Governor’s healthcare plan could help slash a hidden tax

Regarding Rick Wartzman’s column “Governor’s health plan could be short-lived,” California & Co., Jan. 26:

A poll released last month by the Public Policy Institute of California shows that 71% of voters agree with the governor’s plan to require all Californians to have insurance, with responsibility shared by individuals, employers, healthcare providers and government.

In 2005, health insurance premiums rose at more than twice the rate of wages and inflation. As many as 6.5 million Californians lack healthcare coverage. The uninsured receive healthcare -- but often only after minor problems become serious and in costly emergency rooms.

The cost of care is shifted to those with health insurance, who pay a hidden tax in the form of rising premiums. Estimates place the hidden tax at $1,186 for families and $455 for individuals. California businesses pay a hidden tax of $14.7 billion each year.


We must come together and create a more functional market in which everyone is insured and providers are fairly compensated. In so doing, we can dramatically reduce the hidden tax and make insurance more affordable for all Californians.

Kim Belshe


California Health and

Human Services Agency



So Gov. Arnold Schwarzenegger wants to tax doctors 2% of their gross income to create an even larger patient population upon which they lose money in the hope that some of their money might trickle back down to them through the government bureaucracy?


Add that tax to the impending draconian cuts in Medicare reimbursements, and the doctors who don’t leave medicine altogether will see fewer or no Medicare or Medi-Cal patients.

Four emergency rooms closed in Los Angeles last year because they were overwhelmed with illegal immigrants and other indigent patients who lacked insurance. To tax hospitals 4% to “cost-share” for patients they are already legally required to see, regardless of ability to pay, seems to assure further closings and a reduction, not an increase, in service.

Medical care is not a right -- it is a service that must be paid for. If we want equal access to good care to be a right, then most probably we are heading toward a single (that is, government) provider. There will always be rationing of services, whether because of ability to pay or mere availability of services.

We need an honest discussion about how we are willing to mete these services out, but unfortunately, when it comes to themselves or family, everyone always wants the most done regardless of cost or probable outcome.


Eva Segovia, MD

Laguna Beach


I am the owner of a small landscape maintenance company, and we employ about 25 people. Our annual payroll is about $600,000, and we do not provide healthcare benefits for our employees because of the high cost.


Under the proposal by Gov. Schwarzenegger, our cost would be 4%, or $24,000, a year. Rick Wartzman says it should be at least $48,000.

Where do we find this money? If we were to take it off the top, it would result in a loss of 20% to 40% of our profit. Would you like the state to withhold that much of your yearly salary?

I am competing against the unlicensed contractor who does not have to worry about a payroll tax because he pays in cash. I cannot raise my prices without potentially losing a lot of clients.

The alternative will result in many employers with 10 or more employees deciding to pay nine with payroll checks and the rest in cash. This proposal, if passed, would send a lot of firms underground into a cash economy.


Mike Forsberg