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Posted by: thepinetree on 01/29/2008 11:10 AM
Updated by: Kim_Hamilton on 01/29/2008 11:28 AM
Expires: 01/01/2013 12:00 AM
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State Healthcare Plan Defeated~From Senator Dave Cox
Sacramento, CA...The Senate Health Committee considered Assembly Bill 1X 1 by Speaker Fabian Nunez, the comprehensive health care reform measure introduced in last year's special session on health care. This proposal, passed by the Assembly in December with no time for Assembly members to review the final product, was given a thorough review by the Senate Committee....
No summary would do this 200-page bill justice, but it basically requires all Californians to have health insurance. It requires California employers to provide their employees with insurance or pay a fee to the state of up to 6.5 percent of their total payroll. People who cannot afford to purchase insurance would be provided with a plan by the state with a standard set of benefits for a small monthly premium. Hospitals would have to pay four percent of their net revenues to the state, and the tax on cigarettes would be increased by $1.75 per pack to help pay for the plan.
Needless to say, this is a complicated measure. The Senate Health Committee had an eleven hour hearing on the bill on January 23rd. At that time, we had the benefit of a fiscal analysis of the bill provided by Legislative Analyst Elizabeth Hill. Generally, Ms. Hill concluded that based on current estimates of health care costs and the premiums paid for individuals covered by the state-provided plan, the program would start running deficits (expenses exceeding revenues) by the fifth year of operations. Her analysis of higher premium levels revealed estimates of deficits starting even sooner. The bottom line of her estimates of costs compared to revenues was that the deficit might be over $1.5 billion annually by the year 2012. Although the Leg Analyst's analysis is excellent as is most of the work of her office, I believe that the assumption that a state-provided plan would only cost $250 per month is much too optimistic. There are other areas of the analysis that I also believe are unreasonable.
I voted against Speaker Nunez's health care reform bill. I have said before that Senate Republicans support a more market-based reform that focuses on improving access to health care rather than providing everyone, including people who are illegal immigrants, with a government-sponsored health care plan. We need to increase flexibility in the type of plans insurers can offer to Californians that more easily fit their individual health needs. Tax credits and increasing the number of health care providers will assist people in getting the type of care they need at a reduced price. None of these concepts were included in AB 1X 1.
California currently spends $36 billion per year on health care for low income Californians. This figure has been increasing annually at a rate above inflation since I have been in the Legislature. There is no reason to believe that a massive expansion of government-provided health care under AB 1X 1 would not continue that trend and possibly bankrupt the state. We need health care reform. But AB 1X 1 is not the right solution.
To read the LAO's report go to: http://wwwlao.ca.gov/2008/hlth/health_reform/health_reform_012208.aspx
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