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California’s Good Medicine for Health Care?


The political clash of reform plans for health care insurance coverage in California, hardly affordable and available, is not resolved. When it will be is unclear. Much hangs in the balance.

Gov. Arnold Schwarzenegger called a special session of the Legislature to deal with this problem recently. Under the governor’s $14 billion proposal of "shared responsibility" which remains alive and revised from his January proposal, all state residents would have to buy health care insurance. Californians could obtain insurance through work. Or they could purchase coverage on the market. Annual income under $25,525 for individuals and $51,625 for families would qualify them for taxpayer-subsidized programs. His plan would also give a tax credit to Californians disqualified from subsidies but who pay more than five percent of their annual income for health insurance, according to the Kaiser Daily Health Policy Report.

Further, the governor proposes to fund health care reform by leasing the state lottery, which is owned publicly, to a private company for $2 billion annually, an idea from Kathleen Brown of Goldman Sachs, according to a recent NY Times article. She is the daughter and sister of previous California governors, herself an unsuccessful Democratic gubernatorial candidate. The Legislature on Sept. 10 approved Assembly Bill 8, a "comprehensive health care bill making health care more accessible and affordable," said a press statement from Fabian Núñez, the Assembly speaker. AB 8, the health care reform plan of Nunez and Don Perata, the Senate leader, does not require all residents to buy health care insurance. AB 8 requires employers to pay for health care coverage in one of two ways. They would pay up to 7.5 percent of their payroll to fund employer-based health care coverage. Or employers would contribute to a state fund that covers residents who lack insurance through work. The governor disagreed with the payment requirement for employers under AB 8 and vetoed it.

Despite the differences between his health care reform and AB 8, both have a striking similarity in approaches. Briefly, both proposed reforms play ball with a big special interest that also contributes to the same politicians. I mean the private health care industry, of which the insurance companies play a big role. These multiple insurers collect premiums and use them to pay for policyholders’ health care. What the companies don’t spend for providing medical care is profit. This is why health care insurance availability and affordability is a mounting problem. So the governor and leading Democrats keeping the companies causing the health care crisis in the game makes equality of health care illusory. There is a sane solution to what ails the health care system. Consider the reform proposal of state Senator Sheila Kuehl (D-Santa Monica). She is the sponsor of Senate Bill 840, the California Health Insurance Reliability Act. It is also called single-payer health care. The state government would, minus the profit motive, become the middleman, replacing the many insurance firms handling that now. Public opinion polls and surveys show overwhelmingly that a majority of citizens favor such a simplified and less costly approach to medical care.

Let us begin with an assumption the governor, state Republicans and most Democrats share. The prices of private medical insurance-premiums, co-payments, deductibles and drugs-are sprinting past the budgets of working people.

In the meantime, health care insurance is outstripping the budgets of employers, especially the smaller ones, local mom-and-pop merchants. Due to rising insurance prices, employers are offering less and more costly health care coverage to a shrinking share of employees. The insurers raising their prices which are pushing employers away are well aware of this trend. I have more to say on the decline of employment-based health insurance in a bit.

What’s driving up the prices of health care insurance? Logic tells us that the driving force can’t be the cost of equal health care for all Californians. Roughly one of every five residents in the state lacks health care.

In short, single payer solves the problem of health care inequality caused by its being a corporate asset. To wit, managers of corporations have a legal responsibility to shareholders that puts their needs for profits above what patients need. That is the law for corporations. Managers who violate the legal rights of shareholders are lawbreakers.

Thus health care reform proposals such as the governor’s and AB 8 that accept multiple insurance companies continuing to pay medical providers such as doctors and hospitals is flawed. That is, of course, if the aim is to achieve equality of medical care. Otherwise, full or partial universalizing of private health insurance guarantees inequality for reasons of lopsided income and wealth among and between Californians.

The governor vetoed SB 840 after the Democratic-controlled Legislature approved the bill in September 2006. Meanwhile thousands of Sacramento County employees were walking off their jobs in part to protest surging health care costs. This stress and strain is likewise hanging over the heads of Americans nationwide, some 47 million without it, or roughly every sixth person across the U.S. And AB 8 would retain the payment system of multiple insurers paying medical providers, and eliminate competition with SB 840.

