"Year of Health Reform": Take Two: Lessons for the Next Attempt
Senator Sheila Kuehl
May 8, 2008

It's been over a year since Governor Schwarzenegger decided to join the decades-long debate on health reform, and I'm actually quite pleased that he's indicated he will continue to focus on health reform in the years remaining in his administration.  It may not have been clear to the Governor, but we always knew that the sheer magnitude of the needed reforms would take more than just one year to achieve.  Any success to be gained on his "second try," however, will require a very different approach, both in terms of policy and in terms of politics.  

Predictably, a number of interests in Sacramento have attempted to characterize the failure of the Governor's and the Speaker's bill as the victim of uncompromising single payer proponents on the left and powerful insurance companies on the right, as though the Governor's plan was "just right" in a three-bears, middle of two-extremes, spin.  In fact, the Governor's plan appropriately fell because of the Governor's own reluctance to make the difficult policy decisions necessary for the plan to be in any way affordable to the state as well as to businesses and individuals, but which would have stirred up strong opposition from insurance companies.

Simply put, insurance companies will not support any plan that would prevent them from continuing to raise premiums 2-3 times faster than wages, limits that must be imposed in order for any long term financing to work.  In the positive column, the Governor's plan included a number of reforms needed, if insurance companies were to be retained, that would have regulated (read wrestled) them into good behavior.  It required insurers to accept all patients, to spend a minimum amount on actual care, and to refrain from singling out sick patients for unaffordably high premiums.  

Unfortunately, it contained nothing that would have made premiums affordable for the vast majority of Californians, all of whom would have been required by the law to buy health insurance.  The "subsidies" contained in the plan were only for very low income families (not a bad thing) and, except for those at the very poor end of the scale, would have partially subsidized premiums but left families to pay whatever co-pays and deductibles were set by the companies.  

It's also worthwhile to refresh everyone's memory that labor unions and health care advocates who ostensibly "supported" the Governor's compromise plan did not register a support position with the Senate Health Committee, but rather indicated they supported the bill only if it were amended.  The requested amendments, which were lengthy and substantive, were rejected by the Governor and the vaunted "support" was actually no support at all.

(If you are interested in seeing the support if amended section of the health committee analysis, go to http://www.leginfo.ca.gov/pub/07-08/bill/asm/ab_0001-0050/abx1_1_cfa_20080125_153139_sen_comm.html  It's a very long analysis, and the support if amended section begins on page 94).

If there is any clear lesson to be gained, it's that any large reform (single payer or other) must directly take on the insurance companies and must protect consumers against skyrocketing premiums and out of pocket expenses.  Anything short of that is fatally doomed, both politically and in practice.

On the Recent Field Poll

A recent Field Poll has been characterized, by the sound-bite pundits, as concluding that a majority of Californians would have supported the "major provisions of his proposal".  This is a mistaken conclusion.  First, it assumes that the Field Poll questions presented the major provisions of the plan, both pro and con, which it did not.  The poll did not ask, for example, whether respondents favored mandating individuals to purchase private health insurance without limiting how much premiums could grow each year.  This means that the poll results regarding the Governor's plan are of limited use in assessing how respondents would have voted had the proposal been brought to the voters in a statewide election.

Interestingly the same Field poll showed that the California Nurses Association have the highest favorable rating for their role in the debate, a great deal higher than any other person or organization involved.   The nurses are rightly seen by the public as fighting to protect the interests of patients, which, in this debate, involved opposing the Governor's plan and explaining why single payer meets the needs of consumers and the state without the problems raised by the Governor's plan.

Even as the Governor tiptoes around offending insurance companies, the Field poll reveals just how much the public is fed up with them--no surprise considering their recent legal troubles for rescinding coverage when patients get sick as well as systematically improperly denying needed care.  Couple these transgressions with the steady gutting of benefits and increasing of cost sharing, all the while grossly inflating premiums, and it's easy to understand the public outrage.  While insurers pretend they are taking these actions in order to contain costs, they have been painfully slow to take those steps that have been proven to improve health outcomes and save money, like chronic disease management, preventive medicine, and investing in health information technologies.  

What has not been widely reported is that the Field poll actually found significantly diminished support for employer sponsored health insurance, and lower support for "individual responsibility" since the last poll in 2006. In contrast, the poll documented a surge of 9 full percentage points in support of "Government Provided Health Care", which is one of the more unfavorable descriptions of single payer, and which does not even present the fact that, under single-payer, health care would continue to be privately delivered, while being funded publicly through premiums shared by government, employers and individuals.  

Most importantly for us, the Field poll shows that the investment by single payer advocates in steady community organizing and education is paying off big time.  Since 2002, universal health care advocates have rallied around Senate Bill 840 (Kuehl) the California Universal Health Care Act.  These advocates have formed the OneCareNow coalition, made up of hundreds of supporting organizations around the state.  The coalition has prioritized community education about universal health care and sponsored hundreds of public educational events throughout the year, and they are just getting started.  

The unmistakable trend toward single payer is documented by other polls, including a recent survey of U.S. physicians that found a 10 percentage point jump since 2002 in support for government legislation to establish national health insurance.

There you have it.  Two years of health reform with the Governor in the spotlight has resulted in a 9 percentage point jump in favor of single payer and diminished support for other policy options.  Single payer supporters have always known that the more people think about health reform, the more they support single payer.  We are winning.

Major Surge in Support for National Health Insurance among U.S. Physicians,
New Study Finds: Solid majority support government legislation to establish national health insurance
April 1, 2008
Contact: Sara Rogers
(916) 651-4023
Sacramento

According to the new statewide poll by the Field Institute, released yesterday, the number of Californians who would prefer to receive their health care coverage "through the government" has risen by 9 percentage points since the last poll in 2006, and now stands at 31%, while those who prefer that individuals take responsibility for their own coverage dropped 6 percentage points to 20%, and those preferring employer sponsored coverage declined 4 percentage points to 38%,. "Government provided health coverage" was the only policy option showing an increase in support.

Since 2002, universal health care advocates have rallied around Senate Bill 840 (Kuehl) the California Universal Health Care Act. These advocates have formed the OneCareNow coalition, made up of hundreds of supporting organizations around the state. The coalition has prioritized community education about universal health care and sponsored hundreds of public educational events throughout the year.

"This poll shows that the investment by single payer advocates in steady community organizing and education
is paying off," Senator Kuehl said. "These advocates, working under the radar of most politicos in Sacramento, have played a big part in the fact that people's attitudes are changing very very quickly; I think we're closer than ever to universal health care in California."

The Field poll notes that, of all the major participants in last years health reform debate, Californians had far and away the most favorable view of the California Nurses Association, a lead proponent of single payer universal health care and SB 840 (Kuehl).

