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Fighting for Real Healthcare Reform
February 05, 2008
by Leland Y. Yee
I joined California nurses, school employees, senior groups and a number of labor unions last week in opposing the governor's flawed health-care bill, Assembly Bill X1 1. While the bill was touted as a fix to our broken health-care system, after extensive study by the Senate Health Committee and the nonpartisan Legislative Analyst's Office, it is now clear that this proposal was bad for consumers and unfairly favored insurance companies.
This bill was not a step in the right direction, but a huge jump backward for working families who lack health care. As a co-author of the true universal health care bill, Senate Bill 840, I opposed AB X1 1 because it would have required consumers to buy their policies regardless of the cost. Under AB X1 1, all Californians would have been required to buy insurance with no caps on premiums, no regulation of the costs of insurance or medical expenses, no maximum deductibles, and no clearly defined minimum coverage.
In addition, the bill would have provided incentives for employers who now provide benefits to cancel coverage in order to pay cheaper premiums or shift more costs to workers.
Much of the funding was also tied to an increase in the tobacco tax, which I support. However, due to the success of our anti-smoking programs, the funding would be undermined and the revenue stream would continue to decline while the cost of insurance would undoubtedly rise, with shortfalls falling on the backs of working families. The bill also naively counted on increased funding from the federal government - at a time when the Bush administration is cutting children's health-care coverage. California sends significantly more revenue to Washington than we get back in federal funding and services.
The most objectionable part of this proposal was that if an individual did not purchase insurance within 62 days of the enactment of this flawed legislation, then the Franchise Tax Board would have been authorized to collect premiums by garnishment of wages or mortgage liens on the property of working Californians.
This is simply unethical and an unacceptable way to treat California workers. That is why the California Nurses Association, California School Employees Association, Congress of California Seniors, California Alliance for Retired Americans, Gray Panthers, Senior Action Network, United Food and Commercial Workers, Communication Workers of America, League of Women Voters, and the Teamsters, among many stakeholders, opposed the bill.
Last week, the nonpartisan legislative analyst also concluded that the program presents billions of dollars in risk to California taxpayers while the state is struggling to close a $14.9 billion budget deficit.
An analysis by Professor Jonathan Gruber of the Massachusetts Institute of Technology and the National Bureau of Economic Research shows that due to the struggling economy, the governor's health-care plan could result in an even more significant hit to the state budget and increase the number of uninsured.
According to the Gruber study, "[F]or every 100 people losing their jobs, the number of people uninsured grows by 85." Under AB X1 1, this scenario would force even more Californians to spend thousands of dollars a year for insurance they cannot afford.
Such an experiment is under way in the Commonwealth of Massachusetts with troubling results. Already the Commonwealth's budget is being strained by the unanticipated costs of the mandated insurance program. Over the next few years, Massachusetts lawmakers will be forced to divert hundreds of millions of dollars out of the general fund to subsidize a program that was supposed to pay for itself, taking scarce funds away from other critical programs. While this is happening, Massachusetts residents who have not or cannot comply with the mandate to buy costly insurance on the open market are being forced to pay hefty fines, further compromising their ability to meet the requirements of the law.
Under AB X1 1, the consumer would have been forced to foot the bill so insurance companies could profit. Instead of pushing such a fatally flawed legislation, we should all be fighting to change our failing health-care system without penalizing those who can least afford it. This issue is too important for us to get it wrong.
Leland Y. Yee is the assistant president pro tem of the state Senate. Sen. Yee represents the Eighth Senate District, which includes San Francisco and San Mateo counties.