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While AB 8 (horrible compromise bill) and SB 840 (infinitely superior bill) are California-specific pending legislation, the ramifications of which bill is ultimately passed (if any) will ring throughout our country since insurance companies, the medical industry, and politicians will be watching to see what they can get away with in YOUR state. Please take heed and most definitely take action. The following letters are reprinted with permission from the “Health Care for All” MySpace blog.
TAKE ACTION to STOP AB-8. Everybody in California can go to: Legislator Search – Type in your zip code and call your Senator and follow up with e-mails no later than 9/11. And please forward this to all your e-mail lists off MySpace in California. Please see below the official Health Care For All opposition letter on AB8 for talking specific talking points.
California’s Unhealthy Bill: Fake Healthcare Reform A Victory for Schwarzenegger — And a Boon for Insurance Companies
Posted September 5, 2007 | 10:10 PM (EST)
In alliance with Gov. Arnold Schwarzenegger, Democratic leaders of the state Legislature, led by Assembly Speaker Fabian Nuñez are rushing to enact a substandard health reform plan that will not reduce the health insecurity of California families.
They’re apparently even willing to jeopardize Sen. Barbara Boxer and their own party’s slim hold on the United States Senate along the way.
Here’s the deal: Nuñez and some other Democrats are actively working with Schwarzenegger to put together a “compromise” healthcare package.
Schwarzenegger, the main architect of that plan, gets to claim credit for supposedly solving the state’s healthcare crisis using “bipartisan consensus.” As collateral damage to Democrats, Schwarzenegger can tout this deal to boost his candidacy against Boxer in 2010.
Nuñez could then get the governor’s support for extending his term as speaker.
This constellation of events may be dandy for a career politician or two, but it leaves behind a lot of other Californians, who will have to contend with a poor healthcare bill full of holes.
AB 8 does nothing to rein in rising insurance premiums — up 87% nationally this decade — or rising co-pays, deductibles and other health fees. Which means that costs, already unaffordable for far too many, would continue to spin out of control.
The bill fails to limit rising prescription drug costs, especially notable at a time when Schwarzenegger has just eliminated funding for his “voluntary” drug price restraints that were so ballyhooed last year by the governor and the authors of AB 8.
It is not universal, as many of the currently uninsured would remain without access to care. It fails to assure uniform, comprehensive benefits, and therefore perpetuates an increasingly multi-tiered health system based on the ability to pay.
It fails even to require insurance companies to provide insurance. They would not have to offer coverage to those with serious medical conditions — those people would instead be dumped into a publicly funded high-risk pool, earning big insurance companies millions in additional profits while bankrupting the public pool with the sickest, costliest patients.
The bill does not even protect patients’ choice of physicians, hospitals or other providers.
And, most critically, the plan reinforces and expands an insurance-based system — the source of much of the present crisis — thereby subverting real reform for years to come.
At the center of the plan is a mandate on businesses to either provide health coverage or pay taxes into a fund to buy it for their employees. The new tax would fall between the 7.5% of payroll costs favored by Nuñez and the 4% Schwarzenegger proposes.
No matter where the compromise figure ends up, it will be far less than many employers now pay for health benefits. One-fourth of all California businesses that provide health benefits currently pay more than 15% of their payroll for health premiums, according to the California Healthcare Foundation. As a result, businesses that now provide health coverage to employees would have an incentive to drop it.
Moreover, the mandate on employers is unlikely to survive a legal challenge; a similar Maryland bill was thrown out by the federal courts for violating federal benefits law.
Schwarzenegger continues to push his proposal to force most uninsured people to buy insurance or face severe penalties. So far, Democrats have resisted this proposal, but many expect them to accept some form of individual mandate as the final price for Schwarzenegger’s blessing for the term limits initiative.
Last year, Democrats united behind SB 840, a single-payer-style, enhanced “Medicare for all” bill that would have provided guaranteed healthcare for everyone, controlled costs, eliminated co-pays and deductibles, guaranteed choice of provider, and gotten the insurance companies out of the way.
