California's Christmas Gift to the Big Insurers

Christmas came one week early for California insurers Monday.

In a present gift wrapped by the California Assembly with Gov. Arnold Schwarzenegger playing Santa, Assembly members passed a bill mislabeled as healthcare reform that will guarantee not health care but millions of new customers for the insurance industry, with California taxpayers paying the bill.

Need more evidence. Look at the list of supporters. They include industry giants, Kaiser Permanente, Health Net, PacifiCare, Blue Shield, Cigna, and Molina Health Care -- all among the biggest and most profitable health plans in the state.

It's not hard to see why they are on board.

Under the new bill, insurers would gain millions of new customers who are either forced to buy insurance under threat of having their wages garnished or facing a lien on their property -- or signed up into private insurance plans through a public pool funded with taxpayer or employer funded subsidies.

The bill passed Monday -- the product of a backroom deal between Schwarzenegger and Assembly Speaker Fabian Nunez -- even eliminated a provision from an earlier draft that would have provided exemptions to the forced insurance for Californians whose costs would exceed 6.5 percent of their income. Now those people will still have the mandate to buy insurance, though they will be eligible for full or partial public subsidies.

It's a disgraceful day when we have our elected leaders shaking down patients and consumers to swell the profits of an industry that became incredibly rich off the pain and suffering of patients who are routinely denied care when they need it most.

Nothing in this plan changes those deplorable practices. Insurers will continue to be able to block care even when recommended by a physician when they brand it as "experimental" or "not medically necessary." They will continue to be able to reject diagnostic procedures and access to specialists.

And, they will continue to be permitted to charge whatever they want. There are absolutely no restrictions on skyrocketing premiums, deductibles, or co-pays. The inevitable result will be more Californians facing bankruptcy for medical debt when they are forced to buy junk insurance they can't afford or self-rationing care even while they continue to pay the premiums.

Proponents of the bill praise the model of a similar Massachusetts law on which the California bill is based. Well, here's what's happening in Massachusetts today. State officials has discovered that since they failed to place any limits on insurance industry price gouging, the state will not be able to continue to afford the subsidies. So they are going to have to reduce payments to doctors and hospitals or sharply increase out-of-pocket costs for patients. That's progress?

This is not health care reform. It's a hijacking of the yearning of the public for genuine overhaul of our health care system. It's Schwarzenegger as a reverse Robin Hood, picking the pockets of patients and the public coffers for the biggest insurers in the land. And it will not stand.

California's State Senate may yet put the brakes on this plan -- not even scheduled to go into effect for four more years.

If California lawmakers want to actually accomplish something today on health care, they should look elsewhere. Thousands of California children face the imminent cutoff of coverage due to the President's veto of the children's health program. Concurrently, with California facing a $14 billion and growing budget deficit, Schwarzenegger is talking about big across the board cuts, including significant reductions in existing health programs.

Let's address these immediate crises -- and then move to enact genuine, healthcare reform such as a single payer, improved Medicare for all approach embodied in HR 676 in Congress and SB 840 in California -- rather than handing out any more presents to a wealthy industry that hardly needs the help.

Comments

[January]

I don't know the details, but if I look to mandatory auto insurance, I find a mixed bag of social benefits.

Yes, insurers make a fat profit. Yes, insurers are taking the money and running in some cases. (Just paid my annual home owner's; cost down a smidge; benefits way, way down.)

So are we stuck with a selfish insurance industry? Ask the folks in the Big Easy. But don't bitch and moan as if you have the perfect solution. That's BS. We're in trouble and anything, anything, that makes it better for some is a worth it effort.

Do you have doubt we will eventually get to a system like Canada? I don't. So lets keep on pushing.

[ButterflyWeed]

So the Governator's plan calls for upping the tax on cigs $1.50 to $2 a pack, but leaves out the alcoholic beverage industry??

[avergejoe]

hmmm, isnt this hrc's plan as well.

[Spoons]

You should see the conversation going on at USA Today (largest circulation). I could use some back-up for fighting against the opposition.....http://www.usatoday.com/money/industries/health/2007-12-17-calif-health_N.htm

[Spoons]

Thank you Rose Ann. You are a saint and a gift to humanity.

[clr2]

Population has gone up by 20% - revenue by 29% and taxes by 33%. Why do we need more money? We need to look at the way we are spending now and make changes. We also need to look at who's getting the money. We spend BILLIONS on ILLEGAL ALIENS - we need to deport ILLEGAL ALIENS, heavily fine those who hire ILLEGALS, and return to the original intent of the 14th amendment and do away with anchor babies. We could save a lot of money.

[Merg]

Why isn't SB840 or a facsimile placed on the CA ballot through an initiative process intead of trying to get it past the Governator?

[jlohman]

Follow the money! The campaign funds from the insurance industry is buying this legislation.

And this is the state that voted down public funding of campaigns?

You get what you pay for.

[realitytrumpsbull]

I read that California is officially broke.
Recall Schwarzenegger, have CA's books externally audited and the findings publicly
revealed in front of Congress. If they can't
balance their budget with that much property
and sales tax, then something crooked is going
on and needs to be dealt with.

[mmogu77]

Thanks, Rose Ann, for your post on the Schwarzenneger/Nunez "Rube Goldberg" health "reform" fraud which was brilliant as always. I was going to add to the "Why Not Single Payer?" series on Huffpo by commenting on this gift to the insurance companies, but you've said it better than I could.
If the people of California are going to get to vote on health care reform, it should be on Sheila Kuhl's SB 840, which would have set up a non-profit single payer health care system in California, which was passed by both houses of the legislature and terminated by our Governator's veto pen.
If the State Senate doesn't block it, this phony health care reform is likely to go down in flames before the voters in November and set back the cause of real Universal Healthcare in California and nationally.
Keep up the good work in keeping the labor movement honest both in California and on the AFL-CIO board.
Miles Mogulescu

[peonyharp]

Throw da bums out!!

Not-for-profit health care is the only way to go
(and I agree, let's get S-CHIP passed immediately. How can we turn our backs on our children and their medical needs? Yes, that's right: I said, "OUR children.")

Only one candidate has the courage to address health care as a right, and not a privilege dependent on whether one can afford it.

Kucinich '08

[Merlin7]

Anyone who voted Republican in the last elections deserves this blatant rip-off. The rest of us don't.

What next -- confiscating a percentage of worker paychecks for mandatory investment in a private fund run by some crony of the White House? Wait, forget I said that. I don't want to give the Rethugs any ideas.

[Desiderata]

Wait__wasn't that Massachusettes mandatory healthcare once called by it's father, Romney, "the Massachusette's Miricle"?

No wonder Romney barely mentions this in his Presidential campaign.