Schwarzenegger Health Care Veto Announcement Is Laden With Insurance Industry/HMO Scare Tactics, Group Says;

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His Announcement Comes as He Reaches the $100 Million mark in Campaign Donations, Aided by a Burst of Health Industry Donations

Santa Monica, CA — Gov. Arnold Schwarzenegger‘s message today announcing he would veto universal health care for California reads like a health insurer’s advertising dream, full of catch phrases that twist the truth in order to frighten consumers, said the Foundation for Taxpayer and Consumer Rights (FTCR). FTCR also noted that the health industry boosted Schwarzenegger to nearly $100 million in campaign donations with a $125,000 burst of contributions in August alone. The industry has given him $4 million overall.

“Schwarzenegger’s announcement shows he has listened to the big donors who have put millions into his campaign coffers, not to the people worried about health care costs and the rising number of uninsured workers,” said Jerry Flanagan, health policy director of the nonprofit, nonpartisan FTCR. “His statement is full of insurance industry slogans, half-truths and scare tactics.”

FTCR analyzed Schwarzenegger’s broad mischaracterizations issued today of SB 840, sponsored by Sen. Sheila Kuehl, and answers them below.

Arnold Schwarzenegger (AS): Socialized medicine is not the solution to our state’s health care problems.

FTCR: SB 840 is not socialized medicine.  Doctors and hospitals would remain private. SB 840 would, however, remove wasteful insurance companies from the health care system and replace them with a non-profit, publicly accountable insurance pool.  

AS: Such a program would cost the state billions and lead to significant new taxes on individuals and businesses, without solving the critical issue of affordability.  I won’t jeopardize the economy of our state for such a purpose.

FTCR: SB 840 would save Californians $8 billion off what the state is currently spending and use this to provide coverage for the 7 million Californians without health care.  The new public insurance pool would actually decrease overall health spending by utilizing the 25% of revenue currently wasted on CEO salaries, record corporate profits, overhead and advertising by private insurers to provide better health care for all Californians. Individuals and employers would pay one lower rate for comprehensive care.

AS:  It uses the same one-sided approach tried in SB 2, the employer-mandated coverage measure signed into law before I became governor.  I opposed SB 2 because it placed nearly the entire burden on employers, and voters repealed it in 2004.

FTCR: SB 2 required employers to buy health insurance from for-profit insurance companies without any oversight of their rates.  SB 840 provides affordability protection by removing insurer waste, by purchasing prescription drugs in bulk and by focusing on disease prevention.

AS: I want to see a new paradigm that addresses affordability, shared responsibility and the promotion of healthy living.

FTCR: Governor Schwarzenegger means, by “shared responsibility,” a plan that would shift more burden, not less, to individuals, requiring them to buy health care from the for-profit insurance market or face liens against their taxes and their property. “Shared,” in this case, is likely to mean that patients pay more and have fewer protections against insurance company gouging.

AS:  Single payer, government-run health care… would reduce a person’s ability to choose his or her own physician, make people wait longer for treatment and raise the cost of that treatment.

FTCR: Under SB 840 Californians would have better choices of private doctors and private hospitals and would not have to wait for profit-focused insurance gatekeepers to “approve” care — as happens now even in the case of life-threatening disease. 

AS: With my partners in the Legislature, I look forward in 2007 to working to develop a comprehensive and systemic approach to health care that not only provides affordable medical treatment to people when they are ill, but that strives to make sure people don’t get sick in the first place.

FTCR: Schwarzenegger, three years after his election, has yet to give any specifics, even an outline, of what he wants to see in health care reform. He has told voters they’ll have to wait until he’s reelected to hear about it. The health care industry’s $4 million in donations to Schwarzenegger and his causes is intended to prevent any reform that would diminish record profits.

AS: As part of this comprehensive approach, my administration already has worked hard on the fight against obesity, a leading cause of disease in this country. I signed the landmark Healthy Schools Now Act, which bans junk food and sugar-laden drinks in public schools.  Our budget also included $18 million to replace that junk food with fresh fruits and vegetables so we can start promoting healthy living choices for our youngsters.

FTCR: This is a fragment, with no comprehensive plan in sight.  If Schwarzenegger is so worried about obesity, what about the fat and waste in the private health care industry?

AS: And on the question of affordability, I reached agreement with the Legislature to provide discounts on prescription drugs of up to 60 percent for our neediest citizens.

FTCR: The prescription drug plan, negotiated in the final days of the legislative session, mocks real reform. It allows drug companies to offset any discounts for the poor with higher prices for those not eligible for the discounts — a wide majority of Californians. If this is how Schwarzenegger defines affordability, the middle class has much to fear.

AS: I convened a California Health Care Summit in July that for the first time brought together experts on all sides of this issue.  At the table with us were representatives from academia, government, business, health care and labor.

FTCR: The health care summit was an election year stunt dominated by the very people who are responsible for bankrupting health care: the insurance companies and HMOs.

AS: Affordability is the key to making our system work for everyone, and affordability is exactly what we are dedicating ourselves to.

FTCR: Affordability can only be achieved by eliminating the health care industry’s duplication, bloat and record profits. Schwarzenegger has yet to indicate that he is willing to do anything that would offend the people helping to bankroll his campaign.

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The Foundation for Taxpayer and Consumer Rights (FTCR) is California’s leading non-profit consumerwatchdog.  For more information, visit us on-line 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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