« October 2007 | Main | January 2008 »

November 11, 2007

Linking health plan to economy

SACRAMENTO -- Confronting the latest challenge to his effort to reshape California's healthcare system, Gov. Arnold Schwarzenegger argued Friday that the state's rapidly deteriorating financial outlook is extra impetus for action, not reason for pause.

"Some have said we shouldn't tackle healthcare reform with this year's shortfall," Schwarzenegger told a gathering of Latino healthcare advocates in Los Angeles. "I happen to totally disagree with that.

There is a real correlation between fixing the healthcare system and fixing our budget."Schwarzenegger's assertion that his plan to insure all Californians would help the economy -- and therefore the state's finances -- was questioned by leading legislators from both parties and by some independent analysts.

"If everything turns out in the governor's favor, that's one scenario," said Shawn Martin, who directs the health department of the nonpartisan Legislative Analyst's Office.

The analyst's office issued a report last month saying the state could end up with as much as $3.2 billion in additional costs if some of Schwarzenegger's assumptions don't pan out.

"If everything went wrong here, it would create, I think, more of a budget problem, but there's no way of knowing," Martin said.

The $14-billion healthcare plan the Republican governor favors would be built on new employer and hospital taxes, extra money from the federal government, selling off management of the state lottery, and requiring that all Californians obtain insurance. Schwarzenegger says the plan would pay for itself.

But even if the governor's proposal is enacted, it will not kick in until 2010, two years too late to affect the state's upcoming fiscal year, when officials anticipate a $10-billion shortfall.

The Assembly Republican leader, Mike Villines of Clovis, said the state's fiscal troubles require retrenchment, not ambitious new program.

Live in California? Click here for your free health insurance quote today!

Posted by healthinsurance at 05:54 PM | Comments (0)

November 03, 2007

Governor's Health Plan Hides the True Cost of a Mandatory Purchase Requirement, Testimony Shows

California Health and Human Services Agency Secretary Kim Belshe indicated in legislative committee today that the financial estimate of the Governor's plan to require all Californians to buy private insurance policies does not consider the impact of double digit insurance company premium increases. The proposal does not add up to affordability, said the Foundation for Taxpayer and Consumer Rights.

In response to questions from Assemblyman Dave Jones (D-Sacramento), Belshe argued that costs would somehow be contained, yet the $14 billion estimate of the plan's cost appears to be based on annual medical inflation--doctor and hospital rates--which range from 4% to 6%. This does not take into account that insurance premiums have increased two to five times faster than medical inflation. Dramatic insurer premium increases of the last several years are due to huge profit increases, vast cash reserves and administrative waste, said FTCR.

"Californians deserve an honest debate of how much health care will cost under the governor's plan to require them to buy private insurance policies," said Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights (FTCR). "The bottom line is that governor's plan does not add up. Health care will never be affordable for patients, the system, or the state's taxpayers when insurers are allowed to charge whatever they choose."

Massachusetts passed a similar law requiring residents to buy private health insurance last year. That program, which goes into effect in January, has already experienced cost increases far beyond what was promised by policymakers when the bill was passed.

In response, Massachusetts Senate President Therese Murray (D-Plymouth) has proposed a plan to require health insurance to justify rate increases in excess of 7%. She also said that the state's insurers should spend down their $2 billion in excess reserves to keep premiums affordable.

Click here for your free California health insurance quote now!

Posted by healthinsurance at 07:58 PM | Comments (0)