The field poll also documents the dramatic unpopularity of health insurance companies with 55% of respondents having an unfavorable view of the role they played in last years debate.

The poll also found that 88% of Californians are concerned with rising out of pocket costs for health insurance coverage, and that 81% of Californians are concerned that they will not be able to pay for all the costs associated with a major illness or injury – even though a large majority of these respondents have some form of health insurance coverage.

The poll additionally found that 67% of Californians believe that insurance costs should be shared by individuals, employers and the government, the precise funding sources identified in Kuehl's proposal.

"Californians want everyone covered, regardless of their health condition, they want everyone to pay something reasonable and affordable -- government, individuals and employers--and they don't want to worry about not being able to pay their medical bills if they get sick. Single-payer universal health care is the only proposal on the table that provides all these factors," stated Senator Kuehl. "The problems that Californians are experiencing with their health care are due to the fact that health care costs are rising 2-3 times faster than their wages, and all the insurance companies want to do is deny, delay and rescind."

Notably, the Field poll did not ask respondents if they were concerned that premiums were rising nor if they would support an individual mandate if the costs of premiums and out of pocket expenses were not capped.

Notably, the Field poll did not ask respondents if they were concerned that premiums were rising nor if they would support an individual mandate if the costs of premiums and out of pocket expenses were not capped.

The Field Poll follows a recent study published in the leading medical journal, Annals of Internal Medicine, which found that 59% of U.S. physicians now support government legislation to establish national health insurance, reflecting an increase of 10 percentage points from the 2002 study.

Major Surge in Support for Natiional Health Insurance among U.S. Physicians, New Study Finds
Sara Rogers
April 1, 2008

Sacramento – The call for publicly funded health insurance received a major boost Tuesday after
recent findings that a solid majority of U.S. physicians now support national health insurance,
according to a new study published in today’s Annals of Internal Medicine, a prominent U.S.
medical journal. Importantly, the study cites an overall trend of growing support among physicians
in favor of national health insurance across a broad range of specialties since 2002, when a similar
study was conducted.
The 2008 study found that 59% of U.S. physicians now support government legislation to establish
national health insurance, reflecting an increase of 10 percentage points from the 2002 study, at
which time 49% of physicians were in support. The increase in support for national health insurance
is mirrored by a decline in opposition among doctors, from 40% in 2002 down to 32% in 2008.
Support among doctors for national health insurance has increased across almost all medical
specialties, said Dr. Ronald T. Ackermann, associate director of the Center for Health Policy and
Professionalism Research at Indiana University’s School of Medicine and co-author of the study.
Dr. Aaron E. Carroll, Director of Indiana University's Center for Health Policy and Professionalism
Research and lead author of the study, commented: "Many claim to speak for physicians and reflect
their views. We asked doctors directly and found that, contrary to conventional wisdom, most
doctors support the government creating national health insurance."
California State Senator Sheila Kuehl, author of legislation to establish a publicly funded health
insurance system in California, cited the study as evidence that health care providers are unsatisfied
with private health insurance and are ready to support a system where health care is publicly funded
but privately delivered, similar to what she has proposed with SB 840.
“Physicians see, first hand, how insurance companies are dismantling the U.S. health care system in
terms of affordability, access and quality”, stated Senator Kuehl. “This study mirrors the steady
growth in support that we’ve been seeing among the public, generally, as well as nurses and other
health care providers. The public is way ahead of the politicians on this issue.”
Major Surge in Support for National Health Insurance among U.S. Physicians,
New Study Finds

Solid majority support government legislation to establish national health insurance

For Immediate Release:
April 1, 2008
Contact: Sara Rogers
(916) 651-4023

Single Payer: It's Time to Have Hope

By Sara Rogers, Consultant, Health

“Politically feasible” is just another way of saying that folks are scared to stand up to insurance companies.  I don’t accept that.  It’s time to take a stand for what we really want.  It’s time to have hope.  
- Senator Sheila Kuehl

SB 840 is alive and well in the Assembly Appropriations committee, much further along in the legislative process than it was in 2006, just before its historical passage out of both houses of the legislature and onto the Governor’s desk.  Legislative deadlines for passage out of fiscal committees aren’t until August 15th and, between now and then, grassroots organizing and education efforts are really taking off.  Every day, Senator Kuehl and her staff receive requests for presentations regarding SB 840, the truly universal healthcare bill.

On Sunday, January 27th and Monday, January 28th, the American Medical Students’ Association held their hugely successful third annual rally and lobby day in Sacramento, which included a day long training that drew nearly 400 med students from all over the state.  The fact that so many overworked medical students spent an entire weekend, even taking a rare day off from school, to advocate for single payer health care shows an unparalleled level of dedication and passion.  AMSA students give every single payer supporter hope and inspiration as they push for passage of the bill.

Single payer advocates are also busy preparing for a historical strategy summit taking place in Los Angles later this month that will bring together representatives from the broad coalition of organizations dedicated to bringing single payer to California. The summit demonstrates the unprecedented development of the organized and operational single payer movement necessary to bring universal health care to California.  It’s the kind of grassroots movement that has been largely absent in the history of health reform, and it’s just one example of the changing landscape of health care politics.

On that note, my “leisure” reading lately is a book called, One Nation Uninsured: Why the US Has No National Health Insurance.  It chronicles the 20th century’s long line of failed attempts at achieving national health insurance.  There’s an unmistakable pattern to each major attempt, in that there seems have been an attempt once every decade and, each time national health insurance is within our grasp, it is defeated with a capitulatory “compromise”.  

I couldn’t help but notice that, historically, the compromises are forged by the exact same powerful interests every time, working like scavengers randomly picking through the ideas of national health insurance, with little consideration given to whether any “reform” was actually going to improve the health care system for the average American.  

In fact, a century of such “health care reform” has brought our health care system to the point where it is deeply fragmented, unimaginably costly and the least effective system in the entire developed world at delivering either health or care.  I can’t help but wonder where we might have been in terms of universal health care had proponents not forfeited their goal quite so fast.   

Most striking?  The grassroots role that physicians repeatedly played in defeating national health insurance.  The American Medical Association functioned as an exceptionally effective grassroots movement that was embedded in every community across the nation.  They organized education and lobbying campaigns against universal health care, labeling their efforts as “protecting the public health”.  They hired PR consultants who admitted that they were attempting to label national health insurance as “socialized medicine” for the simple reason that Americans were opposed to socialism.   

The litmus test for “politically feasible” has historically been largely defined by where doctors, insurers, business and labor stood on the issue.  Throughout the last century, there was no grassroots group as singularly focused on the passage of single payer health care as the physicians and insurers were opposed to it.  That’s changed considerably, especially in California, as the 500 or so organizations that support SB 840 continue their evolution into an effective coalition that works tirelessly (and largely under the radar of many in Sacramento) to educate and organize Californians on universal health care.

