Proposal: Get health insurance or pay fine
People who refuse to obtain health insurance could be tracked down by the state or a private contractor, enrolled in a plan and fined until they pay their premiums under one proposal Gov. Arnold Schwarzenegger’s administration is considering as part of his vision for covering all Californians.
The proposal, which administration aides said was one of many the governor was considering, was presented at a meeting Tuesday with representatives from insurers, hospitals, doctors, business groups and consumer advocates.
It drew immediate criticism from critics of the central tenet of Schwarzenegger’s healthcare approach, which is to require all Californians to obtain insurance.
Although the governor’s office has been emphasizing the efforts it would make to help people find insurance voluntarily -- including subsidies to the poor and outreach through schools, state agencies and healthcare providers -- the outlines of the enforcement proposal inflamed some of those the administration has been courting for support.
Beth Capell, a lobbyist for the Service Employees International Union’s California organization, said the fines might be unfairly levied on people caught without health insurance because of circumstances beyond their control. Those included people in between jobs and those starting employment in companies that did not provide healthcare for the first months of work.
“We’re going to punish them if they don’t go out and buy health insurance on their own -- health insurance that they can’t afford at the moment that they are least able to afford it,” Capell said.
Other proposals, which Schwarzenegger included in the first draft of his healthcare plan, are to attach the wages of people who don’t buy insurance and to increase the amount they owe in state income taxes.
Kim Belshe, secretary of the state Health and Human Services Agency, emphasized that “nothing is set in stone.” But Schwarzenegger’s call for “shared responsibility” includes a need for everyone to be part of the insurance system, she said.
The proposal to locate people without insurance would use state or private databases and target those who lacked coverage for 60 days or more. The administration said the goal was to be helpful and the initial notification would be designed to alert people to the need for insurance and provide ways for them to find coverage.
Only those who still did not obtain insurance would be subject to involuntary measures.
“It represents one approach to enforcement,” Belshe said of the proposal. “But I want to underscore the emphasis of the governor and the administration is on enrollment, and creating a culture of coverage that connects people to affordable, available health coverage.”
With more than 6 million residents lacking medical coverage in California, the requirement to obtain health insurance is one of the most contentious points of Schwarzenegger’s plan.
Schwarzenegger wants to offer public subsidies to the least affluent Californians. But many Democratic legislators, unions and consumer advocates have objected that others will not be able to afford even the bare-bones, high-deductible plans that Schwarzenegger would require as a minimum, which cost $1,200 a person a year.
Those plans would include deductibles as high as $5,000 on top of the premiums, and would be geared toward protecting people from the costs of catastrophic medical bills, such as those arising from surgery or cancer treatment.
An alternative plan by Senate President Pro Tem Don Perata (D-Oakland) also includes an insurance requirement. Those who did not obtain insurance would be unable to claim a credit on their income taxes of perhaps less than $100.
A proposal by Assembly Speaker Fabian Nunez (D-Los Angeles) does not include an insurance requirement.
Peter Harbage, a senior program associate with the nonpartisan think tank the New America Foundation, said relatively few people would have to be forced to buy insurance. Schwarzenegger has cited the foundation’s research in helping to frame his plan.
“Most people are going to have insurance if the program is well designed and well constructed,” he said in an interview Tuesday. “And then you’re going to have some people who are bad actors, and that’s where you need some sort of tracking system.”
The governor said he is studying as a possible model a new system the state Department of Motor Vehicles is using to locate drivers who lack automobile insurance. Another model, he said, is the one the state uses to track down people who don’t pay child support.
“There’s no easy way to come up with a tracking model,” he said. “It’s going to take some thought and it’s going to be complex.”
Work on the healthcare issue, which Schwarzenegger has identified as his top priority for the year, has been moving slowly. Republicans in the Legislature have offered their own ideas, none of which require employers or individuals to buy insurance. Democrats are still trying to determine how much their alternatives would cost.
In an effort to build consensus among insurers, hospitals, doctors and consumers, the administration has been having private briefings in recent weeks.