Gov. Arnold Schwarzenegger has a decision to make. Should he allow California to rush out and prematurely create a massive, billion-dollar, state-run healthcare bureaucracy to implement ObamaCare – the national health insurance program passed by Congress earlier this year? I say no, not at this time.
Last week, I sent a letter to Schwarzenegger urging him to veto two bills, Assembly Bill 1602 and Senate Bill 900. These two bills are yet another rushed attempt by California to be "first" to set up something new. In this case, it is the Health Benefits Exchange required by the controversial Patient Protection and Affordability Act (ObamaCare) passed by Congress this winter. The bills go far beyond what is required by federal law and have the potential to cost the taxpayers of California billions of dollars.
AB 1602 and SB 900 enact the "California Patient Protection and Affordable Care Act" (PPACA) and the California Health Benefits Exchange, respectively.
First, it is important to note that these bills do nothing to contain healthcare costs, expand the number of medical providers and address the absence of price signals to users. The notion that the buying power of an exchange will "bend the cost curve" is completely unrealistic, as the rates paid by CalPERS for health coverage are imperceptible from the rates paid by large groups. Moreover, in a report by the Legislative Analyst (LAO), "The Patient Protection and Affordable Care Act: An Overview of Its Potential Impact on State Health Programs," the LAO notes, "Leaving the creation of the exchange to the federal government would relieve the state of a formidable administrative task." It is not clear how California is in any position to take on additional responsibilities during this time of extreme budget and economic duress.
In addition to the devastating policy implications noted above, there are obvious and practical downsides posed by these bills. Currently, a growing number of states are challenging the constitutionality of President Obama's healthcare legislation on the basis that it impermissibly expands the scope of federal power under the Commerce Clause, that it creates an unfunded mandate on states, and that it unlawfully coerces citizens to buy health insurance by imposing a tax on individuals who choose not to purchase. Presented with these ongoing challenges, it would be unwise and premature to enact state law counterparts at this time. Doing so would lead California into a bureaucratic maze from which it would be impossible to backtrack, and would be a complete waste of taxpayer funds should the federal legislation be found unconstitutional. Prudence dictates that now is not the time to move forward on AB 1602 and SB 900.
Lastly, we all know you can't put the genie back in the bottle. Once California creates a bureaucracy, it will be virtually impossible to dismantle it should the states prevail in court.
TOM HARMAN is a state senator covering the 35th District, which includes Huntington Beach and Fountain Valley.