California ‘Universal’ Health Care

Wednesday, December 19th 2007
Healthcare Policy • Politics • Uninsured • Law • Insurance

Why Am I Not Smiling?

California’s move towards a hacked together, significant expansion of health care coverage has been a little bit of a journey; but now we see they’ve taken a significant step towards realizing Schwarzenegger’s ambition. The State Assembly has passed the actual bill which enumerates the plan.

The measure, negotiated by Schwarzenegger and Assembly Speaker Fabian Nuñez (D-Los Angeles), would require almost everyone in California to have insurance starting in 2010. It would provide subsidies and tax credits for those who would have trouble paying their share of the premiums.

A summary is in order. A good one exists on the Cal Health Reform website. The bill includes:

• An individual mandate, with exemptions if premiums are more than 5% of family income
• Tax subsidies to families <400% FPL to help pay premiums
• Expansion of Medicaid (including to young adults <250% FPL and older adults <100% FPL)
• Employer pay or play mandate (tax of up to 6.5% on wages if employer doesn’t provide insurance as a benefit)
• Hospital tax of up to 4% of revenues
• New cigarette tax of at least $1.50/pack
• State fund (employer pay + hospital taxes + cig taxes) to fund indigent who cannot afford care
• Insurance requirement that 85% of premiums go to patient care
• Kills experience rating and doesn’t allow insurers to refuse coverage because of a pre-existing condition
• Increase in Medicaid reimbursement, potentially up to Medicare fee schedule

If you so desire to read it then here is the full text of the bill.

I’d say two down and forty-eight to go, but obviously that isn’t where my feelings are. My feelings are more like - Yikes! I know I was, if not ecstatic, pretty accepting of the Massachusetts plan and this California plan shares much with that. At least the final bill lacks this:

[D]octors also would have to pay 2% of their gross earnings back to the state to help expand coverage.

But keeping the hospital tax reeks of absurdism. Not that much about the bill is likable if you believe in economic liberty.

There is perhaps some “good” news. Despite the bill’s passage in the Assembly, this plan is far, far from a done deal.

[T]he measure faces a more skeptical reception in the Senate, where Democratic leaders are asking whether it makes sense to adopt such a giant change at a time when California has a projected $14-billion budget gap.

Senate President Pro Tem Don Perata (D-Oakland) did not attend a jubilant news conference with Schwarzenegger and Nuñez, though he is officially a co-sponsor of the bill. He issued a muted statement praising “progress” and saying that he would ask the Legislature’s fiscal experts to determine whether the plan would become a drain on the state’s already depleted coffers.

An even bigger concern may be about asking the citizens to approve the new taxes to fund the proposal. Granted not new personal taxes, but taxes on employers and hospitals which will be passed onto the public in a number of ways.

Nuñez left the financing out of the bill because it would have needed a two-thirds vote to pass, requiring some GOP support. The planned initiative would ask voters to approve taxes: $2.6 billion on employers that don’t provide healthcare, $1.5 billion on tobacco users and $2.3 billion on hospitals.

The initiative is still being drafted. But it almost certainly would have to overcome well-funded opposition from many business groups and the state’s largest insurer, Blue Cross of California.

Tobacco and drug companies might also join the fight, bringing along their substantial financial resources.

The California Chamber of Commerce, which along with the state restaurant association successfully campaigned for the repeal of the last major healthcare measure in 2004, derided the bill passed Monday as “half a proposal.”

The restaurant lobby is also opposed.

With a smirk I’ll note that I’m denouncing a bill which the California Nurses Association has as well if for reasons that are mirror opposites. My positions don’t match up very well with their’s.

As I’ve said over and over, this kind’ve wealth redistribution really doesn’t stand on an ethical base.

Is there a right to property?

Is there a right to…health care?

