Arnold Schwarzenegger has proposed universal health care for the great state of California. I haven't immersed myself in the analysis of this potential policy, but at first blush it appears to be really ... great!
It shifts the costs of emergency room care into preventative care, it requires that all employers (with some exceptions for small businesses) offer health care plans or pay a 4% payroll tax to contribute to the resource pool, and it covers all kids.
I'm waiting for my better-informed colleagues to explain why this is a bad idea.
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Any plan that keeps insurance companies in the loop is going to be flawed in a major way since they can't collectively bargain like the state can. Also, they're still going to be wasting money trying to ensure that they cover only healthy people. Although I suppose if healthcare costs continued to spiral out of control fewer and fewer people could afford it and California would find it's way to a more sane healthcare system.
Essentially this is better than what we have now.
From what I've read about the proposal, it would bar insurance companies from refusing to provide insurance because of age or prior conditions. If true, and enforceable, this would be a major leap forward.
True. Kevin Drum talks abotu the plan in more depth here.
"n the end, the reason I support Schwarzenegger's plan is because it includes insurance company regulation, and in particular because it enforces community rating (i.e., a requirement that insurers accept all comers at the same price, regardless of age, occupation, or medical history). And while I can't back this up with a solid argument, my gut tells me that community rating will eventually put private healthcare insurers out of business. Even with universal coverage, there are just too many contradictions in trying to run a profit-making insurance company while being forced to insure even people that you know for an absolute fact you're going to lose money on.
I might be wrong about that. Insurance company managers are clever folks, after all, and might very well figure out how to game the system just well enough to stay around. But there's at least a chance that Schwarzenegger's plan will lead to their eventual demise, and thence to a more efficient, more rational healthcare system. For now, that prospect is enough to get me on board."
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