Associated Press

SACRAMENTO, CA — The Assembly narrowly approved a bill Monday that would provide health insurance to all residents, a move that would make California the only state to offer government-operated universal health care.

The bill, which passed the 80-member house on a largely party-line vote of 43-30, received strong Democratic backing. But supporters say pressure from the insurance industry and Republican lawmakers is likely to doom the measure when it reaches Gov. Arnold Schwarzenegger.

The governor’s office has declined to take a position on the bill, but Schwarzenegger in the past has voiced his opposition to single-payer systems.

The bill by Sen. Sheila Kuehl, D-Santa Monica, must be approved by the state Senate before it heads to the governor’s desk. It would provide every California resident with health insurance through a system controlled by a newly created entity called the California Health Insurance Agency.

The agency would be under the control of a health insurance commissioner appointed by the governor.

In April, Massachusetts passed a law requiring all residents to buy health insurance or face legal penalties, essentially treating health care the same way it does auto insurance.

“The health care system today is teetering on collapse,” said Assembly Speaker Fabian Nunez, D-Los Angeles. “Providing universal health care, he said, “would help California take leadership at a national level.”

Assembly Republicans voiced strong concerns over the bill, calling it “socialized medicine” and “doomed to failure.” They compared the proposed state insurance agency to “bloated bureaucracies” such as the Department of Motor Vehicles and the Internal Revenue Service.

Many Republicans said they supported the idea of universal health care but said a single-payer system is not the way to accomplish it.

“This government-run health care scheme will jeopardize the quality care that Californians have come to expect and drive businesses out of our state,” said Assemblyman Greg Aghazarian, R-Stockton.

“The reason health care is messed up is the government,” argued Assemblyman Ray Haynes, R-Murrieta. “So why would we want to create even more government?”

The bill’s proponents took issue with the Republicans’ claim that it is synonymous with “big government.”

“What (the bill) is not is ‘government-run health care,'” Kuehl said during a news conference before Monday’s vote. “All providers remain as they are, private or public, but they would actually get a chance to treat patients as they think best.”

The bill passed the Senate by a straight party-line vote of 25-15 in May 2005. Monday’s action in the Assembly returns it to the Senate for a final vote on amendments. The bill is expected to reach Schwarzenegger’s desk by Sept. 1.

During an appearance in July at San Francisco’s Commonwealth Club, Schwarzenegger said, “I don’t believe in universal health care. I don’t believe that government should be getting in there and should start running a health care system that is kind of done and worked on by government,” he said.

Under Kuehl’s bill, the state’s health care overhaul would be partially financed by converting existing governmental programs to the new system, while the rest would come from consumers and their employers in place of private insurance.

All told, the state would save nearly $8 billion in the first year, according to an analysis by the independent Lewin Group that was commissioned by the bill’s supporters.

The report found that consolidating the health care system into a single plan would significantly reduce administrative costs, a finding the bill’s proponents seized upon when arguing in its favor.

Under the measure, “the billions of dollars now wasted on insurance middlemen, CEO pay, record corporate profits, overhead and advertising will be used to provide good, affordable care for all who need it,” said Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights, a consumer advocacy group based in Santa Monica.

Although the bill’s fate is uncertain, supporters said the Assembly’s action marked a turning point in the fight for universal health care.

“Today’s vote shows momentum and a sense of inevitability that this policy will be the law of California, whether in the next month or after the next ballot,” Flanagan said.