How to Spread a Policy Disease : Washington must act on health-care reform

Washington, take note: While Congress and the White House play political poker over how much national health care reform there should be and how soon, the nation’s most populous state isn’t waiting to play its high-stakes hand.

On the November state ballot is an ambitious but ill-advised initiative called the California Health Security Act. More than a million signatures were collected in order to bring the Canadian-style health care proposal up for a vote.

Absent action at the federal level, many Californians won’t see any reason not to vote for the sweeping measure, which would create the largest government entitlement program ever put together by a state.

To finance a plan that would provide medical care for all lawful residents of California, the plan would require payroll taxes of from 4.4% to 8.9% and would boost the state’s income tax 2.5% to 5%. This is worrisome (it would also add $1 a pack to the price of cigarettes, which is not). Doctors and hospitals would be paid by a new state agency.

This plan goes further than the one proposed by President Clinton, and goes leagues beyond most other plans being seriously discussed on Capitol Hill. Therein lies the political lesson for Congress: Take the lead in health care or accept the consequences. Failure to achieve reform at the national level can only spur more piecemeal state approaches such as the one now on the California ballot.

Congress has made progress: Two Senate committees and two House committees have passed health care reform bills. But the naysayers (“no real need for health care reform”), the zealots (“blow up the current system and start over”) and the great undecided middle have been unable to reach any agreement.

Democrats and Republicans should come together on the issues that most can agree on: attacking insurance fraud, cutting paperwork, outlawing insurance discrimination based on pre-existing illnesses. Another reform that should be popular: the formation of voluntary employer alliances, like the Health Insurance Plan of California, the nation’s first working alliance. Through the HIPC, workers are banding together in a large purchasing group and negotiating insurance rates that are 10% to 15% lower.

Surely Clinton and Congress can agree in these key areas, as well as on the proposition that any true reform bill must move this nation firmly if patiently toward insurance coverage for all. Time is running out for the nation’s best chance at reform. Without it, states will go their own way, and the ultimate result could well reduce the momentum for comprehensive national health care reform.