More importantly, groups that traditionally oppose single payer, like physicians, are no longer unified against it.  The American College of Physicians made history last year in their endorsement of single payer and the California Medical Association includes a large and growing minority of members that strongly support single payer.  The American Medical Students Association has quickly risen to become one of the most passionate and inspired groups advocating for passage of SB 840.  Another powerful provider group, the California Nurses Association has gone “all in” for single payer and is working in much the same way for single payer as the American Medical Association once worked to oppose it.  Their dedication unites with that of organizations like Health Care for All – California, school employees, the League of Women Voters, retired teachers, and others who are deeply embedded in communities across the state.

The lesson that advocates of single payer should take from history is to observe how the AMA was able to defeat national health insurance through steady community education and organizing.  This is why single payer has the best shot, politically, as well as on a policy basis, for winning passage.  Only single-payer boasts the kind of unified and dedicated grassroots movement for something that makes large reform possible.  

In the midst of an unprecedented and inspiring presidential primary, the theme for 2008 is unmistakable - it’s time to have hope.  

ABX1-1 fails to pass in the Senate Health Committee
Senator Sheila Kuehl
January 29, 2008

PLEDGE TO CONTINUE WORK FOR TRUE HEALTHCARE REFORM
 
After an exhaustive hearing last Wednesday, praised by Democrats and Republicans alike for its fairness and depth, on Monday, January 28,  the State Senate Health Committee voted to hold, rather than pass, ABX11, a bill that most committee members characterized as flawed, but, nonetheless, a step forward in an ongoing process toward comprehensive healthcare reform.
 
After the vote, Senator Sheila Kuehl, Chair of the Committee, and author of a separate healthcare bill, SB 840, now moving through the Assembly, released the following statement:
 
There is no question that the Speaker and the Governor, as well as Secretary of HHS, Kim Belshe, worked diligently on putting ABX1 together.  However, after a ten and a half hour hearing last week, including a report by the Legislative Analyst's Office, revealed major flaws in the funding assumptions contained in the bill, I agree with the action of the Senate Health Committee in deciding not to move the bill to the Appropriations Committee and the Floor of the Senate for a later vote.
 
As Senators Yee and Alquist indicated in their statements, explaining why they could not now vote for this bill, the bill as it is currently written does nothing to protect working class and middle class people from being burdened, to the point of breaking, by the individual mandate that requires each Californian to buy health insurance without adequate protection against unaffordable premiums and escalating out-of-pocket expenses.  Furthermore, as Senator Steinberg reminded us, we must conclude, especially after seeing the report from the Legislative Analyst, this bill's proposed revenues and expenses do not balance out and will leave the state exposed to increasing deficit costs as well.
 
As Chair of the Senate Health Committee, I promise that California will continue to move on the issue of healthcare reform. All over the state, people are letting us know that they are fed up with seeing their health insurance premiums rise, their coverage drop and their out of pocket expenses increasing every year.  Just today, we heard from over 400 medical students in the Capitol to lobby for SB 840 that they simply want to be paid a fair reimbursement for the work they will do and who also don't want to be put in the position of trying to extract every last dime from patients who already pay for insurance.
 
We in the State Senate will continue to work with the Assembly, the Governor's office and with all stakeholders to put forward a healthcare reform plan that will go beyond fixing symptom after symptom and give the real cure: universal, affordable, choose-your own doctor, comprehensive coverage.

Last Essay for 2007
Senator Sheila Kuehl
December 17, 2007

This is my seventh and last essay for 2007.  As I write, the Assembly has just passed Speaker Fabian Nunez’ healthcare bill and it’s on its way to the Senate and a hearing in the Senate Heath Committee in January.  A number of people have called and emailed asking for my take on the bill and this essay will give some analysis.

Visit my website at www.sen.ca.gov/kuehl <http://www.sen.ca.gov/kuehl> to read my previous essays.  For those of you who received this essay by forwarding, it is written by California State Senator Sheila Kuehl.  If you wish to subscribe to receive these essays on a continuing basis, (no charge), please send an e-mail to Sheila.Kuehl@sen.ca.gov <mailto:Sheila.Kuehl@sen.ca.gov> , titled “subscribe”.  If you receive it directly and wish you didn’t…..send an e-mail to the same address, but title it “unsubscribe”.

“Giant Leap” for Health Coverage? Or for premiums...

The press has described the bill in breathless prose as a “giant leap” for health coverage.  Unfortunately, this is not quite the case, depending on who you are and how and where you work.  Each of the sections below will explain some of the provisions of the bill actually harmful to regular, working-class and middle-class families.  And it provides less help than advertised for poor families, as well.

Coverage for everyone?

The press characterizes the bill as “providing” or “extending” coverage to all but a few Californians.

This is a mischaracterization, nothing is “provided”.   Instead, all Californians would be required to buy insurance with no caps on premiums, no regulation of the cost of insurance or medical expense, no maximum deductibles, and no floor on how little coverage you can buy and satisfy the legal requirement. If you do not buy insurance within 62 days after the requirement kicks in, the Franchise Tax Board is authorized to collect premiums determined by the Managed Risk Medical Insurance Board by garnishment of wages or mortgage liens.

Your employer would be required to spend from 1% to 6.5% of payroll (depending on the size of the payroll) to buy insurance policies for employees.  Employees would be required to take the insurance and to pay whatever supplemental premiums, co-pays and out of pocket costs are not paid by the employer.  There are no caps on what the employee would pay, only for the employer.  There is a vague term about “hardship” letting people out of the mandate, but no definition is offered and, as in Massachusetts, if you are excused from the mandatory purchase of insurance, you simply have no insurance!

If your employer does not wish to spend 1% to 6.5% of payroll on your insurance, he or she must pay the same amount into a state fund, and employees of those employers will be required to buy their insurance through the state fund, again with no cap on premiums and no floor on coverage.

Is there at least minimum coverage required in the bill?

No.  For the State Fund, for those employers who choose to pay into it, the Managed Risk Medical Insurance Board will set the minimum coverage (what you get for your premiums, what conditions, services, treatments, are covered by your insurance), which will not appear in statute. For those who buy insurance on the open, private market, and those whose employers pay total or partial premiums for insurance chosen by the employer, as well as for self-employed folks, there is no minimum coverage in the bill.  One woman reported to me that she had a bare-bones, catastrophic policy and, upon being rushed to the hospital, received the bill for the ambulance ride that got her there, placed on her chest, as she was carried into the hospital.

How is the bill to be financed?

