“So it becomes a very expensive, very polarizing debate.” Both sides are proposing what would be the nation’s most ambitious health care reform proposal since the failure of the Clinton plan nearly 15 years ago. But before the governor can proceed with a ballot push, he must also come to terms with Democrats on some thorny issues. One is his idea to require all residents to carry insurance, which Democrats and consumer advocates say would punish working-class people who would not qualify for subsidies. Democrats want to limit workers’ health care premiums to 5percent of their wages. They are also at odds over how to treat businesses when it comes to providing insurance for employees. Democrats would require them to spend 7.5 percent of payroll on health care plans for their employees, or pay an equivalent amount into a state health insurance pool; Schwarzenegger’s plan sets a 4 percent fee. “This 7.5 percent tax is going to make sure that many hundreds of businesses across this state are going to close their doors, because they can’t afford it,” said Sen. Sam Aanestad, R-Grass Valley. “This plan does absolutely nothing to contain costs.” The Democrats’ bill would raise fees on employers and expand public programs to cover about 3.4million of the 4.9 million people who have no insurance throughout the year. The governor’s plan has a broader funding base and would cover more people, about 4.1 million. Funding would come from hospitals, doctors, employers and the federal government. Mark DiCamillo, director of the California Field Poll, said the mix of taxes could be key to deciding the measure’s fate. Voters are much more likely to endorse narrowly targeted taxes for specific purposes, DiCamillo said, than they are to back broad tax increases, such as a sales tax hike, that affect everyone. “The more people that are included, the higher levels of opposition,” DiCamillo said, “because it affects their own pocketbook.” Still, according to an August Field poll, the conditions may be ripe for a health reform initiative. Nearly seven out of 10 voters said they are somewhat or very dissatisfied with the state’s health care system, while just 28 percent said they are satisfied. Proponents of a ballot initiative also would have to educate voters about complicated issues that can be easily distorted. In 2004, voters narrowly rejected a much less expansive health care proposal after business interests spent more than $18million to defeat it. Schwarzenegger, who opposed that plan, was seen as a factor in its defeat. “The truth is sometimes a victim” of ballot battles, said Peter Harbage, an independent health care consultant who advised the governor on his plan. “At the same time, health care isn’t free. There has to be new revenue, and if there’s no way to get it out of the Legislature, you have to go to the ballot.” The Associated Press contributed to this story. firstname.lastname@example.org (916) 441-4603 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! With his universal health care proposal stalled in the Legislature, Gov. Arnold Schwarzenegger said Monday he will call a special session of lawmakers to craft a framework for statewide reform. With the special session, the governor hopes to break the stalemate over his plan to extend medical coverage to the 6.6million uninsured Californians. The governor’s top priority has gotten bogged down in partisan bickering, with the Senate passing a Democratic plan that Schwarzenegger has vowed to veto, Republicans refusing to back the governor’s plan, and lawmakers facing a Friday deadline to end their session. “What everyone wants, and what we all want, is access to health care so it is affordable and so that everyone can have health care,” Schwarzenegger said at a press conference announcing a stem-cell grant at UCLA. “So we are working on this right now. We’re going to have an extended session, a special session that we are calling today.” Schwarzegger hopes a special session would result in a framework for financing healthcare reform that could then be followed up with a ballot initiative next year, when voters would be asked to impose fees on hospitals, force most employers to provide insurance for their workers and possibly raise the sales tax. But a ballot initiative would carry huge risks, as well, exposing the governor’s plan to well-heeled opponents who could spend tens of millions of dollars to defeat it. Schwarzenegger, in turn, would look to team up with Democrats, large businesses, seniors groups and other reform proponents to try and persuade voters to back a complex set of reforms. “There’s a lot of money floating around the health care system, and you can bet every interest group will be trying to have their say in that campaign,” said Larry Levitt, a vice president at the Kaiser Family Foundation, a nonprofit research organization based in Menlo Park.