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When Arnold
Schwarzenegger
introduced a
plan this
past January
to reform
California’s
health care
system, many
people said
there was
little
chance the
plan would
ever be
approved.
The issues
were too
formidable,
they
claimed; the
political
hurdles, too
high to
overcome.
Nine months
later, the
California
Legislature
is meeting
in a special
session to
consider a
revised
version of
the
Governor’s
plan. In
looking at
this revised
proposal,
the question
that people
should be
asking is
not whether
it is a
bridge too
far
politically,
but rather,
from the
standpoint
of good
policy,
whether it
is a bridge
to nowhere –
an
ill-conceived
boondoggle
that will
cost too
much and
benefit too
few.
The Governor
has said he
would “never
close the
door on
anything,”
and his
revised plan
is proof.
Perhaps the
biggest
highlights
are that it
will cost $5
billion more
than the
plan
introduced
in January,
and would
rely on the
lottery to
fund health
care. The
Governor has
said that
funding to
replace the
lottery
(truly
reliable
funding)
would have
to be set
later.
Under the
new plan,
California’s
workers,
providers
and
individuals
would still
collectively
strain to
insure the
state’s
uninsured.
All
Californians
would have
to buy
health
insurance,
insurers
would be
subject to
guaranteed
issue, and
hospitals
would still
be under the
gun for 4%
of revenues,
but only
after a few
stipulations
from the
California
Hospital
Association.
Perhaps the
most
significant
of these
stipulations
is that
hospital
taxes would
be kept
separate
from
California’s
general
fund, and
they would
first go to
increase
Medi-Cal
(Medicaid)
payments to
hospitals,
and then to
California’s
uninsured.
Of course,
these
increases
will be
soaked up
quickly. The
Medicaid
bureaucracy
owes
providers
some $750
million in
reimbursements.
As a result,
fewer
doctors are
participating.
Two
long-term
care
facilities
have already
filed suits
against the
state of
California
for not
providing
requisite
Medi-Cal
payments. In
fact, Medi-Cal
is second
only to
Texas for
the highest
Medicaid
bill in the
U.S., at $35
billion.
Nevertheless,
Governor
Schwarzenegger
wants to
expand Medi-Cal
and related
programs for
900,000 more
Californians.
Amidst
protests
from the
California
Medical
Association,
the
governor’s
new plan
would no
longer tax
doctors 2%,
but it would
still tax
employers --
this time,
based on
payroll
rather than
the number
of
employees.
If the
business’
payroll is
more than
$100,000 and
you don’t
already
offer health
benefits,
then you
will pay a
health care
fee on a
sliding
scale from
0-4 %.
Perhaps the
single best
aspect of
the
Governor’s
revised plan
is to align
state tax
laws with
federal laws
by allowing
Californians
to make
pre-tax
contributions
to Health
Savings
Accounts (HSAs),
a kind of
401(k) for
health. HSAs
paired with
high-deductible
health plans
will
encourage
Californians
to save for
health care
rather than
depending on
employers or
the
government.
More than a
third of
today’s HSA
owners were
previously
uninsured.
Schwarzenegger
is working
towards a
finance
proposal for
the November
2008 ballot.
If he really
does intend
to “keep the
door open”
through this
process,
then he
should
follow the
lead of
State Senate
Republicans
to fix,
rather than
force,
insurance.
The state
should
reform
“scope of
practice”
laws
affecting
nurse
practitioners,
who are
qualified to
provide
basic,
affordable
health care.
This would
allow
Californians
to take
advantage of
retail-based
“convenient
clinics,” a
competitive
answer to
emergency
rooms for
basic
services.
Also, costly
government-mandated
health
benefits
force
Californians
out of
individual
insurance.
Insurers
need to
compete with
each other
to meet the
needs of
individual
patients.
These
incremental,
common sense
steps may
not provide
for dramatic
headlines.
But they
will provide
people with
a bridge
that leads
to a better
health care
system – a
system that
is defined
not by
government
taxes or
mandates,
but by
choice,
quality and
cost-effective
care.
-###-
Diana Ernst
is a Health
Care Policy
Fellow at
the Pacific
Research
Institute.
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