There is no funding in the bill.  Instead, there is the promise of an initiative, no language available yet, to tax cigarettes at an additional $1, $1.50 or $2 a pack, tax hospitals in order to draw down federal money which would then go back, to a great extent, to the public hospitals, and require employers to pay a portion of their employees premiums, as indicated above.  There is also a hope that the federal government will provide more money for children’s insurance.  Instead, of course, the federal government is cutting children’s insurance such that the California Legislature will meet in emergency session in January to disenroll children from Healthy Families.  Everything else would be paid for by premiums, co-pays and deductibles.

In addition, if the Director of Finance finds that the state cannot afford all the promises made in the bill, the bill goes away.  Or does it?  There needs to be clarification that, if the initiative fails, we’re not still stuck with an individual mandate to buy insurance.

But how do poor people fare.....today’s uninsured?

Better, but still a hardship.  Healthy Families coverage for children would allow those whose families who earn up to $40,500 for one adult and one child to be covered (children only) by state or federal money.  (federal cuts mean we already have to kick kids off this program, see above).  Since the bill allows all children, even those with undocumented parents, to be covered, but the feds won’t pay for those children, there will be increased state costs in Healthy Families.  (see budget discussion below)

Families whose income is at or less than $43,000 for a family of three would be “subsidized” for their premiums only.  This means they would be required to pay an unspecified amount for premiums and receive an unspecified amount from the state budget to help.  There is no subsidy for co-pays, deductibles or out of pocket (uninsured) expenses associated with their policies, which could be sizeable if they bought a minimal policy.

Families who earn between $43,000 and $68,680 for a family of three would be allowed to pay full boat for their uncapped premiums and then deduct any part of the premium that exceeds 5.5% of their income as a tax credit, refunded dollar for dollar by state money.  (again, see budget discussion, below).  There is no tax credit for their required co-pays, deductibles or out of pocket (uninsured) expenses, which could be big if they purchased a minimal policy.

But insurance companies would be required to take everyone

That is correct.  However, they are allowed to offer minimal coverage set by the Managed Risk Medical Insurance Board (minimum coverage that may be offered is not specified in the bill) and there is no control over their premiums or deductibles.

In addition, they are allowed to adjust their premiums, not by medical condition, but by age and other demographic factors.

The companies are required to spend 85% of premiums on care, but they maintain they do that now, and count marketing, information technology and other kinds of administrative overhead as “care”.  The bill would allow this characterization to continue.

Unions seem to like the bill, don’t they?

Well, some of them.  SEIU, who has organized and hopes to organize healthcare workers is positively salivating over the bill, to the extent that their national leader, Andy Stern, is engineering moving out the current state leader, who has questioned the bill, in favor of a new leader who will go along with it.  AFSCME has also come on board with the bill, thinking that public employees will benefit.  (However, with all the hits the bill brings on the state budget, this may be short sighted).  About half of the unions in the California Labor Federation are with it, and half are against it but not taking a firm position.  The California Nurses, the California School Employees and the Teamsters, among others, are strongly in opposition.

Many other troubling sections in the bill. (1) rescission

While we are struggling to keep insurance companies from rescinding policies of beneficiaries who do nothing wrong except try to use their insurance, the bill takes a step backward by applying the “no retroactive rescission” language only to HMO’s and not to all insurers.

Troubling (2), no choice of doctors or hospitals

Your insurance company tells you who is in their provider network.  Employers are not required to give a range of choices.  The state fund would give a range of choices, as soon as they are determined by the Managed Risk Medical Insurance Board.

Troubling (3), more unsupervised healthcare workers

Nurse Practitioners and Physician’s Assistants would be allowed, by the bill, to give written instructions (not personal supervision) to medical assistants in retail clinics, such as those proposed for Wal Mart, and the assistants would be allowed to give medication.  Currently they can do so in specific clinic settings.  The bill removes this requirement.

So, what’s next?

The bill goes over to the Senate, into the Senate Rules Committee, which then refers it to the Senate Health Committee and any other committees that should hear it before it goes to the Floor.  There may be a hearing on the bill in Senate Health on January 16th, but only if the language of the bill is in its final form according to its author, the Speaker, the requested analysis of the impact of the State Budget by the Legislative Analyst’s Office is complete, and the Committee also has the language of the proposed initiative that will, supposedly, fund the bill.  Any organizations wishing to support or oppose the bill may send their letters to the Senate Health Committee in Sacramento.  The bill may be read online at www.leginfo.ca.gov <http://www.leginfo.ca.gov> .  Press the button for Bill Information and type in ABX1 1 and click on what comes up.  The author is Speaker Nunez.

Senate Floor Statement from Senator Sheila Kuehl
Re: Assembly Bill 8
9/10/07

Mr. President and Colleagues:

As you know, I have been working to secure real healthcare reform in California for a number of years now.  Along with my continuing authorship of SB 840, the single payer universal health care bill, I’ve also actively participated with other authors trying to craft incremental attempts to reform the health insurance market. 

This year, as the chair of the Senate Health Committee, I’ve seen my mission as making certain that everything got appropriately vetted and discussed, while at the same time, continuing to build support for 840.  Activists, supporters, organizations, and the panoply of more than 700 organizations, those that the press refers to as the “grassroots”, have done a magnificent job in building support for single payer.

This year, as I watched leadership and the administration try to craft a plan different from SB 840, an alternative health reform plan that might expand coverage this year, while preserving the role of insurance companies, the experience taught me why health reform has actually been so difficult to do over the past few years, and why every proposed solution just seems to bring out new and often even bigger problems.

The attempts fail because, until we squarely face the fact that premiums imposed by the insurance companies are rising 3-4 times faster than wages every year, all the reforms that keep those insurance companies firmly in place are doomed to failure.  The same is true of AB 8, which we are considering today.

As currently drafted, it doesn’t pencil out in terms of money, it doesn’t pencil out in terms of who’s paying what, and, frankly, it definitely doesn’t pencil out for consumers.

Our failing health care system has often been compared to the Titanic, and I’ve said in the past that attempts at reform are nothing but attempts to rearrange the deck chairs.  AB 8, for a change, is actually trying to turn the boat.  But some of you may know that, in fact, had the Titanic faced the iceberg head on, it would have survived, at least long enough to save most of its passengers.  Turning the ship only partially was actually its downfall.  It’s clear to me that that is also the problem with AB 8.

Our health insurance company driven system has responded to runaway health care spending by dismantling the entire system.  The only questions they ask are “How many people can we turn away; how many of our clients can we kick out, how many people can we underinsure?”  Rather than working to contain spending in a patient centered manner, they’ve created huge profits for themselves by raising premiums, cutting benefits, and limiting access in countless ways.

