Governor's Solution Is a Gift to Insurance Industry

Governor Schwarzenegger has finally jumped on the healthcare reform bandwagon, but his proposal and those of two Democratic legislators, Assembly Speaker Fabian Nunez (AB 13) and Senate President Pro Tem Don Perata (SB 48) miss the boat by failing to deal with cost containment, insurance industry profits, or what constitutes adequate healthcare services. We don't need more health insurance options - we need univeral access to affordable, quality health care!

The governor would address some of the worst insurance industry practices by banning denial of coverage based on age or health status, and limiting the amount that can be spent on administration to 15%, as well as including access to services for undocumented families. But his plan requires that "every individual have insurance, not just every worker. Yet his plan doesn't ensure coverage will be comprehensive and affordable," according to State Senator Sheila Kuehl in a Jan. 9, 2007 opinion piece in the LA Times. Families of four earning more than $50,000 per year would be required to pay for their own insurance, which could cost more than $10,000 per year. As Richard Brown, director of the UCLA Center for Health Policy Research-and a star of our very own OneCareNow campaign DVD-notes, "that's not catastrophic coverage, that's catastrophic expense!" And where would this money go? To the insurance industry!

This mandate on individuals to buy insurance is similar to the Massachusetts plan. According to California Nurses Association President Deborah Berger, writing in the SF Chronicle on Jan.11, this

approach is not working well there. "Many people are choosing not to sign up, even with the tax penalties, because they cannot afford the plans."

The governor also adopts President Bush's plan for individual health savings accounts by requiring employers to allow employees to put away pretax money to pay for unreimbursed medical expenses. These accounts basically shift costs and liability from insurance companies back onto consumers and patients.

The governor's plan would require employers to spend only 4% of payroll to insure their workers, or contribute the same amount to a state fund. As Senator Kuehl points out, "this is not sufficient to purchase insurance for the working uninsured...This means that the governor's plan can at best provide high-cost, low-benefit plans for many Californians; it limits what employers pay but not what individuals must pay or what insurance companies can charge."

Even worse, although this governor's motto is "no new taxes," he would tax hospitals and providers serving the indigent and uninsured, in order to divert funds to buy coverage for the uninsured. Yet again more tax dollars flowing to the insurance industry, which will spend some 30% on administrative overhead rather than direct services! This would have a disastrous impact on safety net hospitals and community clinics, including our own Alameda County Medical Center.

SB 48 and AB 13, sponsored by Nunez and Perata, are limited because they focus on covering the employed, nor do they specify what is meant by basic coverage. Both create healthcare trust funds which offer plans from private insurers, although they also attempt to restrain administrative expenses. Under AB 13 workers would be required to accept coverage offered by their employers unless premiums and out-of-pocket costs exceed a certain level; their alternative is to purchase insurance from the pool.

All of these plans rely on a market-based system, which, as noted by Burger, is "the very source of the present crisis."

The only plan that guarantees everyone a high standard of benefits, choice of physician, cost containment, community involvement in allocating healthcare resources, and affordability is Senator Kuehl's SB 840, which is being reintroduced in this legislative session. As the new chair of the Senate Health Committee, she writes that "I'm committed to working with all stakeholders - the governor, the Legislature, medical professionals, labor, business and consumers - to craft real healthcare reform this session.

I believe that SB 840 provides the best way to meet the goal of universal healthcare for Californians. Any other incremental reform must move us toward that goal."

We agree. As Dr. Benjamin Lerman of Highland Hospital in a letter to the SF Chronicle, "The only workable way to provide health care to all, while also controlling costs, is that adopted by nearly every other industrialized nation-a single-payer plan."

For more information on what's happening in Sacramento, as well as a report on recent meetings by a statewide OneCareNow campaign strategy group, please attend the next Vote Health membership meeting Monday, Jan. 22, 2007.

Executive Committee Elections

We will accept nominations for Vote Health officers and members of the Executive Committee at the January 22 meeting. Your Vote Health dues must be current to vote or run for office.

Dues are $35 regular per year, $15 low income. You can pay at the meeting.

Health Care Doesn't Come Cheap

Support single payer by supporting Vote Health

Vote Health is currently conducting a membership and fundraising drive. You can still donate either to Vote Health directly, which is not tax-deductible, or to the HCA Education Fund if you want to take a tax deduction for your donation. If you make out a check to HCA-Ed Fund, be sure to note "Vote Health" in the memo line so that it gets credited to us.

You can send your donations to VH at P.O. Box 18922, Oakland, 94169 or bring them to the our meeting.

Newsletter committee:
Jan Arnold, Bradley Cleveland, Kay Eisenhower and Jim Forsyth.
Our thanks to CA Nurses Association for their help in producing this newsletter.