Similar systems are succeeding in every other industrialized democracy — including Schwarzenegger’s homeland, Austria. If the politicians in Sacramento are concerned about patient care, they will not now settle for a bad healthcare bill that will further degrade our healthcare safety net. A bad healthcare bill is worse than no bill.
Deborah Burger, RN is president of the California Nurses Association.
Health Care for All California, a statewide chapter-based organization, has led the movement to pass single payer health care since 1997. HCA sponsors both SB 840 (Kuehl) and the OneCareNow Campaign, a growing grassroots movement to pass single payer health care. SB 840, now called the “gold standard of health care,” would solve the state’s health care crisis by providing for equitable and affordable universal health insurance and a single standard of high quality comprehensive care while preserving the state’s health care infrastructure of providers, hospitals and pharmacies as private and competitive businesses.
We oppose AB 8 for the following reasons:
- AB 8 will expand the health insurance industry, not solve the health care crisis.
First and foremost, under the banner of moving toward universal health care, instead, AB 8 will leave millions uninsured or underinsured while strengthening and perpetuating an insurance system that currently rations health care by excluding those who cannot afford to pay the high cost of insurance premiums. Insurance companies decide what is covered and what is not. They deny care to the uninsured, the underinsured and the insured with preexisting conditions. Health insurance companies ration health care to secure profits.
The unsolvable issue for the status quo is that although health care is treated as such, it is not a commodity. It is a life-giving and life-saving service that is needed by everyone. Providing affordable and quality health care for Californians is not the mission of for-profit insurance entities. AB 8 will not alter the profit motives of this industry, nor will it change the responsibility insurance companies have to their stockholders. The reforms AB 8 proposes to place on current insurance practices will not solve the state’s health care crisis. Instead, they will result in higher insurance prices for individuals, businesses and governments.
- AB 8 does not provide for the necessary cost controls to achieve affordable health care.
Both state and national studies indicate that including all residents in a single risk pool that is insured by a government administered non-profit insurance trust fund is the only method that will save billions of health care dollars–enough to provide affordable and comprehensive universal health care. Although AB 8 provides for preventative health care, disease management and administrative cost controls, it does not do enough to control costs. With its piece meal approach, AB 8 cannot achieve the significant cost savings that a single payer system can. In addition to the above measures, a system as provided by SB 840 can control costs by establishing evidenced based standards of care and by utilizing capital investment management, consolidated budgetary authority, system-wide health care planning and the state’s power to negotiate lower prices for durable medical devices and bulk prescription drugs for 36 million Californians.
- AB 8 does not provide protections needed to guarantee affordability.
This bill leaves too many Californians vulnerable to health care reform that will be too expensive, will not provide enough coverage and for many, no coverage at all. AB 8 does not provide for guaranteed affordability and does not limit co-payments, deductibles or other out-of pocket costs. Although AB 8 does allow for premium subsidies for enrollees with household incomes at or below 300 percent of the poverty line, it does not provide a benchmark for cost sharing between employers and employees.
AB 8 requires that all defined employers spend 7.5 percent of Social Security wages on health care expenditures, which includes purchasing health care coverage for their employees and could include as well, contributions to health savings accounts and other health care programs that do not provide direct health care coverage.Many employers who currently provide health care coverage spend more than 7.5 percent of Social Security wages for the coverage they provide to their employees. AB 8 does not provide minimum coverage standards for the employer market, which could encourage some of these employers to reduce or drop the coverage they provide.
According to a recent Kaiser Family Foundation survey, premiums for employer-sponsored family health coverage have increased by 73 percent since 2000, while wages increased only 15 percent concurrently. AB 8 provides for no state oversight of health insurance rates.
A recent joint report by the California Budget Project and the UCLA Center for Health Policy Research finds that “many families spend a substantial amount on health care premiums and out-of-pocket costs, and could face financially devastating medical expenses if they are not adequately protected.” The report states that health care reform legislation should take into account the income needed in California to pay for other necessities such as housing, food, child care, and the risk of extraordinary health care costs. The report suggests placing limits on out-of-pocket costs as well as full subsidies up to 200 percent of the poverty line and partial subsidies “well above” 300 percent of the poverty line. AB 8 does not do this.
AB 8 will place many individuals and families in harm’s way.