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.”

{mosads}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.