California's health care initiative: coverage and coercion

Today's debate focuses on the individual mandate for insurance coverage. Previously, Wright and Zingale discussed the basics of Gov. Arnold Schwarzenegger's healthcare initiative and the wisdom of using insurance as the mechanism for universal healthcare. The rest of the week, they will debate the experience of other state plans and the problem at the federal level.

Right off the bat, I want to make it clear that Gov. Arnold Schwarzenegger continues to call on the federal government to secure our borders and to pass comprehensive immigration reform.

But the governor is also a realist. He knows undocumented immigrants already get free medical care in California. That's because federal law says no one can be denied treatment at a hospital emergency room, which is where people without insurance go when they are sick or injured.

So the question for the governor has been do we treat undocumented immigrants in emergency rooms at the highest cost available or do we do it efficiently?

The governor believes everyone should have coverage, so the rest of us can stop subsidizing billions of dollars in medical treatment for people without insurance. That includes undocumented immigrants and healthy people who don't feel like buying insurance because they don't think they need it.

In the case of undocumented immigrants, the governor is trying to move them out of costly emergency rooms and into clinics. Right now, federal, state and local funds reimburse hospitals, clinics and emergency care centers about $4 billion a year to cover the medically indigent, and the governor's plan would redirect funds toward prevention and primary—rather than emergency—care.

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

And there will be four points at which the state can verify whether people are covered. When they go to a doctor's office or clinic and cannot produce proof of coverage, the state will develop an enrollment system that health care providers can use to enroll people in health insurance. If an employer provides insurance to its workers, it will certify that information in quarterly wage reports already required to be filed with the California Employment Development Department. Employers that have more than 10 employees but choose to not offer coverage will pay EDD an in-lieu fee of 4% of payroll. And all individuals will be required to provide proof of insurance when they file their state income tax. People who can't provide proof will be assessed a tax debit of $100 a month, which would go into the state pool used to provide insurance for those without coverage.

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

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

Daniel, I think you mis-read my post yesterday. My support for a universal single-payer system indicates I am fine moving away from employer-based coverage, but only if we replace the security that it provides to 19 million Californians. This means a system that includes fair financing from business, as well as a way for people to pool together for group coverage.

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

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

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

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

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

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

It's just incorrect that uninsured people simply get "free care." Even when they go to the emergency room, they get a bill. In fact, Governor Schwarzenegger signed two bills we sponsored last year to try to rectify the longstanding problem that uninsured working families often get charged more for care (for hospital care or prescription drugs) than anybody else in the system, because they 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 problem is that people don't want health coverage. But we know that if people 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 problem is the so-called "young immortals," those 20-something Californians supposedly too hip to have insurance. While young people are disproportionately uninsured, the reason is not their youth, but their lower incomes and job type.

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

Young people aren't shunning health care. In fact, given their past voting records, I would argue that if we win health reform this year, it will be because of the support of young Californians.

So I don't disagree with the Governor's point about the "hidden tax," that having so many uninsured creates a strain on the health system 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 get off with free care and without consequence.

Anthony Wright is the executive director of Health Access California, the statewide healthcare consumer advocacy coalition, which hosts a daily blog here.