Americans Beware: “Healthy” San Francisco’s Tax Hikes May Be Coming Your Way

Americans Beware: “Healthy” San Francisco’s Tax Hikes May Be Coming Your Way

San Francisco Mayor Gavin Newsom recently wrote a column for the Huffington Post promoting his Healthy San Francisco plan as a model for the federal “public option” touted by President Obama. Healthy San Francisco could be a model, but not in the way Mayor Newsom imagines.

Currently under negotiation between federal politicians and lobbyists, the “public option” refers to a new complex of bureaucracies that would provide health insurance to any American who prefers to have his health insurance paid for by taxpayers rather than receive it as a benefit of employment or acquire it himself. Former U.S. Secretary of Health and Human Services Michael O. Leavitt describes this as a “Trojan horse” that would crowd out health insurance chosen by employers or individuals and metastasize into a government monopoly.

The public option aims to tax privately purchased health benefits to subsidize these new bureaucracies which, like Medicaid, will likely be scattered across federal, state, and local governments. That is a key reason why an estimated 119 million Americans will lose their private health benefits and become dependent on the “public option,” according to economists at The Lewin Group.

Democratic leaders insist that the “public option” will not cause people to drop their private coverage. Unfortunately, President Obama and HHS Secretary Kathleen Sebelius have previously made no secret of their preference for single-payer, government-monopoly health insurance, as in Canada. So, it’s difficult to avoid the conclusion that they would actually prefer maximum crowd-out.

Voters who prefer choice in health care have become skittish, and they have other reasons for concern. Every time Democratic leaders roll out a federal health reform proposal, the Congressional Budget Office issues a report concluding that the costs will be much higher than the politicians suggest. To buck the tide, the White House has called upon Mayor Newsom to trumpet the success of Healthy San Francisco, which is the “public option” writ small.

Mayor Newsom insists that his Healthy San Francisco, which hikes taxes on employers to pay for the city’s public-health bureaucracy, has increased choice and competition while lowering costs. In recent interviews, the mayor claims that patients dependent on Healthy San Francisco enjoy access to a wide selection of private doctors and services through the plan’s “Care Network.” That sounds good but it isn’t true.

Until June, the “network” was limited to branches of the Department of Public Health and the Community Clinic Consortium, alongside two private providers. However, one private provider is the Sr. Mary Philippa Health Center, the charity wing of St. Mary’s Medical Center, a small part of the mega-system Catholic Healthcare West. This is doubtless a fine center for poor people but non-profit hospitals affiliated with communities of faith have been doing this long before Mayor Newsom got involved.

The second private provider is the Chinese Community Health Association, undoubtedly a similarly motivated organization. These two private providers served less than three percent of Healthy San Francisco’s dependents, according to a January, 2009, report. Noticeably absent from The Care Network were any mainstream hospitals or physician practices.

On June 3, after two years of operations, Healthy San Francisco finally added Kaiser Permanente to its network – but this move bears all the signs of political pressure. Kaiser Permanente is an HMO, a model which integrates payer and provider. It makes no sense for Kaiser Permanente to “join” Healthy San Francisco’s network. Even Blue Cross, Blue Shield, CIGNA, or Aetna can’t get Kaiser Permanente to join their networks, because they are competitors.

The only part of Healthy San Francisco that’s “real” are the taxes, of which $28 million were levied on San Francisco’s small businesses in 2008. Despite this excess taxation, there are signs that lack of access to care – a classic side-effect of government programs – is a significant problem. According to a report in the San Francisco Chronicle in March, pregnant women with appointments were waiting five hours to be seen, and women seeking mammograms experienced severe backups at San Francisco General Hospital.

High taxes, high costs, limited choice, and long waits under a “public option.” Is this the future of health care in the United States?

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.