Speaking of government intervention into the marketplace, the governor claims to back market competition. But he is driving it away by guaranteeing millions of new policies to private insurers through his mandatory coverage policy. In fact, his proposal marries giant corporate structures to the huge state government bureaucracy. To speak of market-based solutions as the governor does when the vast bulk of participants are dwarfed by such large forces is political theatre.

The motive for the reform policy proposals of the governor and AB 8 is simple and well understood by the business press. "Government business has become increasingly important for health insurers as growth in employer-sponsored accounts has slowed," reported the Dow Jones Newswires recently. Against that backdrop, single payer began to fade from the media radar screen at the Capitol this July. The demise of SB 840 helped to pave the way for the rise of AB 8 and the governor’s reform proposal.

Recall SB 840′s day in the media sun came about in part from the energy of the California Nurses Association/National Nurses Organizing Committee. The labor union turned out its female-majority members to the debut of Michael Moore’s film Sicko in Sacramento’s Crest Theatre this spring after he gave testimony to the Legislature. At the Capitol, he spoke to leaders about several flaws of the current health care system. Arguably, the most harmful one is the human suffering caused by insurance firms that profit by delaying and denying over-priced medical care to policyholders.

The CNA/NNOC backs SB 840 as the only real alternative to the business-as-usual role in health care reform. This stance reveals a difference of political strategies within the labor union movement. Though the CNA/NNOC joined the AFL-CIO this March, the AFL-CIO’s California Labor Federation supports AB 8 as a less costly alternative for working-class residents versus the governor’s reform. To this end, the CLF led vigils for AB 8 at the state Capitol.

Under single-payer health care in California, there would be, basically, an expansion of what exists now under Medicare, the federal program for people age 65 and older. There’s no profit motive in the delivery of health care under this single-payer system. Consequently, the cost to administer Medicare is a small fraction versus that of private health insurers. Do not be scared. Medicare is not socialized medicine. It is, however, the single payer for private medical providers: chiropractic, dental, emergency services, hospital, home health, infant maternal and long-term care, mental health, outpatient services, physical therapy, prescription drugs, primary and preventive care, rehabilitation (extending to substance abuse), surgical and vision care. Congressman John Conyers’ HR 676 bill, the Expanded and Improved Medicare for All act, which has 85 co-sponsors, would extend Medicare to all U.S. citizens. The Oregon AFL-CIO has become the 25th state AFL-CIO federation endorsing HR 676.

"HR 676 would get rid of the insurance industry and would save enough money to cover everyone in the United States with no co-payments, no deductibles, and no premiums," said Congressman Dennis Kucinich (D-OH) in a press statement recently. The basis for his claim is an Oct. 15 report on Medicare’s Part D drug program by the Oversight and Government Reform Committee in Congress.

Under the current multiple-payer system, many insurance companies finance medical care coverage for a profit. With multiple insurance payers, U.S. citizens pay twice what their counterparts in developed nations pay for health care and have shorter life expectancies, according to data from the Organisation for Economic Co-operation and Development.

Single payer picks up where the reform plans of the governor and Democrats ends by turning off the cash tap for the multiple-payer system, a gold mine for the many insurers, which grab profits from postponing and refusing medical payment. Also, the insurers’ profits find their way as campaign donations to elected officials. And the alleged free news media gets a tidy share of the insurers’ profits in the form of ad revenue, in free-fall from the housing bust. Just ask Greg Pruitt, The McClatchy Co.’s chairman and chief executive.

Adoption of single-payer health care in California would end the state’s health care crisis and lead the way by humane example for the rest of the country. Health care should be a birthright for all Californians and Americans. Of course that would be a major change to the corporate-government status quo. However, the vast majority of the populace would see a dramatic and drastic improvement in their lives. They want that now, as polling and surveying by reputable firms shows the public in robust favor of such a simple system in contrast to the nightmarish one currently.

SB 840 will be moving forward at the Capitol in January 2008, said Sara Rogers, a consultant to Sen. Kuehl. At the same time, grassroots support is growing for a California constitutional ballot initiative in which voters can decide the fate of a single payer health care plan in November 2008.

"The California Health Security Plan would be free-no co-pays, no deductibles, no premiums-and would provide quality health care to all Californians," said Jim Smith in a press release. "The Initiative has been submitted to the California Attorney General for a title, summary and issuance of petitions to put it on the ballot. We expect to have the petitions this November."

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Seth Sandronsky lives and writes in Sacramento

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