If Arnold Schwarzenegger, governor of the biggest state, with one of the most diverse economies in the nation, can bring about a program of universal health insurance, then it stands to reason that other states can as well.

Or can they?

California does represent a broad cross-section of the country. But the Schwarzenegger plan is a delicately hung chandelier of federal matching dollars and mutual sacrifice, much of it carefully arrayed about that state's unique political and health care landscape...

Part of the plan's lure is that it will inject billions into the state's health care economy. By taxing businesses and doctors to increase state health care funding, California will receive nearly $3.7 billion in new federal matching funds -- most of which will be spent back to the state's medical providers and industry.

The prospect of the social and political win gained from covering the uninsured, as well as the economic win from billions of federal dollars, may make other states take a look at the idea, says the New America Foundation's Len Nichols. "Massachusetts makes you think you can reach across a partisan divide. California makes you think, hey, if they can do it with 20 percent uninsured, we can do it in Minnesota."

But for many states, even billions in federal matching funds wouldn't be enough...

Much of the uninsured population falls into the category of working poor. In California, the program is therefore targeted at those who are between 100 percent and 250 percent of the poverty level. Because of California's relatively high median per-capita income -- which is $26,800, or 7 percent higher than the rest of the country -- the state has a smaller proportion of its population that will need help. In comparison, median per-capita income in Louisiana is only $20,322 -- meaning the bill would be heftier there for the same program.

California would pay part of the cost with a tax on employers meant to level the playing field between companies that don't offer health insurance and those that do. Businesses with more than 10 employees that don't offer health insurance will pay a 4 percent fee on their payroll spending. That is designed to end the perverse economic consequence of having businesses that pay for insurance subsidize those that don't, says the New America Foundation's Peter Harbage, one of the architects of the California plan.

"Hospitals and doctors are like any other business, in that when they have a client who can't pay, they have to recoup those losses from elsewhere. So they charge higher rates to insurance companies," who then pass on the cost to business in the form of rising insurance premiums...

For the complete article, please visit the Congressional Quarterly Weekly website.