An insurance role model for California

POLITICS THESE DAYS seems more like medieval warfare than a civilized process designed to improve the quality of life. So when a Republican governor and a Democratic legislature put down their lances and shields and came together on a plan to provide health coverage for virtually all Massachusetts residents, it justifiably made headlines across the country.

But what does it mean for us in California? Is it an example of what’s possible here, or a feat unique to a wealthy New England commonwealth with a population of just 6.4 million? As much of the media coverage has noted, relatively few people in Massachusetts are uninsured -- just 12% of the population, compared to 16% nationally and 19% in California. And unlike California, Massachusetts has a budget surplus, special federal funds obtained through Medicaid and a pool of state money already dedicated to paying healthcare costs for the uninsured.

Still, we can learn from Massachusetts that things get done if people compromise. In 2002, Blue Shield proposed a universal coverage plan for California resembling the Massachusetts legislation. Despite support from hospitals, physicians, Kaiser Permanente and many health policy experts, our bill languished in the California Legislature. Last year, our Republican governor and Democratic Legislature couldn’t even agree on a plan to insure all children -- a goal that both supported and that is far simpler and significantly less expensive than universal coverage. Now, with a November ballot measure looming that expands children’s healthcare coverage, the two sides aren’t even talking to each other about healthcare reform.

California policymakers would do well to embrace two critical elements of the Massachusetts plan.

First, Massachusetts mandated shared responsibility. Borrowing a concept from laws mandating auto insurance, it requires everyone to obtain health coverage. This appeals to conservatives’ preference for policy solutions that stress personal responsibility. The law also expands government insurance programs, subsidizes private coverage for the near-poor and imposes a fee on larger employers that don’t offer coverage, all of which appeals to liberals.

This hybrid approach makes sense not only as political strategy but as a practical way of getting everyone covered. Even in Massachusetts, the costs of expanding coverage to all are considerable -- more than $1 billion annually in a state with a $27-billion budget. The only way to ensure the sustainability of that expense over the long term is through universal responsibility, spreading the cost broadly among all sectors of society: individuals, government and employers.

Second, Massachusetts made coverage affordable. Too often, proposals for rich benefit packages are defeated when legislators realize how much they’ll have to raise taxes to cover the costs. Massachusetts averted this trap by adopting a multi-tiered approach that ensures comprehensive, no-deductible coverage for low-income residents but allows insurers to offer low-cost, slimmed-down policies to young adults. Twentysomethings, whom I like to call the “young immortals,” frequently choose not to buy coverage because they’re generally healthy, think it’s too expensive and assume that nothing will ever happen to them. Requiring them to buy coverage, but enabling them to get low-cost, less-comprehensive policies that provide catastrophic benefits, makes good sense.

California should note that while comprehensive benefits for all would be ideal, compromises to maintain affordability must be part of any viable plan. We shouldn’t let the perfect be the enemy of the good.

California has many more uninsured residents, and a structural budget deficit, so solving this problem will be much tougher than it was in Massachusetts. But we must succeed. Our political barons need to stop the jousting, take off their armor, sit around a heavy wooden table at the nearest castle and forge a deal. If we don’t do it through the legislative process, the knights will suit up for an initiative war that could lock us into a system even worse than the one we have today.