So the governor was quite correct to say “Let’s have a year of health reform.”  Unfortunately, however, it became more of a Year of Magical Thinking, with apologies to Joan Didion for stealing her title.  All the Governor has really done is to say, “I am sure we can solve this in nine months.  Let’s hurry up and do it”.

To the credit of the authors of AB 8, they have worked and worked to try to do a good bill within the context of keeping the insurance companies in place.

They have said we will cap what employers have to pay and we will cap what employees have to pay.  What remains uncapped are the premiums that the companies can charge for all this reform.

We have been told there is no individual mandate in this bill, but that is incorrect.  If an employer pays into the pool, as their choice of how to spend their 7.5% of payroll contribution, then their employees must buy insurance from the pool.  Only if the healthcare costs of those same employees would exceed 5% of their gross income can these employees be let out of the requirement to buy it, and what happens then?  They are simply either uninsured or they can “choose” to pay the inflated premiums that might be heaped on them.  For those employees whose employer puts 7.5% of payroll into insurance for his or her own employees, those employees are then required to”take up” the employer’s insurance offer.

And again, if “accepting” the employer’s insurance plan will cost them more than 5% of their wages, they don’t have to take up the offer which means they’re not going to be insured either if they can’t afford the higher premiums.

The bill has come a long way, even since it went through the health committee, and I can understand why many of the unions are now in support of the bill because of the affordability provisions added to the bill.

But there are still also major problems with the coverage provisions. Your employer might offer you a plan that costs you a little bit less than 5 % of your gross income for the year, and you would have to buy it, but it might not cover what you need. It might be a minimal plan, a catastrophic plan.  It might not have the drugs that you need for the condition you have - for cancer, for AIDS, etc.  As we’ve seen in the last few months, it might not even cover pregnancy.

AB 8 also has an entirely separate insurance pool for an undefined group of people with “serious” conditions.  We don’t know if that’s chronic conditions, we don’t know who will be in that pool.  And frankly there’s no protection for them in terms of what they might have to pay.

So I see a number of real flaws in this much improved bill.

I continue to believe that the movement that’s been building for single payer, a movement that has seen support for a single payer universal healthcare system more than double over the last six months alone, will continue to build in ’08 in‘09 in 2010.  Then, with a new governor, perhaps there might finally be a chance to get a signature on the bill that is actually the best solution for businesses, for employees, and for all the people in California.  Because if you take the insurance companies out of the system, and they are the only entity that adds no value at all to the provision of healthcare, the overall costs for healthcare in California drop $19 billion in the first year alone, simply because we’re finally not paying their inflated overhead and profit.

So I am a no vote on this bill.

I praise those who have been working on this bill for trying.  But I encourage those who believe this bill is deeply flawed to join me in voting no.

I know that my colleagues on the other side of the aisle have problems different from my own and will not vote for it.  For those who will vote for it on my side, I understand you are voting your hopes.  Many of you also have told me you know that 840 is the only real solution. 

So I’m also asking you to stay with me on SB 840; it’s not going to the Governor for a veto.  Next year we’ll continue to develop it, hold it up as the right standard for California, and work with everyone we can, until the day when we understand that facing the iceberg head on is the only way we are going to save everyone on the ship.

Health Reform and the Year of Magical Thinking
by Senator Sheila James Kuehl
August 31, 2007

The Year of Magical Thinking is the title of a memoir by Joan Didion detailing her state of denial, inexplicable behaviors and, finally, coming to grips with, the death of her husband. It’s also an apt description of the Governor’s 2007 approach to reforming our broken healthcare system, with the glaring difference that he still hasn’t come to grips with the truth. (After all, if a complicated movie plot could be resolved in less than two hours, why not fix healthcare in California in nine months?)
 
Beginning in January, the Governor ordered his health advisors to sketch the outlines of a plan that would magically “cover” all Californians by simply requiring them to buy health insurance.  To this moment, he has refused to negotiate any of his major points with the Legislature.  The language for his plan was finally drafted five months later, and shown, under wraps, to a few, select people.  Not one legislator agreed with it, and no one would carry the bill as legislation.  
 
To fill the void raised by the Governor’s magical “we must do something this year” drumbeat, the Democratic leaders began crafting their own reform plan.  To date, however, the Governor and the Legislative leadership have remained oceans apart on the broad policy strokes of health care while public support for the current insurance-company controlled system has plummeted and support for the reforms contained in SB 840, the Medicare-like fix for California, has grown.
 
Now, with less than two weeks remaining in the first half of the two-year legislative session, there is still no “something” on the table and the Governor, like a Barnum and Bailey’s ring leader, continues to announce that he will, assuredly, pull a rabbit out of a black hat.  Actually, there is no way of knowing if the result would really be a rabbit; it could just as easily be an albatross.
 
The Governor has further limited discussion by announcing that he would veto both of the legislative proposals that have actually been introduced as real bills. SB 840, by far the most carefully crafted, transparent and fully vetted bill, will remain in the Legislature until next year, since sending it down to him for a veto would end any consideration of single payer until 2009.  The individual mandate provisions in the Governor’s pronouncement are being emphatically rejected by virtually all stakeholders representing the people who would be forced to pay uncapped premiums.  The percentages to be paid by employers and individuals, hospitals and doctors, people in a “pool” and those outside, those above differing percentages of the poverty scale and those below, are so far apart in the Governor’s pronouncements and the Speaker’s bill, you could drive trucks through the gaps.  The Governor’s lynchpin financial mechanism of a provider tax remains submerged under the very murky water of a 2/3 vote.  What convoluted compromise might be devised in a last-minute attempt is anyone’s guess.
 
Nonetheless, we are told that, unless we agree to pass a yet-to-be hastily drafted bill that incidentally may be the biggest reform proposal ever attempted in health care, and pass it in two weeks, thus completely bypassing the entire political process and any semblance of open public input, we’ve completely failed and health reform is doomed forever.  Please.
 
The prospect of legislative staff, sitting behind closed doors, hastily crafting a 100-page health reform “compromise”, to be pushed through the legislature with little or no public input over the course of the next 14 days, is deeply irresponsible.  Frankly, given the example of the energy deregulation bill, we ought to know better.
 
Moreover, we lose nothing by taking advantage of the fact that the sessions of the California legislature are two year sessions.  Many of our major accomplishments, most recently, AB 32, the bill related to greenhouse gas, took more than one year to achieve.  Next year’s Presidential campaigns will ensure that health reform stays as the top of the agenda.  More importantly, the issue of health reform will continue to dominate because the people need it and want it.  What they want, and deserve, however, is responsible health reform, not a new debacle that benefits the health insurance companies the way the electricity bill benefited Enron.
 
Finally, we must not forget the reason that we are in this crisis to begin with.  Health care premiums changed by insurance companies continue to grow 3-4 times faster than wages.  A solution is needed that pays attention to adequate funding, affordability, cost controls and quality.
 
