Senator Kuehl’s Health Care Agenda

Democratic Sen. Sheila Kuehl, who chairs the Senate health committee, made sure that a recent attempt at health care overhaul in California went down in flames last month. Her committee rejected ABX1 1, the Schwarzenegger-Nunez health care reform legislation.

That measure aimed for “universal” health care through compulsory purchase of private insurance, but Sen. Kuehl tried to point out its worrisome aspects, such as a probable “lack of choice” of doctors and hospitals. Another warning sign was ,$14-billion price tag, despite our equally large deficit. But Sen. Kuehl didn’t get rid of ABX1 1 for its obvious red flags.

Instead, she wanted to bring back her own bill, SB-840, under which California would impose a Canadian-style, government monopoly health care system, simply eliminating patient choice in favor of absolute government control. When SB-840 first came around in 2006, even the bipartisan Gov. Arnold Schwarzenegger stayed on his side of the aisle, and promptly vetoed it. But SB-840 was reintroduced last year and now lingers in Assembly committee.

Californians know that large government programs have not helped the problem of the uninsured. Indeed, the government significantly underpays providers who treat patients enrolled in public programs. Overall, uninsured patients pay somewhat higher prices in California emergency rooms than Medicare does for its dependents, America’s seniors. SB-840 might reduce current health spending by four percent, but the price of these savings is great, including a dramatic drop in the number of California physicians, waiting lists for medical services costing an estimated $1 billion each year, and abuse of “free” health care, costing as much as $9 billion—much more than the amount saved by eliminating “profits.”

Partisans of big government push Sen. Kuehl’s plan, but there is a better approach. Consumer-directed health care (CDHC) instead encourages competitive behavior among providers to serve patients better, give them more choice, and provide greater ownership of their health care dollars.

Several legislators introduced good (CDHC) proposals last year, including state income-tax deductibility for Health Savings Accounts (to align with federal tax deductibility), a California health insurance exchange to allow employers to pay for workers’ individually-purchased health insurance, and Health Opportunity Accounts in the state Medicaid program. Nurse practitioners can play a key role in health care, and fewer restrictions on their scope of practice would be another good idea.

The law should force health insurers and providers to compete for patient dollars, making health insurance more affordable for Californians. For real reform, we could allow employers and employees to direct pre-tax health payments toward the purchase of individual insurance, as introduced in Missouri and other states. To reduce premiums, the state should also allow patients to opt out of some costly government mandates, such as acupuncture services, that they may not want or need.

Meanwhile, what does the future hold for California health reform? Instead of Kuehl-care, or expensive, mandate-ridden models, Californians support lasting improvement, based on increased patient choice and low-cost options, without sinking our state even further into debt.

In reference to the recent failure of ABX1 1, the governor has said that a setback is just a setback. Fortunately, he knows that Sheila Kuehl’s SB 840 would set us back for good, because once in place, government monopoly plans are difficult to reform, much less remove.

If legislators learn that lesson, they can turn this health care jam into an opportunity.

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.

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