CALIFORNIA ELECTIONS : Prop. 166 Deemed Bad Medicine for Insurance Reform

In the heady aftermath of unexpected victory, opponents of Proposition 166--the California Medical Assn.’s proposal requiring employers to provide health insurance--on Wednesday claimed the initiative’s defeat is evidence that voters don’t want expensive, piecemeal approaches to the problems of people lacking health insurance.

The measure was the nation’s first health reform plan to be put before voters. Some observers worried that its defeat could dampen political momentum for reform locally and nationally, even though numerous polls have shown Americans are unhappy with the current health care system.

But reform experts inside and outside California said Tuesday that Proposition 166’s flaws were to blame.

“This was more a vote on the economy than it was on health reform,” said Drew Altman, president of the Menlo Park-based Kaiser Family Foundation, which has sponsored extensive research on public attitudes toward health reform and insurance. “People heard that jobs would be lost, and that was it for 166.”

Voters rejected the proposition 68% to 32%.

But observers said the decisive victory of President-elect Bill Clinton, with his campaign’s emphasis on improving health care access, offsets any suggestion that the public does not support health care reform.

“I doubt that (the vote’s impact) is going to be that significant among other states,” said Dick Merritt, director of the Intergovernmental Health Policy Project at George Washington University. “Most states don’t try to legislate significant reform like this through the ballot process.”

Indeed, much of the opposition to Proposition 166 crystallized after the California Medical Assn. broke away from broad-based efforts to push health care reform through the state Legislature in order to put 166 before the public.

The medical association was left largely on its own to sell the plan, while powerful interest groups normally at odds on issues--such as employers and labor, health consumer activists and insurers--joined to defeat it.

“It was an incredible collection of strange bedfellows,” exulted Joy Howell, spokeswoman of the Consumer Health Insurance Coalition, which raised $6 million from insurance companies to fight Proposition 166. “We may never agree on anything again!”

The medical association’s proposal theoretically would have extended coverage to 4.7 million of the 6 million Californians who currently lack health insurance. But it was widely criticized for inadequate cost and quality controls, and for placing too great a financial burden on small businesses struggling to survive the recession.

Lois Salisbury, chairwoman of Health Access, another anti-166 coalition representing more than 190 consumer, church and community groups, said the lopsided vote also suggested public mistrust of the medical association’s motives.

In the final weeks of the campaign, Salisbury and other opponents hammered a theme portraying the physicians’ group as trying to expand its members’ source of income--fees from insured patients--without regard for the measure’s cost to employers and employees.

“The voters smelled that and distrusted it and they rejected it,” Salisbury said.

The CMA disagreed, saying Tuesday that a radio and TV blitz, heavily financed by the insurance industry, turned voters’ heads.

“What it tells us is that $7-million worth of advertising gets you what you want from the voters,” CMA spokeswoman Danielle Walters said.

The Kaiser foundation conducted exit polls on voters’ reasons for supporting or rejecting the measure, but data will not be available until Friday, Altman said.