less than assumed under the existing
formula. The adjustment would save the state about $75 million per year, and about $360 million if applied retroactively to the start of the drug benefit in 2006.