“Mandatory Purchase” Health Insurance Proposed by Governor Schwarzenegger and Senator Clinton Would Force 13 Million Californians to Buy Unaffordable Coverage

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Santa Monica, CA — A new report released today shows that California has the nation’s fourth highest percentage of residents without health insurance for some point of 2006 — 13 million people — because they could not afford coverage. This is further proof that Governor Schwarzenegger and Senator Clinton’s proposal to require all Californians to buy insurance is not the solution to the health care crisis, according to the Foundation for Taxpayer and Consumer Rights (FTCR).

Click here to download the report.

Under the Governor’s plan, all Californians would be required to buy insurance policies — or face tax penalties — without any limits on what insurers can charge. Those earning less than 250% of the federal poverty level, $51,625 for a family of four, would receive taxpayer-subsidies to pay for coverage. Senator Clinton announced a similar plan this week and California Assembly Speaker Fabian Núñez is very close to embracing Governor Schwarzenegger’s plan of government-imposed health insurance without government-regulated premiums.

“Requiring Californians to buy insurance they can’t afford is not the solution to the health care crisis. The report shows that the uninsured don’t choose not to have insurance but that they move in and out of coverage because they can’t afford it,” said Jerry Flanagan of FTCR. “Taxpayer subsidies will do little more than line insurers’ pockets with no promise of public return and no accountability over the product they sell or the price they charge.”

Extreme consolidation has given a handful of insurers a strangle hold over pricing, allowing them to raise rates to boost profits. Insurance premiums have increased 78% since 2001 compared to a 19% increase in wages and a 17% increase in inflation.

According to the Families USA report released today:

– 40.5% of Californians under the age of 65 did not have health insurance at some point during 2006.

– 34.7% of Americans (89 million people) under the age of 65 did not have health insurance at some point during 2006.

– 79.3% of people who went without health insurance at some point in 2006 were from working families.

Senator Clinton and Governor Schwarzenegger have said that like auto insurance, all Californians should be required to buy health insurance. However the governor and senator have refused to support regulation of insurance rates required of auto insurers under Prop 103. Since 1988, Prop 103 has saved California drivers $23 billion in premiums. Click here for more information on Prop 103.

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FTCR is California’s leading public interest watchdog. For more information, visit us on the web at:

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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