California Health Insurance Reflects National ConcernsMarch 2008
Governor Schwarzenegger's attempts to restructure
California health insurance may have failed, but his effort, his plan, and the factors that contributed to his failure are drawing parallels with our national health care situation.
Schwarzenegger's plan would have required state citizens to obtain medical coverage. But, sensitive to the costs of health care today, it also offered alternatives to those who can't afford it.
For example:
- Residents with incomes up to 250% of the federal poverty level would have received state subsidies for California health insurance coverage.
- Residents with incomes up to 400% of the poverty level would have received tax credits to ensure that
health care premium costs do not exceed 5.5% of their incomes.
- Insurers would have been prohibited from denying coverage to residents because of pre-existing medical conditions.
A ballot measure that would have provided funding for the proposal also included an employer requirement to contribute to health coverage in amounts ranging from 1% to 6.5% of their payrolls, depending on the level of payroll, as well as a cigarette tax increase and fees on hospitals.
So why did Schwarzenegger's California health insurance plan fail? Mostly because of the tremendous state deficit faced by Californians in coming years. With such a huge bill on their plate, state lawmakers couldn't justify paying even more for state health insurance, even if they wanted to.
And it's this parallel that's attracting a great deal of attention on a national level. Schwarzenegger's plan is very similar to plans that have been touted by Hillary Clinton and Barack Obama. And John McCain has shown interest in offering tax incentives to make medical coverage more affordable. But the record national deficit is a large roadblock to any health care reform that will cost taxpayers any more than they are already burdened with.
Facts on:
California Health Care
Did you know...
More than 47 million Americans live without health insurance, and millions more are under-insured and don't know it?
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What will happen? No one knows just yet, but Schwarzenegger isn't taking his failure lying down. He plans to reintroduce his insurance plan some time in the next 3 years, after he's managed (hopefully) to bring down the state deficit.
This might mean that we shouldn't hold our breath for a universal health care plan just yet. In the mean time, consumers need to keep shopping around aggressively for an insurance plan they can afford and that still protects them when they need it most.
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