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Senate committee kills Schwarzenegger health care plan

SACRAMENTO - Gov. Arnold Schwarzenegger suffered his biggest legislative defeat Monday when a Senate committee blocked his yearlong effort to provide health care coverage to most Californians without insurance.

The $14.9 billion annual plan, hailed as the most sweeping effort by any state to provide near-universal health care, was negotiated by the Republican governor and Democratic Speaker Fabian Núñez but died in the Senate Health Committee.

Only one of the seven Democrats on the panel voted for AB 1X1 -- authored by Núñez, D-Los Angeles, and Senate President Pro Tem Don Perata, D-Oakland -- while all four Republicans voted against bill.

Opponents, citing a report released last week by the Legislative Analyst's Office that concluded the plan might be underfunded by billions of dollars, said they were concerned about adding to the state's projected $14.5 billion deficit.

"It doesn't matter how many good things are in the bill if there isn't money to pay for them," said Sen. Sheila Kuehl, D-Santa Monica and chairwoman of the committee.

Democrats said they also believed a provision requiring most workers to contribute to the cost of their health coverage would be unaffordable for some families and not ensure adequate coverage.

Republicans warned that another provision requiring most employers to contribute to their workers' coverage would force many small business out of coverage.

Schwarzenegger and Núñez maintained the plan would raise enough revenues to pay for itself through the employer and employee contributions, a fee on hospitals, an additional $1.75 tax on a pack of cigarettes and leveraging the money to increase matching federal funds.