California's health care initiative: revolution or reshuffling?

February 26, 2007

Today's debate focuses on the need for an overhaul of the state's health care system. The rest of the week, Zingale and Wright will treat insurance as the mechanism for universal health care, coverage for people who can't or won't get it, the experience of other state plans, and the problem at the federal level.

How it's supposed to work

I am excited to participate in this week's discussion about health care reform, a matter of life and death importance to millions of people. And to start, I'd like to explain how some of the terms you'll be hearing about actually relate to the health and well-being of everyday Californians and to Gov. Arnold Schwarzenegger's proposal to fix our broken system.

"Hidden Tax" is what people in California pay to subsidize the 6.5 million uninsured. According to the New America Foundation, this amounts to $455 a year for individuals and $1,186 for families. For California businesses, the hidden tax is $14.7 billion annually. Some businesses have seen their insurance premiums rise more than 20 percent a year; individuals have seen their premiums increase as much as 50 percent.

"Shared Responsibility" is the core of Gov. Schwarzenegger's plan to stop these increases by having employers, individuals, doctors, hospitals, insurers and government all do their share so we can get insurance coverage for everyone in the state and end the subsidy of the uninsured by those with coverage. Doctors and hospitals would pay two and four percent of their revenues respectively to help fund the uninsured. And they would no longer have to treat people without getting paid. Companies that don't offer medical benefits to their employees would pay four percent of their payroll to help extend coverage to those without it, and they would have a healthier and more stable workforce as a result.

"Guarantee Issue" is a proposal by Gov. Schwarzenegger and others to end the practice of private insurers picking and choosing whom they sell policies to in the individual market. It would also require insurance companies to plow at least 85 percent of their premiums revenue back into patient care. They would benefit by having more than four million new customers.

"ER Crisis" refers to the fact people without insurance who are injured or sick go to emergency rooms, the most expensive place for treatment. More than 60 emergency rooms have closed in California over the past decade rather than continue treating people without insurance. And ERs have become so crowded it can take anyone up to seven hours before seeing a doctor. The Governor's proposal deals with this growing crisis by covering the uninsured and emphasizing prevention and wellness.

"It can't be fixed" is an all-too-familiar term among those who debate health care reform. Granted, health care is complex, with many inter-connected pieces. And the piecemeal fixes of the past have failed. But we are lucky to have a Governor who hasn't forgotten we can do anything if we have the political will. His comprehensive approach that relies on wellness and preventive care, as well as insurance for everyone and shared responsibility, can help fix this problem once and for all.

Daniel Zingale is senior advisor to Gov. Arnold Schwarzenegger and chief of staff to Maria Shriver.

Schwarzenegger falls short

I, too, am enthusiastic about this week's discussion about health care in this new forum. As the executive director of Health Access California, the statewide health care consumer advocacy coalition, I am even more excited about the prospect of California actually taking action on health care reform this year.

For California patients and families, health care is a deeply personal and important issue that goes directly to one's life and livelihood. Californians are more likely to be uninsured than people in 45 other states. More than 6 million Californians are uninsured -- 80% are workers or their family members -- and many more are underinsured. Those who are uninsured live sicker, die younger, and face financial ruin from injury or illness. Those who have insurance now fear that it won't be there for them when they need it. They want the security of knowing they won't lose coverage because of a job change or recession, and that it will be comprehensive enough to provide needed care.

In the past four years, the California legislature has made three major efforts at health reform, to expand coverage and provide greater security to those who have it. One effort set a standard to ensure that employers to provide health benefits to their workers, much like the minimum wage does for pay (SB2 in 2003); it passed an expansion of public insurance programs to cover all California children (AB772 in 2005); and last year, it passed a reform that would bring all Californians together under a universal health care system (SB840 in 2006). Each of these efforts to strengthen group coverage were opposed by Governor Schwarzenegger, either in ballot campaign or by a veto.

As a critic of the Governor for those positions, I credit Governor Schwarzenegger for taking up the challenge, for coming out this year with a detailed and serious plan. It incorporates elements of these previous proposals, but within an overall framework to his liking.

So now we have the parameters of a debate, and with regard to the Governor's proposal, there are parts we support, and parts we oppose. We mostly agree on the problem: our current broken health system places health and financial burdens on not just the uninsured, but on us all. We agree on the overall concepts, such as the need to emphasize prevention, and "shared responsibility," and the plan does expand group health coverage in key ways.

It falls short in setting a standard for employer-based coverage--asking for far less than what most employers already do. It's a little like agreeing to a minimum wage, but setting it at $4, not really providing a benefit given the current California economy. Many large employers meet the 4% threshold the Governor suggests, yet they only cover a portion of their workforce. For example, they restrict eligibility only to certain workers, or impose one-, two-, or three year waiting periods.

But our biggest concern is that the Governor's proposal does not include "shared responsibility" for many Californians who don't qualify for publicly subsidized programs or employer-based coverage, who would be forced to purchase coverage without consideration of ability to pay, without a defined and meaningful benefit, without the power of group purchasing. For those uninsured working at a chain restaurant waiting 30 months for on-the-job benefits, the risk and responsibility would be on them, all alone. That's not the point of reform.

It's great that the Governor and legislative leaders have made the debate this year in Sacramento is about how to accomplish health reform, not whether it should be achieved. This year, 2007, is not the beginning of the health care debate--this year, we should act to make sure that Californians get the health care they need when they need it.

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