Monday, January 08, 2007

Universal Healthcare in California

After spending some time in a Idaho hospital after a holiday ski accident, the Governor has unveiled his new healthcare plan for all Californians.

Eat your heart out, Hillary! This plan actually as a chance of becoming reality!

According to the plan, all Californians will be required to maintain health insurance. This would serve to reduce emergency care costs for the uninsured that hospitals currently must “eat” and eventually pass along to insured and paying patients. The governor has likened this to a hidden tax. This would also improve the public health by encouraging early treatment and maintenance care of ailments-typically much cheaper and effective than late treatment and emergency care.

More controversially, the plan will require all business with 10 or more employees to offer insurance or pay at least 4% of their payroll to help pay for their employees’ health coverage. Additionally, this plan would require insurance companies to guarantee individuals coverage in the individual market and spend 85% of every premium dollar on patient care.

There is certainly a need for healthcare coverage in California and too small of a percentage of our population currently are able to maintain coverage. Market forces have kept adequate coverage out of the hands of many who need it and want it. Because insurance companies frequently no longer offer individual plans in California, insurance is impossible for many people to obtain.

Further, because California emergency rooms must provide services to individuals without regard of their ability to pay, all Californians must carry the burden. Those that are unable to pay are also unable to obtain preventative care or treatment for most ailments until they find themselves in emergency rooms. The costs at that point are much higher and the chances of successfully treating the ailment are significantly lower. Given that we are already paying a high cost for medical care for those that cannot pay for themselves, I would much rather my dollars be used more efficiently and effectively.

All of this analysis comes without a dollar sign attached to it, so far. As far as I can tell, the Governor has not announced how much his plan is going to cost taxpayers or where the money will come from. All Californians will be required to carry insurance now and this could cause some difficult questions of enforcement and, in an unlikely worst-case scenario, could potentially lead to chronic overcrowding in hospitals. While the Governor has enjoyed a remarkable record with the economy, requiring all companies to offer health benefits could be detrimental to many small businesses. Not to mention, we have no idea what this would do to preexisting health benefits and insurance premiums.

We know what the ends are (and the ends are good!), but we don’t yet know the means by which the Governor wants to implement these plans. Will the ends justify the means?

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