California Senate Stops Mandatory Health Insurance Plan

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Statement of FTCR President Jamie Court

This afternoon the California Senate Health Committee stopped the mandatory private health insurance plan backed by Governor Schwarzenegger and Assembly Speaker Fabian Nunez. The legislation failed to limit how much policyholders would have to pay or define the benefits they would receive.

Forcing people to buy an insurance product they cannot afford or rely upon is not health care reform. The question is: what comes next?

At a marathon hearing last week, Speaker Nunez lashed out at FTCR’s staff for showing senators the legislation’s fatal flaws. This morning we responded to the criticism that anything is better than nothing in the Sacramento Bee.

As we noted, “If anything is better than nothing, why not simply remove from the legislation the most controversial and draconian provision: requiring all Californians to show proof that they have a private health insurance policy?”

The legislature should immediately address the need for universal children’s health coverage, fairness in the insurance market, and subsidies for uninsured patients.

A poll commissioned by our sister group the Campaign for Consumer Rights showed that mandatory health insurance was a big loser with voters once voters were told they might have to pay. By contrast, reining in insurers and subsidizing care for the poor had popular support.

The marriage of convenience between the medical-insurance complex and politicians seeking more time in office via Prop 93 failed to address the single most needed health reform: cost-controls on an out-of-control industry. This issue must be addressed in any genuine systemic overhaul.

If the legislative debate ends today, voters can still have the last word on health care reform, as they would have on the Governor and Speaker’s proposal.

Three possible paths to reform via ballot measure exist:

  • The first option is that insurance premium regulation and sensible rules for the market can be coupled with reforms legitimized in this year’s debate, such as requiring insurers to sell to all patients regardless of pre-existing conditions. FTCR has a draft of this ballot measure. It includes opening up government officials’ coverage to all Californians through an existing public payer that bypasses insurers. This provision had 81% support in the recent poll.
  • Second, single payer advocates are considering another run at California voters. They would have to modify their proposal to make it more politically palatable but a recent poll already shows majority support in California for the notion.
  • Third, a middle way proposal between single payer and the status quo could develop into a ballot measure. This would be a public utility type model that closely regulates the cost of all private health care providers in order to make health care affordable and available to all. This option would include subsidies for those who cannot afford coverage to buy it, such as exists with lifeline telephone and electricity service.

We are prepared to make our case to voters about the right way to reform the health care system: reducing waste, fraud and greed in order to give care to everyone. With your continuing support, we will prevail.

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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