The Governator's Health Insurance Proposal

When (now Governator) Schwarzenegger was campaigning for governor of California, he criticized his opponent's plan to tax businesses to pay for a health care proposal, calling it a "job killing tax." Now, Governor Schwarzenegger is proposing an almost identical plan as he previously criticized.

California's health insurance landscape does have 3 major problems:

1) sick self-employed people can't get private health insurance,
2) poor people frequently cannot afford it, and
3) others who can afford health insurance often forgo it, sometimes with disastrous results.

Add to this two related problems:

4) some businesses are leaving California due to an unfriendly business regulatory/tax climate,
5) California is gushing red ink, spending way more than it brings in.

The governator and California House Speaker Nunuz are pushing a proposal that will require businesses to offer all employees health insurance, and force some to pay a tax to fund health care for non-working Californians.

While this approach addresses problems 1, 2, and 3, it exacerbates 4 and 5.

Rich societies can afford certain extravagances, but it seems to me that even if you want generous social programs, you still need vibrant business activity to generate the wealth that ultimately pays for it. I'm afraid that Schwarzenneger's plan may curb wealth creation (at least in California), without solving all of the underlying issues.

As an alternative, I propose the following 3 point road map for health care reform in California:

1) Perhaps the most pernicious attribute of our current system is that sick self-employed people can't get private health insurance. Many states have a "high risk pool" for sick applicants, and California is one of them. This program is not often mentioned in debates about the future of California's health care system, but it should be. The program works, but the premiums are often expensive, and I've heard there is a waiting list. Point 1 of my three point road map is to expand this plan, with financial assistance for those too poor to afford the normal premiums. There will be some cost, but it will be far, far lower than the state purchasing health care for all non-employed people in the state.

2) Poor people can't afford insurance. Poor people are already eligible for Medical (California's name for Medicaid.) As medical insurance costs rise, it may be prudent to expand access to Medicaid. Also, to reduce costs, consider allowing 'vouchers' to the poor so they can purchase the same private insurance the rest of us enjoy. This may save costs, and it keeps the Medical bureaucracy from dominating the medical landcscape. Expanding access to Medical also has some costs, but at least the expenditures are limited to those who need it: the poor.

3) As for those who can afford insurance, but prefer to risk not having it: make them. Health insurance is at least as important as car insurance, but only the latter is required. Make health insurance mandatory. This rule, along with better access for the sick and the poor, will plug most of the existing holes in the system, without busting the state budget.

This approach may not be perfect, but at least it doesn't drive more businesses from the state. In fragile economic times, a tax increase should be a last resort, not a first resort.

Sincerely,
Corkie the Dog