Businesses Could Be Key to Health Care Reform

Published on

KPCC 89.3FM (Pasadena, CA)

The following commentary by Jamie Court was broadcast on KPCC 89.3FM in Pasadena, CA, on Friday, September 23, 2005. Click here to listen to the commentary.

Starbucks says it spends more on health care than on coffee. General Motors reports it pays $1,500 in health care costs for every vehicle it builds. When health care costs are unbearable not just for average workers but for Fortune 500 companies, you can bet something’s gonna change.

In California, there’s bipartisan agreement about how to handle the sticker shock in health care — insure everyone. Costs go down when there are more people bearing them. It’s also cheaper treating the sick in a doctor’s office than in an emergency room.

Republicans — led by Assemblyman Keith Richman — want to require everyone to buy health insurance. The catch is, they don’t want to regulate the cost. Under Richman’s plan, a family of four making more than $37,000 a year would have to pay whatever insurers want to charge for coverage. But at $11,000 per year for a policy, the economics just don’t work. Not surprisingly, Richman’s plan didn’t get far in the just-finished legislative session.

This year Democrats in the state senate passed a far more radical plan. Senator Sheila Kuehl‘s bill would create a universal health care system in California similar to Canada’s. It would take health care out of the private insurance market and create a state insurance system. A recent state report shows the Kuehl plan could insure every Californian for eight billion dollars per year less than we pay now for a system that leaves seven million uninsured. That’s because insurers take 25 cents of every premium dollar for overhead and profit. Government overhead in Medicare is about two cents of every dollar.

It’s doubtful this bill will become law anytime soon. Most politicians will never bite the hands of the insurers that feed them campaign contributions. Even if government can do better.

So what can we do? As a start, why not give all Californians access to the same policies state politicians and employees have? The California Public Employees Retirement System (CALPERS) has a policy that bypasses insurers. Doctors and hospitals contract directly with the state — cutting out insurers’ hefty profits and making the plan more affordable. About 300,000 state employees past and present already belong to the government-insured plan. If all Californians could join, prices would be lower and benefits greater. Why not give every California patient and employer the same choice our politicians get — between publicly-insured and privately-controlled policies. Surely, insurance companies wouldn’t argue that choice is hazardous to your health.

Consumer Watchdog
Consumer Watchdog
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