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February 12, 2008

The Defeat of the California Health Bill

The media has widely and falsely reported the California state senate's resounding defeat this week of a universal health care bill as a rejection of a bold plan for universal health care, and as a blow to efforts nationally. In fact, the defeat of this bill--which was cobbled together by Governor Schwarzenegger and the state assembly leader--should be read as a dramatic plea for universal health care. It is a victory for advocates of real reform.

One of the most progressive, heavily Democratic state legislatures in the nation has refused to support a bill that jerry-rigs a set of reforms into the current system and that fails entirely to achieve health care coverage that is adequate, secure, affordable--and universal. Since the leading Democratic presidential candidates are touting proposals that are similar in many respects, they should pay attention.

The California bill required residents to buy coverage and prohibited the insurance companies from rejecting applicants. It subsidized California's poorest residents, and required employers to subsidize coverage for employees. However, the bill declined to closely regulate the cost of premiums, size of deductibles, or extent of coverage. It did require insurers to spend 85% of premium income on health care--which sounded like an incentive for insurers to raise premiums. Tellingly, one of the most trumpeted features of the bill was the exemption from the requirement to buy insurance coverage if the cost of premiums exceeded 5% of a family's income.

In other words, this bill actually assured many people that they wouldn't need to buy health coverage because they wouldn't be able to afford the insurance premiums.

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Posted by healthinsurance at February 12, 2008 02:02 PM

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