California Healthcare “Reform”:
Bigger Profits, Worse Health Care

Jan 22, 2007

Arnold Schwarzenegger began his second term as governor with a “comprehensive plan to reform California’s broken health care system.”

Today 6.5 million Californians, or one fifth of the state’s population, are uninsured, most of them workers and their families. And everybody knows why: health insurance is so expensive, no worker whose employer doesn’t offer health benefits can afford to buy it.

So does Arnold propose putting a cap on insurance premiums and the astronomical prices that hospitals and drug companies charge? Does he suggest forcing every boss to provide health benefits?

No, none of that. Companies with less than 10 employees will have no obligation whatsoever. Only those with more than 10 employees who do not provide coverage will pay a “penalty” of four% of their payroll. But since that is only about half the amount companies today spend on average on employee health benefits, not only will most of them opt for this “penalty,” many companies that have coverage may even drop it!

In the meantime, every worker will have to buy health insurance–and probably at higher rates too, since insurance companies are likely to raise their premiums and deductibles under the pretext that they can no longer reject anybody. As for the financial aid Arnold promises for low-income households, guess who’ll pay for it–taxpayers, of course, that is, workers themselves.

In short, if Arnold’s plan comes true, it will bring insurers more profit, save bosses money, and workers will end up paying for all that while still not getting the health care they need.

So just like with education or Social Security before, when you hear politicians talking about health care “reform,” run the other way!