Consumers & Business Owners Oppose Legislation Forcing Patients to Buy Health Insurance – Plan Would Not Limit What Insurers Can Charge

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State Bill Would Make Uninsured and Underinsured Patients Criminals

San Diego, CA — Patients, business owners and consumer advocates launched a statewide campaign today opposing new state legislation that would require all Californians to buy health insurance or face liens on their state income taxes. Over the coming weeks, the group will travel throughout the state to warn the public about the proposal.

“At a time when average working families are struggling with the high cost of health care, it is absurd to even contemplate making it a crime to be uninsured,” said Jerry Flanagan of the nonpartisan Foundation for Taxpayer and Consumer Rights. “The real criminals are the insurance and drug industries whose profits are bankrupting the health care system.”

The legislation, AB 1670 by Assembly Members Nation and Richman, would force all Californians whose annual income is above 200% of the Federal Poverty Level ($17,960 for a single person and $36,800 for a family of four) to pay full price for coverage.

San Diego is facing huge health care cost increases and growing numbers of uninsured and underinsured patients:

– 1 in 5 San Diego patients are uninsured and thousands more are underinsured as a result of double-digit annual health care cost increases;
– Health insurance premiums are increasing at a rate of 15-25% and more for many consumers and small business owners;
– Health insurance overhead costs — including advertising, administration, executive salaries, surplus and profit — have become the fastest growing component of health care spending;
– Prescription drug company profits are 4 to 5 greater than the Fortune 500 average.

FTCR called on state lawmakers to make health care affordable instead of forcing patients to subsidize health insurance overhead costs and drug company profits.

Paul Confrancesco, a San Diego business-owner, has seen his health insurance premiums double during the last four years though he has never required medical care or hospitalization.

Confrancesco, who owns Mobile Computing, a computer consulting business, has considered expanding his business and hiring employees, a move that would be hampered by the high price of health insurance.

Confrancesco, who is enrolled in a Blue Cross of California preferred provider plan (PPO), was appalled by Governor Schwarzenegger’s recent approval of a merger between Blue Cross‘ parent company, WellPoint, and Anthem which provided $265 million in bonuses to top company executives.

“If I got the same multi-million dollar bonus that Blue Cross executives received, I could afford my health insurance,” said Paul Confrancesco. “A key reason that California is so expensive to do business in is that drug companies and insurance companies are lining their pockets at our expense – and I’m tired of it.”

Governor Schwarzenegger supported the concept of requiring individuals to buy health care in a speech last October: “We have to really address this once and for all, and figure out a way to do it, like with car insurance, where we make it law that people carry insurance and that they are really insured.”

However, unlike the auto insurance market where the voter-approved Proposition 103 guarantees affordability by requiring insurers to get approval for rate increases from the elected Insurance Commissioner, AB 1670 fails to provide any such protections.

Sharon and Barry Fowler, San Diego small business owners, are calling on state policy makers and Governor Schwarzenegger to provide prescription drug bulk purchasing and health insurance rate regulation, two policies that would dramatically lower the cost of health care.

“Its absurd that lawmakers would require working parents to pay for health insurance they cannot afford,” said Sharon Fowler. “As a former business owner I know that what people really need is health insurance rate regulation.”

As Barry points out, the Canadian government and the U.S. Department of Veterans Affairs already negotiate 30-60% bulk prescription drug discounts. Under pressure from the pharmaceutical industry, President Bush and Congress specifically banned bulk purchasing in the nation’s Medicare program, resulting in higher costs for U.S. Seniors.

“The pharmaceutical companies will sell in bulk to other countries,” Barry notes. “The drugs are made in America, but sold around the world. You can walk into a drug store in France, Greece, or most any other country, and get these drugs at a reasonable price. But not here.”

Model cost control laws, including prescription drug bulk purchasing and health insurance rate regulation, that could lead to universal access to health care are available at:

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The Foundation for Taxpayer and Consumer is the state’s leading consumer watchdog organization.

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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