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Governor: Don't Close the Door On Ideas
by Diana M. Ernst 10/1/07 |
California Governor Arnold Schwarzenegger’s special session to achieve “consensus” on health reform really comes down to one issue: how much more will we be taxed to fund government control over our health care? The session should consider ideas better than the ones currently on the table.
Under the governor’s proposal, California’s workers, providers and individuals would collectively strain to insure the state’s uninsured. The plan would require all Californians to buy health insurance. It would also tax doctors two percent, and hospitals four percent of revenues, and tax employers with 10 or more employees four percent of payroll. If that were not enough, Schwarzenegger recently said he would “never close the door on anything,” including an additional tax hike on California residents.
Contributor
Diana M. Ernst
Diana Ernst is a public policy fellow in health care studies at the Pacific Research Institute. She contributes opinion editorials to print media, and routinely writes the monthly PRI Health Policy Prescriptions. Prior to joining PRI, Ms. Ernst was an intern at the Heritage Foundation in Washington D.C. in the American Studies and Judicial Studies departments. She was also a Publius Fellow with the Claremont Institute in Claremont, California, and is currently on the board of advisors at the Grassroot Institute of Hawaii. Ms. Ernst is a graduate of Claremont McKenna College with a B.A. in Government and Philosophy.
Pacific
Research Institute |
Assembly Speaker Fabian Núñez’s bill would impose “pay or play” rules on employers. They would have to spend at least 7.5 percent of payroll on health care for workers, or else pay to a state fund for the uninsured. Núñez had hoped his tax would be a slam dunk, but the governor’s promise to veto Núñez’s bill, and zero Republican support, guarantee that any tax hike will come via a ballot initiative. In the meantime, interest groups are taking sides.
Doctors are unsurprisingly against the Governor’s two-percent tax on physicians. Hospitals won’t just take a four-percent tax for the team. The California Hospital Association (CHA) “supports” the governor only after intense negotiation. CHA terms are strict: hospital taxes must be kept separate from California’s general fund, and they would first go to increase Medi-Cal (Medicaid) payments to hospitals, and then to California’s uninsured.
The Medicaid bureaucracy owes providers some $750 million in reimbursements. As a result, fewer doctors are participating. Two long-term care facilities have already filed suits against the state for not providing requisite Medi-Cal payments. Medi-Cal is second only to Texas for the highest Medicaid bill in the U.S., at $35 billion. Even with these problems, Governor Schwarzenegger not only wants to tax doctors and hospitals, but also wants $4 billion in federal subsidies to expand Medi-Cal and related programs for 900,000 more Californians.
The governor claims he would “never close the door on anything.” He should therefore revisit his earlier inclinations to fix, rather than force, insurance. We need to lift government barriers on health savings accounts, nurse practitioners, Medicaid, and insurers, rather than expanding inefficient government programs at the expense of our workers and doctors.
Californians should have more health-care ownership. We need to align state tax laws with federal laws by allowing Californians to make pre-tax contributions to Health Savings Accounts (HSAs), a kind of 401(k) for health. Statistics show that between one third and one half of HSA owners were previously uninsured, a testament to their gradual but likely success. HSAs paired with high-deductible health plans are also a good idea for new generations who should save for health care when they are young and healthy rather than depending on employers or the government. These measures will help prevent uninsurance.
Also, retail-based “convenient clinics” are the competitive answer to long waits in an emergency room for basic services. Nurse practitioners are qualified to provide basic care, and for very affordable prices. The state should reform “scope of practice” laws affecting them so that Californians, and especially the uninsured, can take advantage of this emerging market.
The governor should also help Medi-Cal recipients to move into the privately insured population by expanding private coverage with Health Opportunity Accounts, and emphasizing a broader choice of health plans.
Finally, the governor should push to deregulate our insurance market. Insurers aren’t competing enough with each other to meet the needs of individual Californians. We are forced out of individual insurance because of costly government-mandated health benefits that many do not demand.
Urgent publicity about our “broken” health care has led to a special legislative session to fix split hairs about sweeping, but generally harmful tax-increasing policies. Though our alternatives are incremental, they will secure lasting objectives that California truly needs: choice, quality and cost-effective health care. CRO
copyright
2007 Pacific Research Institute
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