According to conventional wisdom, Hispanics are one monolithic group wedded to government solutions in health care. But a new poll by the Hispanic Business Roundtable (HBR) shatters that stereotype with the revelation that many Hispanics are expressing a desire for more control over their health-care decisions. This comes at a time when the well-being of Hispanics nationwide and in the state has been steadily and dramatically improving.

Hispanics’ incomes are rising, poverty is on the decline; and Hispanic-owned businesses are flourishing. But many Hispanics remain in the ranks of the uninsured, particularly in California, where one-third of the state’s 10 million Hispanics lacks health insurance. This situation calls for reform but Hispanics are not embracing the same, failed big-government approaches to health-care reform. Indeed, these approaches victimize Hispanics by pushing them into the ranks of the uninsured.

According to a survey co-released today in Sacramento by the Washington, D.C.-based Hispanic Business Roundtable (HBR) and PRI, two-thirds of uninsured California Hispanics indicated that they do not have health insurance because it is too expensive or their employer does not provide it. (See Figure 1.) While the current federal tax law—over which California lawmakers have little control—perpetuates the problem of the uninsured by discriminating against individuals who do not receive employer-sponsored health insurance, state laws may actually be making this bad situation worse.

Figure 1

Mandates: Part of California’s Problem

Despite political appeal, mandating that health-insurance companies provide, or that consumers purchase, certain health-care benefits creates the unintended consequence of increasing the number of uninsured. With every mandated benefit, the cost of insurance rises. Thus, by imposing mandates, lawmakers essentially tell workers that if they cannot afford top-notch insurance, they cannot have any insurance at all.

For some businesses, the cost of providing mandated benefits leaves them with a difficult decision: cut other health-care benefits, cut other fringe benefits or cash wages, or drop the health benefit altogether. A recent study by the Health Insurance Association of America found that, due to mandates, insurance premiums increased 13 percent. Almost one in five small businesses that do not currently provide health care would do so absent mandates. Faced with increased costs, individuals face similar decisions.

Health mandates harm individuals who purchase health care on their own or who purchase health care for other family members through their employers. Evidence shows that, as the cost of health-care coverage rises, young people and people with low incomes are the first groups to drop coverage for themselves and their family members.

While there is disagreement among academics regarding the number of uninsured that will result from each additional health mandate, there is virtually no disagreement that the number of uninsured will increase as a direct result of imposing the mandates. A study by the Employee Benefit Research Institute in Washington, D.C. estimated in 1996 that each health mandate in California could cause from 11,000 to 20,000 individuals to lose their health insurance due to higher costs. California lawmakers continue to pass numerous mandates annually.

Health mandates create "over-insurance" where individuals may actually receive health benefits that exceed what they would otherwise purchase on their own. In fact, health mandates force consumers to pay for benefits they may not even desire.

Finally, health mandates have made it illegal for individuals between jobs and workers who do not receive employer-based health insurance to purchase basic, low-cost policies that would protect against a catastrophic accident or illness. As a result, many are forced to forgo health insurance altogether. In this way, well-intentioned California lawmakers are actually undermining access to health care.

*Source: The survey conducted by QEV Analytics, Inc, interviewed 1,000 Hispanic adults nationwide from January 7-17, 2000, and has a margin or error of +3. Two hundred interviews were conducted in California.

Consumer-Driven Solutions

The HBR poll is striking in that it also reveals a strong preference by California Hispanics for lawmakers to direct their attention to improving health care access and affordability (62%), rather than HMO reform (13%). See Figure 2.

To promote health-care choice, access, and affordability, California lawmakers should:

• Provide for consumer-driven health care. Allowing for the creation of more Medical Savings Accounts (MSAs) and providing a refundable tax credit for the purchase of health insurance for the uninsured are good starting points. Lawmakers should eliminate current state-run health-care programs for the uninsured to finance such an approach.

• Remove costly mandates from health insurance policies. Lawmakers should make it legal for the uninsured to purchase basic health-care policies to protect them in the event of an accident or catastrophic illness.

• Avoid substituting government programs for private insurance. Lawmakers should realize that expanding public-sponsored health care encourages the privately insured to drop their insurance coverage and sign up for the public program—leaving little change in the overall uninsured rate.

Figure 2

The Need for Leadership

The HBR poll should help policymakers understand that California Hispanics are really not different than any other group in the state. What they all want is choice and control over their health-care decisions. Allowing for the greatest flexibility in helping all Californians best meet their own health-care needs, rather than promoting government-controlled health care, should be the cornerstone of any health-care reform. Such reforms require vision and leadership to make them a reality for all the people of California.

* Naomi Lopez Bauman is director of the Center for Enterprise and Opportunity at the California-based Pacific Research Institute.