EDITORIAL The good news — and it’s very good news indeed — is that the governor of California has followed the lead of the city of San Francisco and is talking seriously about a universal health care plan. This is the first time since the early days of the Clinton administration — before the insurance companies destroyed even a modest hope of national reform — that we can sense real momentum toward the creation of a new policy to address one of the most pressing issues in the country.
But let’s be clear: the governor’s proposal falls far short of real reform. It has a few attractive features, but overall it’s underfunded, at points dysfunctional — and ducks the most basic problems with the state’s health insurance system.
Like Bill Clinton, Arnold Schwarzenegger starts with a failed premise — that private insurance, linked to employment, can somehow solve the problem. The evidence against that is so clear it’s frustrating even to have to make the argument. Private health insurance is expensive and inefficient; the amount of money that’s wasted on overhead and profits is staggering (as much as 30 cents out of every health care dollar never makes it to any hospital or clinic). The incentive to bilk consumers, avoid covering the sickest of patients, and reward suffering is disgracefully high. The fact that the United States is the only Western industrialized country without a functioning national health care program is a direct result of the fact that private insurers run the show.
Employer-based health insurance is a failed system too, an amalgam that grew out of the federal government’s failure to recognize the need for a national health system in the postwar era and the demands of unionized workers for better benefits. Workplaces offer insurance companies what they want — large pools of people among whom to share the risk. But linking insurance to employment is obviously a bad idea at a time when more and more people are working part-time jobs, contract jobs, or a series of different jobs for different companies — and when small businesses (which create most of the jobs in the country) are getting hammered by double-digit annual increases in health insurance premiums.
So any plan that accepts the private-sector hegemony over health insurance is doomed to fail in the long term.
The Schwarzenegger plan has another dangerous component: the proposal would require everyone in the state to buy health insurance (at the risk of criminal penalties for noncompliance). That, of course, is an insurance industry dream — it makes the entire population a captive customer base. And while the governor promises to offer lower-cost plans and subsidies for the poor, there’s nowhere near enough money in his proposal to make private insurance affordable to all. Low-income people would be driven to buy high-deductible plans, which undermine the entire idea of universal health care. And middle-class people who don’t have employer-based plans may be devastated: in San Francisco, for example, a family of four living on $60,000 a year would have to put as much as $10,000 of that into health insurance or risk steep fines.
The overall financing is shaky — the governor is counting on federal funding to help put an additional 630,000 people on the Medi-Cal rolls, but Congress has a long list of spending priorities, and there’s no guarantee this one will make the final cut.
There are things to like about the plan, particularly the goal of covering all children in the state, including the kids of undocumented immigrants. And the very fact that the ambitious governor of the nation’s largest state is willing to stake so much on health care reform is encouraging.
But the legislature is under no obligation to start the discussion with the governor’s plan. There’s already an excellent bill out there: SB 840, by Sen. Sheila Kuehl (D–Santa Monica). Her suggestion: get the insurance industry out of the game altogether and create a statewide fund, with premiums paid by employers and individuals, that would cover all Californians. It would save businesses in the state a fortune (and thus give the economy a jolt), cut down on waste and fraud, allow people to move from job to job without fear of losing health care, and give the government a strong incentive to push for lower drug costs.
That’s where the debate ought to begin. *