Beware of ill-thought-out solutions to health care crisis

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By Malinda Markowitz, RN
Mercury News, 2/16/07

As the hearings on the governor’s health proposal begin this week, many politicians and interest groups want us to believe there’s a public consensus in favor of an insurance-based reform model.

But Californians may recall another time when many of the same experts united behind a sweeping change.

In 1996, Gov. Pete Wilson and legislators from both parties enthusiastically pushed through a plan to deregulate energy in California. They promised huge savings for consumers in reduced rates. As everyone knows, it didn’t quite work out.

Instead, there were huge increases in prices and reduced supplies, followed by blackouts affecting millions of Californians. There was a near-bankruptcy for the state and a recall election. Enron and others made millions, until the roof caved in.

Then, as now in health care, the private market was touted as the solution, a fool’s gold that became a nightmare. Let’s not let it happen again. Instead, we should examine proposed legislation that will achieve universal care through a simple, single-payer system.

Gov. Schwarzenegger’s proposal, as well as versions by the leaders of the state Assembly and Senate, also see the private market as the cure for our health care meltdown. All three plans are premised on a massive expansion of the role of HMOs and insurance companies. Schwarzenegger even wants to deregulate what few requirements health insurers have now.

But like energy deregulation before it, we’re being promised snake oil. Just consider a little reported comment from one HMO chief executive, Stephen Hemsley of UnitedHealth. He called the Schwarzenegger plan “an interesting set of proposals that represent real opportunities for our business.”

Schwarzenegger’s plan would force all individuals to buy health insurance if they don’t already have it, and tax businesses to purchase insurance for employees who aren’t covered. There’s even a tax on doctors and hospitals, also to pay for more insurance.

But there’s no limit on premium increases that rose by 87 percent the past six years. Most individuals and families will likely opt for cheaper plans with bare-bones benefits and huge out-of-pocket costs for medical care they actually use, in addition to the premiums the state would force them to pay. And that’s at a time when medical bills account for half of personal bankruptcies and a third of credit card debt.

For anyone opting out, the proposed penalties are severe, from withheld wages to tax penalties to an inability to enroll children in school. What’s next, debtor’s prison?

Similarly, since the proposed payroll tax is less than half of what most businesses now pay for benefits, there’s an obvious enticement for employers to reduce coverage. Californians could lose what they have now, or pay a lot more for fewer services and less care.

As with the energy marketers before them, the insurers stand to make a killing. HMOs, which hardly need the help, are expected to reap hundreds of millions more dollars from the additional 4 million to 5 million new customers marched into their offices. It was just such profiteering that created our current health care crisis by sacrificing quality, access and affordability for higher revenues and profit.

Rather than trying to stampede everyone into accepting a plan that could make the present mess worse, our legislators should support a more universal, comprehensive solution that bypasses wasteful insurers.

State Sen. Sheila Kuehl will introduce the California Universal Health Care Act this month. This legislation sets up a single-payer system with one public entity that pays all the bills, with health care delivered by our present system of doctors, hospitals and clinics. It’s genuinely universal, controls costs, guarantees choice of physician, ends insurance industry waste and denial of care, and assures a single standard of quality care for all. It does nothing to increase insurance profits, but works a whole lot better for the rest of us.