Even if the Legislature should pass a last minute convoluted experiment in health reform, there will still be a need to continue the work to enact a fully vetted, Medicare-like single payer system that replaces the insurance companies with a plan for all Californians, allows each person to choose their own providers, and protects affordability, comprehensive coverage and quality.  Such a solution is the only sensible and tested way to achieve universal health care responsibly.  Whatever happens in the next two weeks, the movement for single payer universal health care is continuing to grow, and SB 840 will continue as its focal point, the only legislation that establishes the kind of truly universal, modern and affordable health care system the people of California need and deserve.

California Speaks:  We Want Single Payer
by Senator Sheila Kuehl
August 17, 2007

On August 11th, 2007, at the culminating and boisterous OneCareNow rally in Los Angeles, as well as eight coordinated “listening” events around the state, sponsored by Blue Shield and the California Endowment, among others, a random selection of thousands of Californians spoke out overwhelmingly in favor of major health care reform. 
 
At the largest rally of the year, more than two thousand advocates, patients, nurses, doctors and universal health care fans gathered on the steps and lawns of the Los Angeles City Hall to excoriate a health care system that does nothing but devastate working families with systematic cancellations, denials and delays in care.  This doesn’t promote health, it isn’t care, and it certainly isn’t a “system”-- it’s traumatizing and often deadly for people who thought they would be given care, but, instead, got nothing but a tangle of insurance red tape.  Convinced that single-payer universal health care is the only hope for fixing our broken health care system, they gathered to support SB 840 (Kuehl), the only truly universal health care plan proposed in legislation that is shown to contain costs, improve health care quality and allow Californians total choice of their doctors and hospitals. 

Perhaps by design, on that same Saturday, health care foundations (including Blue Shield Foundation, Kaiser Family Foundation and the California Endowment) spent over $4 million on an event originally spun as an exercise in "deliberative democracy", but in reality was carefully structured to control discussion, in order to ask randomly selected participants to discuss and “vote” on their preferences for healthcare reform.

Naming the event CaliforniaSpeaks, organizers claimed the event would bring together thousands of Californians to discuss their perspectives on the current health reform proposals still under debate in Sacramento, yet the agenda was careful to exclude single payer from the discussion.  Organizers of the event told us the reason that they didn’t include single payer was because the governor said he wouldn’t sign it. 

Apparently when they said the event was designed to give Californians the chance to set the health care agenda, what they actually meant was that the event would be an opportunity for the people to jump in line with the Governor’s healthcare agenda.  As is often the case, the people had a different idea—they did, in fact, jump; they jumped out of their seats demanding that single payer and SB 840 be included in the discussion, forcing the organizers to tack the issue on at the last minute at the end of the day. 

The fact that participants were forced, on their own accord, to demand the inclusion of single payer at the CaliforniaSpeaks events clearly indicates that the conventional political message, mostly propagated by the health insurance companies, has yet to understand that two decades worth of traumatized patients and families, along with an even higher consciousness of our failings set out in Michael Moore’s new film, “SiCKO”, has changed health reform politics forever.  Consider the overwhelming standing ovation that Steve Skvara received (add link - http://www.youtube.com/watch?v=C5SSyS5n6U4) at last Tuesday’s Democratic Presidential Debate when he asked, chocking back tears, “What’s wrong with America?”, describing how his family lost their guaranteed retiree health coverage when the company who owed it to him filed for bankruptcy.  Skvara’s story immediately resonated with millions of Americans across the nation, and he became an instant online celebrity.  Why?  Because he clearly illustrated our broken health care system and the abuses of corporate greed.  Skavara’s story is one of thousands that are positioned to spark the simmering anger that a broad spectrum of Americans feel toward our insurance based non-system.  

California families are becoming so hurt and so incensed at insurance company greed and abuse that they are increasingly willing, like nurse Cynthia Campbell’s husband, to pick up a megaphone and plead “Don’t Kill My Wife” in front of Blue Shield’s headquarters.  And the transformation crosses the political spectrum.  Art DeWerk, the Police Chief for the central valley town of Ceres, spoke out recently in favor of single payer as he described the helplessness he felt after his wife was unable to get timely access to routine medical care as she battled cancer. 

These and other stories are found all too often in a health care system where the only competition is between insurance companies focused only on how much risk they can avoid, instead of the more appropriate competition between direct health care providers for quality service, driven by a single payer system that allows total patient choice of doctors and hospitals. And stories like those set out above, as well as others, even worse, will continue until we ditch the “system” that spends 30% of every health care dollar simply to weed out those of us who are sick enough to need our coverage and move to a real universal healthcare system that eliminates the middleman and returns decision making in healthcare to doctors and patients. 

By the end of Saturday’s “listening” event, after everyone had discussed the intricacies of the incremental plans, single payer surprised the organizers by polling better than the others, with significantly more people saying they would support it under any condition.  For those who supported a generic single payer system, but with conditions, SB 840 was, in fact, the only plan that actually met all the conditions set out by the discussants.  For example, 53% of the participants statewide said they would support single payer if they could choose their own doctors and hospitals.  SB 840 guarantees this.  In contrast, both mandates which define the Governor’s policy paper and the Speaker of the Assembly’s bill, AB 8, received support by the discussants only if there were caps on costs and premiums.  In fact, neither proposal currently includes this provision. 

Both the rally in Los Angeles and CaliforniaSpeaks showed us that the people of California are way ahead of the Governor, as well as the Speaker, with regard to healthcare.  At the end of the day, more participants felt that quality of care shouldn’t depend on how much money you have, that everyone should have access, and that greed should be kept out of the health care system. 

Interestingly, and perhaps tellingly, later that same day, the Governor was quoted on a Fresno news station as saying he would sign SB 840 “as soon as we have the money for it”.  Of course, the Lewin Report, studying the factors set out in the bill, has already shown how the plan will be funded.  But, whether the Governor’s pronouncement signals a serious shift in his thinking, it certainly acknowledges the political momentum that SB 840 has garnered.  I welcome the conversation on funding, because we’ve got the money.  SB 840 can easily be achieved with our current health care spending, personal, employer and state and federal.  It would use the money wasted by the insurance companies on denying care to provide it, to all Californians, without co-pays or deductibles, for one affordable premium each year.  What we need is the political will to catch up with the will of the people of California.

Press Release, June 6, 2007.
SB 840 Passes Senate Floor, heads to Assembly Health

SACRAMENTO -- The California Universal Health Care Act, SB 840, which establishes a single payer universal health care system in California, passed the Senate Floor by a vote of 22-14 (final vote of 24-16 expected) and now heads to the California State Assembly.