Without repeating the base on which I’m building this argument (it’s been spelled out numerous times on this blog) I don’t understand how liberals, beyond their emotional reaction to those suffering, are enshrining something as historically evanescent, as ill defined as “health care” into an infallible right. A right more important, more inherent than that of property. Because that is what you’re having to do here to justify a “universal” health care plan like this.

Never forget where this money is coming from. I know income disparity (and perceived commercial greed) immediately entail a gut reaction of unfairness…somehow. But com’n, in the end, by and large these aren’t greedy hospitals and corporations you’re taking from. These are real people. Granted they’re at the top of the income pyramid and sure they can ’spare’ it to fund a “better life” for those at the bottom, but is it really your place to make that determination? You violate it once (just once) and a truly infallible right, like that to property, holds no meaning. That isn’t hyperbole. A political right like that either exists without ex post facto restrictions or it doesn’t exist at all.

I don’t think it is heartless to admit this but I’m disturbed by the emotional rhetoric from those supporting the bill.

Fresno Mayor Alan Autry, gave the most emotional presentation of the [news conference], choking back tears as he recalled how his father, a farm worker, died after receiving substandard medical care that he blamed on a lack of insurance.

“It’s not a political issue,” Autry said. “It’s not an economic issue. It’s a moral issue.”

[…]

“I believe history will show that California was the tipping point in the long-sought dream of an America where every single man, woman and child who works has a choice of secure and affordable and quality healthcare for themselves and their families,” said [SEIU president Andy] Stern…

Maybe Mr. Stern is right. Apparently speaking for the SEIU this was published on The Health Care Blog,

We see this legislation as a work in progress—a crucial step toward the goal of quality, affordable health coverage for every woman, man, and child in America. The plan is not perfect, but waiting around for the perfect plan is a luxury too many Californians and Americans do not have.

Nay-sayers beware: if meaningful healthcare reform can happen in California, America’s largest and most ethnically, economically, and politically diverse state, it can—and must—happen nationwide.

I’ll say this: there’s no doubt that the California plan will fall short of it’s goals but perhaps that won’t matter, perhaps what it will achieve will still be significant. I know it has provisions to try to avoid such but the plan is going to suffer some of the same pot holes that the Massachusetts plan has.

To remove the threat of a public backlash, the state plans to exempt nearly 20 percent of uninsured adults from the state’s new requirement that everyone have health insurance.

The proposal…is based on calculations that even the lowest-cost insurance would not be affordable for an estimated 60,000 people with low and moderate incomes who do not qualify for state subsidies. Forcing them to buy insurance or pay a penalty could jeopardize the rest of the state’s initiative, officials said. Instead, the state board appears prepared to settle for near universal coverage, all but 1 percent of the state’s population.

Referring to the California plan as “universal,” is probably a big mistake. That said, it certainly looks like we may be looking at a tide here. We’ll see how big the early states falter, but it appears that a state based movement towards ‘comprehensive’ health care access is in the works. Michigan may be next in line.

A campaign that claims support from key Michigan labor and religious groups, the AARP and Lt. Gov. John Cherry plans to launch a petition drive next month to ask Michigan voters to approve statewide, universal health care.

The coalition would amend the state constitution to require the Legislature to enact “affordable and comprehensive health care coverage” in the same way the constitution mandates state support of free public education.

The amendment would “create a duty to provide health care coverage for everyone,” Benjamin said. “But it’s not a plan; it’s a constitutional amendment.”

I don’t know why we expected anything different in a place as unique as America. Of course our path towards “universal” health care would be a decentralized, state based one.

And, despite my opposition, it is a path. We all know reform is coming. That’s why things like the Massachusetts plan were swallowed by myself. It’s coming and better to get a little bit of concessions from it (like individual mandates) rather than have to swallow something like a single payer system (although that might be inevitable as well).

Here’s hoping for defeat of some of the key components of the Assembly’s plan. It could happen. But even if this plan goes down in smoke…well, unpalatable reform is coming eventually…just you wait.