Gov’s Plan Makes Early Retirement Unlikely, Raises Costs for Retirees

Santa Monica, CA — Governor Schwarzenegger will promote his health plan to a group of AARP members in Pasadena today in what amounts to false advertising, said the Foundation for Taxpayer and Consumer Rights (FTCR). The governor’s plan will actually make it more difficult for those 50 and over to retire or take the entrepreneurial plunge and will raise prices for all those under 65. Membership in AARP begins at age 50.

“Bragging to people 50-64 years old that Schwarzennegger’s health care plan will make health care more affordable and available is false advertising,” said Jerry Flanagan of FTCR. “Under the governor’s plan, those over 50 who are employed would face a greater likelihood that employer-provided coverage would be cancelled, because paying into a state fund would be cheaper than providing coverage. And for those who have retired early but are too young for Medicare, the governor’s plan does nothing to limit premium increases. Schwarzennegger’s plan makes it more likely that Californians will be forced to work until they’re 65, with or without insurance.”

In addition, said FTCR, Schwarzenegger’s unspecified calls for rollbacks of health care regulations could mean that the plans seniors are forced to buy may not cover such necessities as prescription drugs, even as insurers charge more for copays and raise deductibles.

Schwarzenegger’s plan would require all Californians to buy health insurance but would allow insurers to charge whatever they choose. The proposal’s failure to regulate health insurance rates coupled with provisions that allow insurers to charge higher premiums and deductibles based on an enrollee’s age is a recipe for unaffordability, said FTCR.

FTCR supports a measure, AB 1554, by Assemblyman Dave Jones, that would require health insurers to justify their rates and get approval for increases. A similar requirement on auto insurance companies under Proposition 103 has saved California driver’s at least $23 billion since 1988.

Click here for more information on Schwarzenegger’s health plan.

Click here to read a ballot measure FTCR is drafting on health care reform that includes oversight of what insurers can charge.

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