SB 840 covers every California resident with comprehensive health benefits, contains the growth in health care spending, and provides patients with total choice over their doctors and hospitals.
 
“California is leading the nation on health care reform with passage of SB 840,” stated Senator Kuehl.  “This is the gold standard for health reform and the only way to achieve the kind of health care system that Californians want and deserve”.
 
Next Tuesday, Senator Kuehl, chair of the Senate Health Committee, will chair a legislative briefing featuring filmmaker Michael Moore and three witnesses who star in Moore’s upcoming film “SiCKO”.
 
Moore’s documentary is an up-close view of America’s crumbling health care system and what the health care crisis has meant in real terms for many insured Americans.
 
“This film will hopefully serve as a wake up call about the way that insurance companies are mismanaging our healthcare system”, stated Senator Kuehl.  “It shows that insurance companies don’t really want to improve care, they simply exist to avoid risk.  As a result the system doesn’t work for those who have any kind of medical risk.  Sooner or later that is every one of us.”

“Important documentaries like Michael Moore’s film lead people to want to get involved”, stated Senator Kuehl, “SiCKO supports the growing feeling in California that single payer universal health care is inevitable.”
 
The briefing will take place on Tuesday, June 12th from 12:00 pm-1:30 pm at the State Capitol Room 4203.  All media and press are invited to attend.  The briefing will be viewable at multiple locations around the capitol.

A rally, sponsored by the California Nurses Association, will take place at 2:00 on the West Steps of the Capitol.

Health care is breaking our hearts
By Sheila Kuehl
Sacramento Bee
April 23, 2007


Over the last decade, our healthcare system has become trapped in a continuous downward spiral: declining patient-care quality, unaffordable yearly jumps in premiums and reduced benefits. Insurance companies report record profits while salaries for primary-care doctors are largely frozen and hospital emergency rooms operate in the red. Every year we pay more, get less, and insurance companies make off with the difference. Our past efforts at reform are like a failed relationship that we can‚t seem to let go. We give up more and more in the hope that something will change.

But, by any measure, our health-care system gets deeper in trouble. There are 6.5 million uninsured in California. Our health-care spending takes up 15 percent of our gross domestic product, and it‚s growing much faster than our economy. That means that health care is much more expensive relative to our incomes. The growth in health-care spending is bankrupting our state, our businesses and working families.

California, it's time to move on with our lives. It's time we ask for what we really want and what we deserve: affordable, high-quality health care for all.

Real universal health care is demonstrably possible. SB 840 (the California Universal Healthcare Act), a bill I am carrying in the California Legislature, covers every California resident with comprehensive, affordable health benefits, and contains the growth of health-care spending while improving quality. Most importantly, it gives patients total choice of their doctors and hospital.

It works by consolidating the money we--employers, families and government--currently spend on health care. Everyone pays something in and everyone gets coverage--just one affordable premium--without co-pays or deductibles. This allows us to reduce the costs of administering our fragmented system from 30 percent of every health-care dollar down to 5 percent, a savings of $20 billion in the first year.

The plan also puts California's purchasing power to work by giving the state the ability to negotiate large discounts for prescription drugs and other health-related goods. But SB 840 is not a radical change for how care is delivered. The delivery system would remain fully private and subject to market competition.

This is the only plan that will bring California a truly universal, affordable and modernized health-care system.

Second Essay
Senator Sheila Kuehl
January 16, 2007

This is my second essay for 2007. After my first essay, delineating the four different proposals on health insurance coming to the California Legislature this year, I received several requests to further describe the Governor‚s proposal.

This essay sets forth the elements of his proposal, including recent changes described by his staff, which have not been reported in the press. Visit my website at www.sen.ca.gov/kuehl <http://165.107.32.93:7010/www.sen.ca.gov/kuehl%20> to read my previous essays.

Reality vs. Press Releases

The Governor has consistently described his proposal as "universal healthcare", promised it would cover all of California‚s children, and indicated that everyone---doctors, hospitals, businesses, insurance companies and consumers---would have "shared responsibility" in paying for the plan. The press has dutifully repeated his phrases, in almost every case without a modicum of analysis. The details of the proposal reveal quite a different picture.

The Bottom Line of the Governor's Proposal: Individual Mandate

The central basis of the Governor's plan is simply to mandate that every Californian must, by law, carry health insurance. There is no requirement that it be affordable and no minimum coverage. This means that the requirement can be met by a bare-bones policy covering only catastrophic events, with a $5,000 deductible and up to $7500 in out of pocket expenses for all the things that aren‚t covered by the policy.

This is not universal health insurance. Think for a moment about automobile insurance. Even before Prop 103 passed, limiting the amounts by which insurance companies could raise your auto insurance premiums to those approved by the Insurance Commissioner, we all had to have auto insurance. Would you call it Universal Auto Insurance? 25% of Californians don‚t comply --- so many that we all have to carry Uninsured Motorist Insurance, in effect paying more for those who are uninsured, just as the Governor has suddenly discovered we do in the area of healthcare.

His proposal would simply continue this problem in the much more complicated and important area of health insurance, with no controls on raises in premiums and no requirement for comprehensive or even adequate coverage, so every Californian could be required to pay high premiums, high deductibles, high co-pays and high out of pocket expenses, for very little coverage.

Employer Mandate only on 20% of California employers

Conservatives in the Legislature have focused fiercely on what they call an employer mandate. But the Governor's plan requires only those California businesses that employ 10 or more to provide minimal coverage to their employees or to pay 4% of their payroll into a central government fund, which would then subsidize the purchase of private insurance by their employees. Only 20% of California businesses employ more than 10 people. Of these, 80% are already providing some health insurance to their employees, at a cost of 9-11% of payroll. In a way, this is an invitation to businesses to reduce what they pay for health insurance for their employees. 4% of the payrolls of businesses with more than 10 employees would not be sufficient to provide healthcare for their employees. With a limit on what the businesses pay, but no limits on what employees pay under the mandate, even more of the premiums, co-pays and costs would devolve on employees than they do now.

Employees of businesses with fewer than 10 employees would be required, under the individual mandate mentioned above, to buy insurance for themselves and their families. Their employers would not be required to do anything.

Scope of Coverage Minimal

The Governor‚s proposal does not establish any minimums for the coverage benefits that must be offered. As a matter of fact, in a recent addition to the presentation of his proposal, the Governor called for more "flexibility in insurance underwriting" and repeal of "excessive government regulation". This means he would like to roll back even the most minimal requirements now in the law for coverage but still require everyone to buy policies and pay whatever premiums are charged.

This is not "cost-containment" as the Governor has indicated. This is actually allowing the insurance companies to sell inadequate coverage to those who wish to gamble that they won‚t need it, but are required to buy something to comply with the law.

