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On the plus side, it doesn't look like it was bad enough to get you deindexed.
Actually the site is deindexed. Go to Google and do a "site: http://californiamedicareplans.com/" search and his site does not show up.
Honestly Rick, you would need to do a hefty amount of clean up then do a reconsideration request. I've read up on some of this stuff and it can take anywhere from 6-12 months worth of work to contact all the bad links and try to have them removed then file a reconsideration request. You can also try the Google Disavow Tool. There is no sure fire way to get the site reindexed and even if you did I'm sure the website was ranking entirely on spam links so once its reindexed youll pretty much be at 0 anyway.
I wouldn't do a 301 redirect of a spam domain to your new website. But I would agree that your best bet would to scrap the site take all the content and just move it to a new domain and start fresh.
I know this is not what you probably want to hear but the extent of work I feel for the reconsideration then re-link building would best be spent on a fresh site.