San Francisco Business Times, October 5, 2007

California Gov. Arnold Schwarz­enegger's special session to achieve "consensus" on health reform really comes down to one issue: How much more will we be taxed to fund government control over our health care? The session should consider ideas better than the ones now on the table.

Under the governor's proposal, California's workers, providers and individuals would collectively strain to insure the state's uninsured. The plan would require all Californians to buy health insurance. It would also tax doctors 2 percent, and hospitals 4 percent of revenues, and tax employers with 10 or more employees 4 percent of payroll. If that were not enough, Schwarzenegger said he would "never close the door on anything," including an additional tax hike on California residents.

Assembly Speaker Fabian Núñez's bill would impose "pay or play" rules on employers. They would have to spend at least 7.5 percent of payroll on health care for workers, or else pay to a state fund for the uninsured. Núñez had hoped his tax would be a slam dunk, but the governor's promise to veto Núñez's bill, and zero Republican support, guarantee that any tax hike will come via a ballot initiative.

The governor should revisit his earlier inclinations to fix, rather than force, insurance. We need to lift government barriers on health savings accounts, nurse practitioners, Medicaid, and insurers, rather than expanding inefficient government programs at the expense of our workers and doctors.

Diana Ernst is a fellow at the Pacific Research Institute in San Francisco.