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Contributor

Ray Haynes

Mr. Haynes is an Assembly member representing Riverside and Temecula. He serves on the Appropriations and Budget Committees. [go to Assembly Member Haynes website at California Assembly][go to Haynes index]

Oops, Government Does It Again
Guess one big reason health insurance costs so much...

[Ray Haynes] 9/21/04

Last week, the Los Angeles Times reported that health care premiums were going up—again. Since 1998, the cost of health care insurance has increased over 40%, and it keeps going up. We know that increased premiums increase the number of uninsured. For each one-percent increase in the cost of health insurance, 40,000 people in California lose their insurance. That means in the last 6 years, about 2 million people have lost their insurance due to increased health insurance costs.

So—what has caused the increase in health insurance premiums? Government. Between 1999 and 2003, the California Legislature, aided and abetted by Governor Davis imposed over 20 different mandates and regulations on health insurance; including mandatory coverage of mental health, granting unlimited rights to sue insurance companies for bad faith, mandating coverage for a variety of different diseases, eliminating mandatory arbitration for disputes, requiring a variety of different appeals processes if there were coverage disputes, and the like. When the laws imposing these mandates were passed and signed by the Governor, we were told: (1) the coverage provided was only a right and fair thing to do for everyone; and (2) the mandate would only increase the premium one or two percent. Add 20 mandates and voila—a 40 percent increase in premiums, and 2 million more uninsured souls in California.

This year the legislature wanted to mandate pregnancy coverage. In the late 1980’s and early ‘90’s, I bought an individual policy to cover my family, and I was given the choice of whether I wished to buy pregnancy coverage. The cost for that coverage was $280 per month, in addition to the $400 per month I would pay for other medical coverage. I chose not to take the coverage. About two years later, my wife got pregnant. It cost us about $3500 to pay for the costs of the pregnancy. If I had purchased the insurance, I would have paid over $6000. If the Legislature had its way, I could only buy insurance with the coverage, increasing my costs to $680 per month. Had that been the only choice available to me in 1989, I would have remained uninsured.

We have heard politicians whine about the uninsured, but the truth is, these are the same politicians who have increased the ranks of the uninsured by their misguided policies. The biggest problem in health care today is that almost all medical care is paid for by third parties, that is, you get the health care, and either the government or your boss pays for it. The reason? If you pay for your own health care, the government taxes you on the cost of the care, or the insurance to pay for it. If the government or your boss pays for it, you are not taxed. So—everyone tries to shift the cost to the nontaxable side of the ledger.

This means that someone else is deciding whether or not to pay for health care you need. More often than not, when they are paying for it, they decide you don’t need it. That can be really when you really do.

To solve this problem, the Legislature decided to impose more stupid government regulations on business to fix the problems created by the stupid government regulations they put on business earlier. That solution, SB 2, was referended by business, and is up for a vote in November. If you think more government will solve the problems in health care created by more government, you should vote yes on SB 2, which is Proposition 72. If you think government should just leave you alone, you should vote no. I would rather have government just leave me alone. CRO

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