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Conservatives Are From Mars, Liberals Are From San Francisco
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On January 9 Governor Arnold Schwarzenegger, hobbled with a broken leg, will deliver the State of the State speech in which he is expected to unveil his plan for health care. The guessing game is on in the Capitol, with key signals in the press.

On December 29, the Sacramento Bee took up the case of Megan Fidell, who broke an arm in a bicycle accident. The insurance from her new job at the California Department of Water Resources had not started. Sutter General Hospital billed her $6,000 for putting her arm in a splint. It turns out, however, that Fidell applied for Sutter's charity program and the hospital wrote off a "significant part" of her bill. 

Fidell took her tumble back in September of 2005, and the true news hook from the Bee’s point of view was Assembly Bill 774, which took effect January 1 and prohibits hospitals from overbilling low- and middle-income patients with no insurance. This bill, by former assemblywoman Wilma Chan, an Oakland Democrat, limits the charges to the highest level charged by Medicare and other government programs. It's a regulatory solution, adding a new mandate to an already highly regulated sector.

Governor Arnold Schwarzenegger signed Chan's legislation and placed price controls on drug makers, but the extent of his commitment to government solutions remains unclear. He vetoed SB 840 by Sheila Kuehl, a massive plan for government monopoly health care.

Yesterday the Bee published "Governor heeds health study," citing a study by the New America Foundation, welcomed by the Schwarzenegger administration, which found that California families pay a hidden tax of $1,200 to subsidize the uninsured.  The Foundation's Len Nichols told reporters that since the governor rejected a "single-payer" system and opposes new taxes, that leaves only two choices for health care: "shared responsibility or a lick and a promise."  That leaves the question of employer mandates, which Speaker Fabian Nunez supports, or individual mandates. It also leaves out some other good ideas California could easily implement at low cost.

California persists in taxing residents for their out-of-pocket health expenses. Tax-deductible Health Savings Accounts (HSAs), increasingly popular nationwide, would help Californians take responsibility for their own health and reduce their dependency on employers. Those empowered with HSAs will not tolerate the high price of hospital care.

They could also benefit from the type of clinics already thriving in New Jersey, staffed by nurse practitioners. Those clinics could thrive here, but California regulations prevent more than four nurse practitioners working under one physician at a time. That needs to be changed.  In 2007 and beyond, Governor Schwarzenegger and the legislature should lift burdensome government regulations and allow market incentives to work.

Employer-provided health insurance, the current status quo, is an idea launched during World War II to get around wage controls. Individuals, not employers, should get the tax break. That way, Californians such as Megan Fidell could select the coverage that best meets their needs and keep it between jobs. Solving the access problem with universal choice will meet a lot of resistance.  The governor, a former actor, should understand the dramatic leverage possible in the state Capitol.

This dramatic narrative casts victims such as the uninsured, undocumented and children – everything is "for the children" in this state, even if only adults benefit.  In this vision, the victims are locked in a struggle with villains such as hospital chains and insurance companies. This struggle summons government to the rescue, with more regulation and the ultimate goal of government monopoly health care, euphemistically packaged as "single-payer."

That remains the vision of many in the government establishment here. They want an already burdened state to function as an omnipresent wet nurse, whatever the cost and whatever the problems of such systems elsewhere, particularly Canada. There a judge has ruled that the ban on private health-care alternatives violates the rights of patients.

The governor should understand that such difficulties will not deter those seeking to impose a government monopoly on the Golden State. It will take a rare brand of courage and perseverance if California is to have health care that empowers the people rather than the government. CRO

copyright 2006 Pacific Research Institute

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