Calif. Chamber against universal health care
State Sen. Sheila Kuehl, who represents Santa Monica in Sacramento, is leading an effort that would guarantee healthcare for every Californian.
Kuehl’s bill would provide free coverage to every resident of the state, mainly by raising income taxes roughly 3 percent. Under the plan, insurance co-payments, deductibles and insurance premiums would be eliminated entirely.
“The whole health care system is unraveling pretty rapidly,” Kuehl said in an interview Monday. “We’re headed for a high storm.”
Local politicians appear to support the bill. Councilmember Bob Holbrook and Mayor Pro Tem Kevin McKeown sponsored a request that went before the City Council Tuesday that would voice the city’s support for the bill to state legislators and Gov. Gray Davis.
City Council members say they support the bill because it is a “universal coverage” plan and would cover all residents. Councilmem-ber Holbrook said the plan would give the state bargaining power to buy prescription medicines in bulk, similar to drug-purchasing methods used in Canada.
“The Americans pay more for prescription products than anywhere in the world,” said Holbrook, who works as a pharmacist at the University of Southern California. “People who have fixed incomes are really hurt by the high costs.”
“The Americans pay more for prescription products than anywhere in the world. People who have fixed incomes are really hurt by the high cost of prescription drugs.” — — BOB HOLBROOK City councilmember
Holbrook said he and his wife pay about $200 a month for prescriptions, even without any major illnesses. Without insurance, Holbrook said that cost could reach $600 or $700 each month.
Nearly 22 percent of Californians — or 7 million people — are uninsured, according to Peter Warren, spokesperson for the California Medical Association. Currently, 15 to 20 percent of insurance premiums cover the costs of providing service to the uninsured, Warren said “We all see the higher healthcare costs in our personal budgets,” said McKeown, who added that the cost of health coverage has been at the center of countless local issues. “(This bill) really hits the heart of the problem.”
But not everyone is excited about Kuehl’s bill.
Warren said the CMA is backing a separate bill, sponsored by state Sen. John Burton, which would mandate that employers “pay or play” for their employees’ health insurance. Under a pay or play arrangement, all companies are required to either offer employees health insurance or pay into a fund that provides affordable insurance for workers.
Warren added that one of the reasons the CMA does not support Kuehl’s bill is because they feel Burton’s bill is less controversial and therefore more likely to pass.
Holbrook said many pharmaceutical companies are against Kuehl’s bill because it could cut into their profits. Business groups have also come out against it.
California businesses are already feeling the strain of workers’ compensation costs, unemployment insurance taxes and the stagnant economy, said Richard Costigan, vice president of government relations for the California Chamber of Commerce.
Instead of a universal coverage plan, Costigan said the chamber recommends offering tax cuts for doctors and for businesses that offer healthcare coverage. The chamber also suggests creating a voluntary, low-cost health plan.
“We respectfully disagree that (the bill) would be cost savings,” Costigan said.
Kuehl acknowledged that the bill constitutes a “major, major reform” and said it could be years before it goes into effect.
It is scheduled to go before the state’s Insurance Committee on April 30. If it passes, it will go on to the Revenue and Tax Committee and finally to the Senate floor in May or June, said Sara Rogers, Kuehl’s spokeswoman.
Rogers said the bill is aimed at reducing administrative costs in the state’s health care system. Currently, private healthcare providers in the U.S. spend as much as 30 percent of their income on administrative functions, while European countries spend as little as three percent, Rogers said.
Under Kuehl’s bill, Rogers said only five percent of revenue would be spent on administrative functions.
The plan would be paid for by increasing income taxes by anywhere from 2 to 3.6 percent and incremental hikes on alcohol and tobacco taxes, Rogers said. Additionally, employers would be required to pay a certain percentage in taxes that would go toward the system. Individuals making less than $10,000 would be exempt from the tax and upper-class earners would only be taxed on the first $200,000 of their income.
At $5,000 per patient per year, the United States currently pays more for health insurance than any other country in the world, Rogers said. Switzerland comes in second at $2,700 and Canada third at $2,000.
Rogers stressed that the proposed plan does not constitute socialized health care because individual hospitals, doctors, and other providers would remain private. Under the plan, Californians would have their option of visiting the primary care physician of their choice. Everything deemed “medically appropriate” by doctors would be covered under the plan.
Originally published in the Santa Monica Daily Press print edition on April 9, 2003. Read the original PDF.