When Gov. Arnold Schwarzenegger wanted to build public support for his eagerly awaited health care overhaul, he turned to a study by the New America Foundation.

The report, released recently by the nonpartisan [New America Foundation], concluded that the average family in California pays a $1,200 "hidden tax" to subsidize health care for the uninsured.

Never mind that Families USA, a liberal advocacy group, released a similar study in 2005. The Schwarzenegger administration has cultivated a close relationship with the New America Foundation, whose centrist philosophy is more in tune with the governor.

Administration officials heard New America was working on the study and asked, " 'Hey, can we use this thing?' " recalled Len Nichols, director of the foundation's health policy program.

"I said, 'Well, sure,' " said Nichols, an economist, adding that New America also has been approached for advice by five presidential aspirants as rising health care costs become a top domestic issue.

As the governor prepares to unveil his health care plan in his Jan. 9 State of the State speech, New America's proposals on how to increase access for the nearly 7 million Californians without insurance may shed some light on the biggest guessing game in the Capitol.

Schwarzenegger has rejected a single-payer health care system that would diminish the role of the private sector and adamantly opposes new taxes.

Nichols said that leaves the governor with only two choices -- "shared responsibility or a lick and a promise" -- if he intends, as he has said, to provide universal access.

And like New America, the governor believes individuals, government, employers, medical providers and insurers must all be involved, said Kim Belshé, Schwarzenegger's secretary for health and human services.

The big question is whether Schwarzenegger will require workers and their employers to contribute to insurance premiums -- and how those costs would be divided among the various parties.

"The individual mandate is the kind of thing you've got to have," Nichols said. "The optional piece is the employer requirement. But in the real world -- and especially in California -- you're probably going to have one."

Belshé said "finishing touches are being put on the governor's plan," but she declined to say whether it would place requirements on individuals or employers...

Any mandates would likely set off a battle in the Capitol...

New America maintains such clashes between the right and left have led to public policy paralysis.

Founded in 1999 by policy wonk Ted Halstead, the foundation has nurtured a new generation of public intellectuals who believe old ideologies are outdated.

Halstead laid out his philosophy in the 2001 book Radical Center: The Future of American Politics, written with Michael Lind.

New America's donors include some of the titans in the field, including the David and Lucile Packard Foundation, Pew Charitable Trusts and John D. and Catherine T. MacArthur Foundation.

With headquarters in Washington, D.C., New America also has a significant presence in California, which it calls the nation's largest laboratory of democracy.

Two years ago, when Schwarzenegger first expressed interest in the concept of requiring all Californians to purchase health insurance -- as the state requires for auto insurance -- the idea was modeled on New America's national plan.

Belshé met with Nichols' predecessor, Laurie Rubiner, to hear more about the proposal.

"We've been working with them ever since," said Nichols, adding that New America has given the administration "lots of different ideas."

In November 2005, New America convened a symposium in Sacramento -- attended by Belshé and other health care experts -- and unveiled a plan that would require parents to insure their children. Included were tough penalties for noncompliance and tax credits for private coverage.

Last summer, New America officials were invited to the governor's summit on health care in Los Angeles, where the governor said he was particularly struck by the market-based solutions and "patient responsibility" advocated by some speakers.

Belshé said the New America Foundation is one of several organizations the administration has reached out to for suggestions.

"They've really invested a lot of time and attention to this issue and have done some very thoughtful writing and analyses," she said. "They're one of a number of different sources that have helped inform the administration's thinking about this complicated issue..."

"I know that if we work together the same way we have done with our infrastructure package this past year, we will be very successful," the governor said during a visit to an emergency room in Los Angeles, where he touted New America's "hidden tax" study.

Nichols, who served as a liaison between the Office of Management and Budget and policy-makers during President Clinton's unsuccessful fight for universal health coverage in the early 1990s, believes Schwarzenegger is in a "unique position."

"He's in a place where he could engage a hell of a conversation in a state that's always been a leader in these matters," Nichols said. "We're all sitting here with our fingers crossed and waiting for Jan. 9." ...

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