Yesterday, Gov. Schwarzenegger made another attempt to move his health reform proposal down the field.  Despite having no sponsor in the legislature, the governor released legislative language.  This is the first major step since his 10-page outline released January.

Is this a sign of confidence or desperation?  I suspect the latter.  If he was really ready to move his proposal through the legislature, he would have announced a bill in cahoots with the Democratic leadership.  (Republican legislators understand that increasing taxes is not health reform, so they have never even gotten close to jumping on the bandwagon.)  The Democratic leadership was conspicuous yesterday by its absence - a setback for the governor, who has been "negotiating" with them for months.

Not everything in the proposal is bad: he wants Californians to be able to deduct HSA contributions and earnings from state taxable income, free retail "convenient clinics" to compete, and reduce the extremely expensive seismic retrofitting mandate on hospitals.

Unfortunately, some of the bad things in the original proposal appear to have gotten worse.

• Community rating and guaranteed issue provisions that will drastically increase health insurance premiums are more precisely defined now.
• Firms with 10 employees or less were previously exempt his 4% payroll tax: now, they'll suffer the tax on a sliding scale below 4%.
• Doctors were to suffer a 2% tax on revenues (designed to leverage more federal Medicaid dollars): that's now disappeared in favor of revenues from contracting out management of the state lottery.
• The originally proposed mandatory health insurance was a (quasi) consumer-directed plan, with a $5,000 deductible: now, government bureaucrats will determine the "shape" of the policy.

Also, the new bill confirms that hospitals will continue to be dependant on government, by guaranteeing them DSH (disproportionate share hospital) payments and other cash flows.  Thus, the appropriate goal of moving subsidies from the supply side to the demand side is defeated.  Why did he have to write this in? Undoubtedly because the hospitals demanded it to concede to his 4% revenue tax on them.

The fact that the doctors refused to cave in to their 2% revenue tax has forced him to propose taxing the smallest of small businesses and privatizing the lottery.

I'll have more analysis as I digest this bill, but until then, remember: A lottery is no way to gamble our health care future.