The Militant (logo)  

Vol. 72/No. 4      January 28, 2008

California health-care plan will
benefit insurance companies
(front page)
SAN FRANCISCO—Republican governor Arnold Schwarzenegger has teamed up with a leading California Democrat, Assembly Speaker Fabian Nuñez, to draw up and promote a $14.4 billion health-care plan that is being touted as a possible model for the rest of the country.

The California Nurses Association, among others, opposes the bill, calling it a “boondoggle” for the insurance companies.

In December, the measure passed in the state assembly by a vote of 45 to 31. It will now go before the state senate. The sponsors hope to place it on the November ballot.

About 20 percent of California residents—6.6 million—lack medical coverage. Nationally the number is about 47 million.

News articles and commentators have noted the similarity between the California plan and the health-care proposals being promoted by Democratic presidential candidates Hillary Clinton, Barack Obama, and John Edwards.

The centerpiece of all these plans is to get everyone who lacks coverage to buy medical insurance or to enroll in Medicare or some other health plan. The California measure requires that residents of the state have insurance by 2010. Supporters of the plan say it’s like the requirement that all drivers who own cars purchase auto insurance.

For at least some of those who cannot afford this plan, the California bill provides for government subsidies and tax credits. A new bureaucracy is to be created that will figure out who does and does not have a low enough income to qualify for the financial aid.

In the plans proposed by Clinton and Edwards, the purchase of insurance is mandatory, with means-tested provisions for financial help and tax breaks to those who qualify. Obama says his plan would be mandatory for children only, but he would consider making it mandatory for all under certain conditions. All these presidential candidates say they would end tax cuts passed under George Bush to help finance their plans.

The estimated $14 billion needed to pay for the California plan is projected to come from a combination of taxes on employers who don’t provide health care for their employees and taxes on cigarettes and on hospital revenue.

Andrew Stern, president of the Service Employees International Union, whose membership includes 600,000 health-care workers, is a strong promoter of the plan. “It is precedent setting, because California, the most populous state and diverse state in the nation, can make health care happen, can show this country that it can be done,” he said.

“A boondoggle for the insurance companies” is what the leaders of the California Nurses Association/National Nurses Organizing Committee called the measure in a press statement opposing the plan. The insurance companies will continue to control the health care of millions of California residents, the statement noted, adding that patients will continue to be denied necessary medical procedures and access to specialists while insurance companies will continue to charge whatever they want.

Under the California plan, the cutoff for a subsidy would be a yearly income of $52,000 to $60,000 for a family of four. Today the price of market-rate insurance for such a family is $11,000 a year, not counting co-pays and deductibles.

The skyrocketing costs of private insurance, as well as lifetime caps and policies that are written in such a way as to make it almost impossible to determine which services and doctors are covered, are reasons why millions of working people who do have insurance still face restricted care and financial crisis when they fall ill.

None of the health-care plans do anything to upgrade or add to actual medical facilities, or to overcome the shortage of doctors, nurses, and hospitals in working-class communities. Between l990 and 2003, 60 hospital emergency rooms in California were closed.

In the presidential primary debates, Republican Mitt Romney has been lauding a state law he signed as governor of Massachusetts in 2006. Residents of Massachusetts were given the deadline of December 31 to buy insurance or face a penalty of $219 on their taxes. Under this measure, the penalties for the uninsured increase significantly in the second year and accrue each month.

The authors of the Schwarzenegger-Nuñez bill say it will bring medical coverage to 3.6 million of the 6.6 million Californians now lacking insurance. Undocumented workers are excluded, as they are in the plans put forward by Clinton, Edwards, and Obama. In California, children of undocumented workers would be covered.

In Governor Schwarzenegger’s “state of the state” message on January 8, he urged passage of the new health bill, while at the same time announcing a proposal that existing state funding for health care, education, state parks, and other social services be cut “across the board” to close a projected $14.5 billion deficit. His proposed budget includes cuts of $1 billion from Medi-Cal by eliminating some benefits such as dental care. Medi-Cal is a health insurance program for low-income, elderly, and disabled residents.  
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