Gov. Arnold Schwarzenegger on Monday proposed to extend health coverage to nearly all of California's 6.5 million uninsured people, promising to spread the cost among businesses, individuals, hospitals, doctors, insurers and government.

The plan contains elements that are likely to provoke opposition from a wide range of powerful interests, including doctors, hospitals and insurers, as well as employers and unions. But it also contains incentives for each of them.

All children, regardless of their immigration status, would be covered through an expansion of the state and federal Healthy Families program.

"I don't think it is a question or a debate if they ought to be covered. ... The federal courts have made that decision — that no one can be turned away," Schwarzenegger said. "The question really isn't to treat them or not to treat them. The question really is how can you treat them in the most cost-effective way."

The United States is among few developed countries without some form of federal universal health coverage. Early in the administration of President George W. Bush's predecessor, Bill Clinton, the administration recommended an elaborate plan for universal health coverage. Pilloried by huge amounts of advertising, much of it sponsored by the insurance industry, the plan went nowhere.

Under Schwarzenegger's state plan, all Californians would be required to have insurance, although the poorest would be subsidized. Businesses with 10 or more employees would have to offer insurance to their workers or pay 4 percent of their payroll into a state fund. Smaller businesses would be exempt.

Also, insurers would no longer be allowed to deny coverage to people because of their medical problems.

Business groups and Republican legislators are likely to object to the extra costs imposed on businesses.

The state would subsidize the estimated 1.2 million poor people who do not currently qualify for state health coverage. They would be able to buy insurance through a state-run pool and would have to make a small contribution toward their premiums.

Schwarzenegger is betting that his plan will save $10 billion (euro7.7 billion) a year by cutting health care costs. He says the savings would offset the new fees he is asking doctors and hospitals to pay — 4 percent of revenue for hospitals and 2 percent for doctors.

The state also would increase what it pays doctors and hospitals through Medi-Cal, the state insurance plan for the poor.

The governor was supposed to give his address in person to a panel of health care officials. Instead, he spoke via video link since he is still recuperating from broken leg suffered in a skiing accident.