Last year, State Senator Sheila Kuehl (D-Los Angeles) introduced SB-840, the California Health
Insurance Reliability Act, which the State Senate has passed and now awaits debate in the Assembly,
having passed the Assembly Health Committee in summer 2005. SB-840 imposes a Canadian-style
government healthcare monopoly in California.

This briefing paper demonstrates the negative consequences of such a system, and advances consumer-directed health care as an alternative. SB-840 is supported analytically by a report from the Lewin Group, a consulting firm in Virginia. The Lewin Group’s report claims that SB-840 will result in monetary savings, but avoids other
costs that government monopoly imposes on health care. Remarkably, less than five years ago, the same Lewin Group wrote a critical analysis of single payer health care in Canada that warns Americans against adopting such a system, because “the cost savings could be associated with a decline in quality of care and an upsurge in negative public opinion.”

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