California's health care initiative: coverage and coercion

February 28, 2007

Today's debate focuses on the individual mandate for insurancecoverage. Previously, Wright and Zingale discussed thebasics of Gov. Arnold Schwarzenegger's healthcare initiativeand thewisdom of using insurance as the mechanism for universalhealthcare. The rest of the week, they will debate theexperience of other state plans and the problem at the federallevel.

How it's supposed to work

Right off the bat, I want to make it clear that Gov. ArnoldSchwarzenegger continues to call on the federal government tosecure our borders and to pass comprehensive immigrationreform.

But the governor is also a realist. He knows undocumentedimmigrants already get free medical care in California. That'sbecause federal law says no one can be denied treatment at ahospital emergency room, which is where people without insurance gowhen they are sick or injured.

So the question for the governor has been do we treatundocumented immigrants in emergency rooms at the highest costavailable or do we do it efficiently?

The governor believes everyone should have coverage, so the restof us can stop subsidizing billions of dollars in medical treatmentfor people without insurance. That includes undocumented immigrantsand healthy people who don't feel like buying insurance becausethey don't think they need it.

In the case of undocumented immigrants, the governor is tryingto move them out of costly emergency rooms and into clinics. Rightnow, federal, state and local funds reimburse hospitals, clinicsand emergency care centers about $4 billion a year to cover themedically indigent, and the governor's plan would redirect fundstoward prevention and primary—rather thanemergency—care.

As for healthy people who choose not to buy insurance, it's notfair that the rest of us cover their costs when something happensto them. That's why the governor includes an individual mandate inhis plan—with the teeth to make sure it's enforced.

And there will be four points at which the state can verifywhether people are covered. When they go to a doctor's office orclinic and cannot produce proof of coverage, the state will developan enrollment system that health care providers can use to enrollpeople in health insurance. If an employer provides insurance toits workers, it will certify that information in quarterly wagereports already required to be filed with the California EmploymentDevelopment Department. Employers that have more than 10 employeesbut choose to not offer coverage will pay EDD an in-lieu fee of 4%of payroll. And all individuals will be required to provide proofof insurance when they file their state income tax. People whocan't provide proof will be assessed a tax debit of $100 a month,which would go into the state pool used to provide insurance forthose without coverage.

Requiring everyone to be covered, including undocumentedimmigrants and healthy people who think they don't need insurance,is the only way the rest of us can stop being charged billions ofdollars a year to subsidize the uninsured.

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

Don't blame young Californians

Daniel, I think you mis-read mypost yesterday. My support for a universal single-payer systemindicates I am fine moving away from employer-based coverage, butonly if we replace the security that it provides to 19 millionCalifornians. This means a system that includes fair financing frombusiness, as well as a way for people to pool together for groupcoverage.

I also acknowledged that parts of the Governor's plan serve toexpand group coverage, at the worksite or through public programs.But under the rhetoric of "shared responsibility," the Governor'splan forces too many Californians to face the risk and cost ofhealth coverage all alone, without any assistance whatsoever. Thatincludes many middle-income families, as well as undocumentedCalifornians. My argument is that the Governor's plan does notmatch his own rhetoric. It isn't truly "shared" responsibility.

That leads me to my rant for today. Regarding the "individualmandate" described today, my concern is with the policy and withthe rhetoric. With all this talk about the hidden tax, the Governorcomes dangerously close to blaming the victim.

We reject reforms that send the message to patients andconsumers, "It's your fault," especially when it is not.

With all the problems and players in the health caresystem—with insurers who profit by denying care, drugcompanies that price-gouge, employers who don't offer coverage, andothers—can it be true that the Governor's "individual mandate"proposal places the harshest punishment not on those interests buton uninsured Californians?

Who are the uninsured? More than 80% are workers, or familymembers of workers. The vast majority are citizens and legalresidents. (Let's be clear: we have a legal and public healthobligation to provide care to all Californians, but even if wedidn't have a single immigrant in the state, we would still have amajor health crisis to fix.)

The uninsured are not so by choice—they want coverage, butare largely not eligible for on-the-job benefits or publicprograms, and find buying coverage unaffordable or unavailable,because of "pre-existing conditions." The notion of "individualresponsibility" is felt now by uninsured families that facethe real health and financial consequences.

It's just incorrect that uninsured people simply get "freecare." Even when they go to the emergency room, they get a bill. Infact, Governor Schwarzenegger signed two bills we sponsored lastyear to try to rectify the longstanding problem that uninsuredworking families often get charged more for care (for hospital careor prescription drugs) than anybody else in the system, becausethey don't have an insurer or public program to bargain for them.As a result, many uninsured face medical debt and bankruptcy.

An individual mandate only makes sense if you think the problemis that people don't want health coverage. But we know that ifpeople are eligible for employer-based coverage or public programs,they overwhelmingly take them up. The Health Access California website features a paper[PDF] opposing the individual mandate: the subtitle is"Unwarranted, unworkable, and unwise."

The question by our Dust-Up moderators suggest that the problemis the so-called "young immortals," those 20-something Californianssupposedly too hip to have insurance. While young people aredisproportionately uninsured, the reason is not their youth, buttheir lower incomes and job type.

The difference is entirely explained by the fact that they aremore likely to work at McDonald's or Wal-Mart, at lower-income jobsthat are less likely to provide health coverage. If offeredcoverage, they overwhelmingly take it up, just like older people.They just are more likely to have to wait 20 months to getcoverage, yet the Governor's plan would force this $28,000entry-level worker to buy coverage without any help from heremployer or elsewhere.

Young people aren't shunning health care. In fact, given theirpast voting records, I would argue that if we win health reformthis year, it will be because of the support of youngCalifornians.

So I don't disagree with the Governor's point about the "hiddentax," that having so many uninsured creates a strain on the healthsystem as a whole, and that we all have a stake in health reform.But don't think the uninsured don't want coverage, or that they getoff with free care and without consequence.

Anthony Wright is the executive director of Health AccessCalifornia, the statewide healthcare consumer advocacy coalition,which hosts a daily bloghere.

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