Mandatory Health Insurance Is Urged

The concept of requiring all Californians to carry their own health insurance is gaining momentum in the Capitol, as some lawmakers and healthcare advocates see it as a politically viable way to deal with the state’s 5.3 million uninsured.

With the November defeat of Proposition 72 halting efforts to require employers to provide healthcare coverage, the concept looks likely to be part of next year’s legislative debate. But it faces huge hurdles over how to make it financially feasible for the poor and enforce it.

Gov. Arnold Schwarzenegger has spoken supportively of the notion in recent months, and that has spurred the California Medical Assn., as well as some lawmakers, to draft their own plans.

“We have too many people that are uninsured in this state,” Schwarzenegger said in October at the Panetta Institute in Monterey. “We have to really address this once and for all, and figure out a way of how we do it, like with car insurance, where we make it law that people carry insurance and that they are really insured, because it’s unfair to so many people when you have people using the hospitals for emergency, and then creating a huge cost.”

But healthcare experts say enacting what they call an “individual mandate” would be challenging. Requiring all Californians to carry their own insurance would have to involve some sort of subsidies for those too poor to pay the premiums -- a difficult task for a state deep in debt.

It could also have seismic reverberations in the insurance market, possibly encouraging some businesses to stop providing health insurance, experts say. Ensuring that everyone takes out insurance and guaranteeing that the very ill are able to obtain coverage could be difficult, they say.

“An individual mandate has to be backed up by extremely generous subsidies,” said E. Richard Brown, director of the UCLA Center for Health Policy Research. “You are pushing people into the individual market, which is a very expensive way to cover people.”

The medical association, one of the Capitol’s most influential players, is devising an individual health insurance mandate that would combine a high deductible with preventive services, such as mammograms, prenatal care and annual exams to catch illnesses before they become overwhelming. Experts view that approach as the only way to create a mandate that is affordable, though it would require subsidies for the poor.

Jack Lewin, the association’s chief executive, said individual mandates offer an appealing political advantage: They could win support among California’s business groups, which led the campaign to defeat Proposition 72. The medical association supported the measure.

“We could cover a lot of people without waging war against business and the business community,” Lewin said. “If we can’t win the battle of an employer-based system and mandates, then we have to look elsewhere.”

Assemblymen Joe Nation (D-San Rafael) and Keith Richman (R-Northridge) are putting together their own proposal. They met with Schwarzenegger’s health secretary, Kim Belshe, a few weeks ago to discuss the topic and are planning to introduce legislation in February.

“I think it’s a workable system and the quickest way to expand coverage to the uninsured,” Nation said.

He said it was also important to move the responsibility for health insurance from employers to individuals as a matter of economic competitiveness.

“I don’t believe American businesses are going to be able to compete internationally unless they can remove themselves from the burdens they face now,” Nation said.

For several weeks, Belshe has been soliciting the views of Sacramento’s healthcare advocates and interests, though the administration has given no signals that Schwarzenegger will include it in the 2005 agenda he plans to unveil next month.

So far, the idea has not drawn active support from business. The California Chamber of Commerce, which led the fight against Proposition 72, has not taken a position on the idea.

Nor have sectors of the insurance industry. Blue Shield of California proposed a similar idea two years ago, but it was coupled with an employer mandate. Tom Epstein, a Blue Shield spokesman, said without that provision, he feared some employers would drop coverage.

“We think it works best when it’s also an employer responsibility,” Epstein said.

But opposition is growing as liberal healthcare advocates have received signs the administration may move ahead with it.

“We think there are a lot of hurdles to make individual mandates work,” said Beth Capell, a lobbyist who represents Health Access and the Service Employees International Union. “I, as an individual, have no ability to bargain. Even health insurance that has a fair price can easily be unaffordable. Some insurers are afraid it will actually increase the price.”

The political battlefield would possibly become a mirror image of the fight over Proposition 72, with unions and many Democrats opposed and Schwarzenegger and some Republicans in favor. That lineup would make it quite a feat to get the measure through the Democrat-controlled Legislature, where unions hold great sway.

“If you don’t have a way for people to get insurance that’s affordable, putting a mandate on them is not going to solve the problem,” said Dario Frommer (D-Los Feliz), the Assembly majority leader. “Without that, the idea of an individual mandate is just ridiculous. As we’ve seen with auto insurance, a lot of people don’t get it because they simply can’t afford it.”

Healthcare for the uninsured is already on the Sacramento agenda. On Tuesday, a coalition of children’s advocacy organizations, teachers, the Los Angeles Chamber of Commerce and others announced a campaign to provide insurance to all Californians under age 19.

The push was timed to coincide with the release of a report by the UCLA Center for Health Policy Research that said 1.1 million children went without health coverage for part or all of 2003. That was an improvement from two years before, when 1.5 million Californian children lacked insurance.

The improvement was the result of increased participation in the state’s public Medi-Cal and Healthy Families programs, even as coverage through a parent’s employer dropped by 4.3%, the study said.

Advocates of universal child coverage hope to achieve it by making it easier to enroll families in the public programs and to expand the eligibility levels for Healthy Families, the state’s program for poor children. That would cost as much as $1.3 billion by some estimates.

Advocates said it would ultimately cost state taxpayers $250 million or $300 million annually, with the rest coming from the federal government, parents and savings from the emergency rooms and other places where uninsured children now get their healthcare.

State Sen. Sheila Kuehl (D-Santa Monica), meanwhile, is reintroducing a plan to replace the network of private insurers with one unified organization.

She said an individual mandate to carry insurance “does absolutely nothing to rein in the costs of insurance companies.”

Requiring individuals to hold their own insurance, Kuehl said, is “an empty promise. It’s a mandate for every spiraling cost to be picked up by the people of California.”