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January 23, 2008

California health care in critical condition

Sen. Sheila Kuehl (D-Santa Monica) stopped by the Los Angeles Times this week to discuss health care reform. Kuehl will hold a hearing today on the Nunez-Perata health care bill, which is supported by Gov. Schwarzenegger. The Assembly has already passed the bill. If Senate also approves it, an initiative providing funding for the new system will be put on an upcoming ballot for voter approval. Kuehl spoke about her skepticism of the bill and support for a single-payer system.

Sheila Kuehl: The bill has an individual mandate; every Californian would be required to buy health insurance. The minimum creditable coverage would be established by the Medical Risk Management Insurance Board, fondly known as MRMIB... MRMIB exists today. They essentially are tasked currently with finding insurance for un-insurable people. They have a waiting list that would go around this building, because they can't find sufficient insurance. But that's their job.

Eryn Brown: When I was reading over this a few months ago it seemed as if they didn't have jurisdiction over all the plans, that it was only some. So if they're determining minimum coverage would that be for all people in California or just for people in certain pools?

Sheila Kuehl: That's a good question. They are not allowed to say that employers have to buy certain plans. However, you would not satisfy the mandate unless you bought a plan that was the minimum creditable coverage. I think what they're trying to do — I mean, this give Rube Goldberg a new name for simplicity. It's much more complicated than any Rube Goldbergian machine that used to appear in this paper many many years ago. So they might offer plans that don't meet the minimum creditable coverage, but if you bought them you wouldn't have satisfied your mandate. So it's quite confusing.

Eryn Brown: "They" would be the insurance industry?

Sheila Kuehl: Correct. The thought being that young men who won't get pregnant and think they're going to live forever don't want to buy all these things because policies are mandated to cover pregnancy; they're mandated to cover diabetes, etc. Minimum creditable coverage would include all of those mandates in the state. Theoretically no policy can be offered in the state now that doesn't include all those items. So you would be required to buy an insurance policy. Employers would be required to spend a certain percentage of their payroll on insurance. And there are a certain number of things they can deduct from their percentage if they contribute to the employees' health, things like gym memberships. That is a real loophole, in my opinion... What we found when we studied workers comp in California is that some employers categorized some employees as independent contractors. Independent contractors don't count toward your payroll. It potentially is a way that employers could reduce their burden, by increasing the number of employees they categorize as independent contractors. Some of that happened with workers comp, but this is a big bite for employers. They might say, "I can't do this. You're an independent contractor now."

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Posted by healthinsurance at January 23, 2008 10:01 PM