Cost Containment Proposals

The Governor's proposal contains no real cost containment measures. It merely shifts the cost of unlimited premiums onto consumers. The proposal attempts to label the fact that he would allow insurance companies to offer greatly reduced coverage as "cost containment".

In addition to simply requiring less coverage, the Governor also proposes to limit insurance company overhead to 15%, mirroring a bill I carried last year which died under insurance company lobbying. This means that the companies must pay out 85% of their premiums to providers, which could help provide more adequate reimbursements to providers. It does not, however, affect the cost of healthcare.

Additionally, the Governor puts off seismic retrofit of hospitals again.

Low Income Californians

The Governor has indicated he wants to provide subsidies to help families with incomes below 250% of the federal poverty level ($32,000 for single parent with one child, $50,000 for family of four) fulfill their mandate to buy private insurance. They would pay up to 6% of their income for the coverage by law, which, for some, is significantly higher cost sharing than they might be paying now as Medi-Cal beneficiaries. Families with incomes slightly above the level would be required to buy insurance without subsidies.

Children

The Governor has indicated he would like to see all California‚s children covered by insurance. Under his proposal, families would be subsidized as described above, up to a certain level of income. Above that, children would be covered by the requirements on adults to buy insurance.

Guaranteed Issue

Many have praised the Governor‚s proposal to require insurance companies to cover all applicants, regardless of pre-existing conditions or prescribed medications. The proposal also indicates there would be limits on how much those with pre-existing conditions could be charged. It does not, however, address the fact that the insurance companies would likely raise their overall premiums to cover the new risks they would be required to assume.

Community Rating vs. Modified Community Rating

Related to guaranteed issue, in a way, is "community rating" because a strict "community rating" system means that everyone in a geographic area is taken into account in setting premiums and all in that area share the risk. Although it does prevent one person in a pool from shouldering the burden of their own condition, it is still a gentrified form of "redlining," as area residents in one location would all be in a pool.

The Governor‚s most recent explanation of this section of the proposal, however, could potentially exacerbate the problem by adopting a "modified" community rating system that would allow the private insurance companies to differentiate in premiums on the bases of age, gender and regionalized location.  A strict "community rating" system would not allow these differentiations, so, at the very least, some clarification is needed.

Medi-Cal Reimbursements raised to Medicare levels

Payments to doctors and hospitals would be higher if the federal government agrees to the raise. For all those not on Medi-Cal (California‚s coverage for the poor), however, there would be no requirements concerning the level of payments to healthcare providers made by private insurance companies.

Provider fees (or taxes, according to some)

Hospitals would be required to pay 4% of their gross revenues into the same fund as large employers to help subsidize insurance for the poor. Physicians would be required to pay 2% of gross revenues. Logically, this means that, should doctors and hospitals raise their fees to adjust for these taxes, the sick would be paying a disproportionate share of subsidizing health insurance for the poor.

Hospital Funds Redirected to Insurance Companies

The Governor's proposal takes most of the money now directed to hospitals to pay the costs of caring for the indigent and uses it to buy insurance for the indigent. Such a shift could actually lessen the money actually spent on indigent care as insurance company overhead is allowed, under the Governor‚s proposal, to be as high as 15%.  (In most companies, it‚s now as high as 30%).

Prevention, Health Promotion and Wellness

The Governor's proposal requires Medi-Cal, Healthy Families, health plans and insurers to offer a health benefit package that provides incentives for healthy behavior, such as gym memberships or Weight Watchers programs. It also proposes ways to improve health status and reduce risk factors in programs related to diabetes, medical errors, obesity and tobacco use.

What Happens Now?

The Governor's proposal is seeking a legislative author.  When one is found, a bill will be introduced, either in the Senate or the Assembly and will be heard by the Health Committee in that House, the fiscal committee, go for a Floor vote and start all over in the other House.  There will be heavy negotiation between the Speaker of the Assembly, the President of the Senate and the Governor as to any legislation to be adopted in this session.  At the same time, my single payer bill, SB 840, will be reintroduced and follow a similar, but parallel, track.

Stay tuned and stay informed.

Essay
Senator Sheila Kuehl
January 10, 2007

This is my first essay for 2007. It addresses the topic that seems to be on everyone’s minds, lips and agenda this year: healthcare.

These essays are my presentation of facts not generally reported or summarized by the press. Visit my website at www.sen.ca.gov/kuehl to read my previous essays. For those of you who received this essay by forwarding, it is written by California State Senator Sheila Kuehl.

First, A Few Factoids about California and Healthcare

One in five Californians has no health insurance at all and most of these people are average working people. Usually, their employer is one of the many who does not provide healthcare coverage and they don’t make enough to pay for an individual policy for them and their family.

Of those Californians who do have insurance, many are underinsured and are very surprised to discover that their insurance doesn’t cover a large chunk of their costs if they get sick or injured. In fact half of all the personal bankruptcies in America are caused by medical costs and three-quarters of those bankrupted had insurance at the time they became ill or injured.

People are also very worried about losing the insurance they might get at work because employers are, more and more, cutting back on health insurance and other benefits and, of course, losing or changing your job means losing your insurance.

Plenty of money is being spent on healthcare-one out of every six dollars spent in America, it’s just not spent to cover everyone. And, while spending generally has risen by 7.5%, insurance premiums have gone up by double-digits every year for the last five. Wages have increased only 1.7%. Costs are getting shifted to patients and physicians are not getting reimbursed for their work.

In order to save money, insurance companies deny claims and treatments, narrow provider networks, exclude more and more people for “pre-existing conditions” or because they take certain kinds of prescription drugs (most of the most popular ones) or work in a particular field.

A Field Poll commissioned by the California Wellness Foundation revealed that 80% of Californians want the government to guarantee access to affordable healthcare coverage. When asked why healthcare costs are increasing, the majority pointed to excessive insurance company profits, followed by waste, fraud and inefficiency.

Four Healthcare Plans In Legislature

Finally, this year, healthcare is getting a lot of attention in Sacramento. As Chair of the Senate Health Committee, I am committed to working with all stakeholders: the Governor, the Legislature, medical professionals, labor, business and consumers--to work out whatever incremental reform measures can be developed for this session, at the same time as the Legislature and I continue to work on the universal healthcare bill I have authored for the past four years.

In February, I will reintroduce the most comprehensive solution to the current health care crisis, Senate Bill 840. SB 840 is the only proposal that establishes universal, affordable, comprehensive health insurance for all Californians and that guarantees the right of each patient to choose his or her own doctor. SB 840 replaces insurance companies with a state-wide trust fund that collects premiums paid by employers and individuals, sharing the responsibility for funding. This reduces the administrative portion of California's healthcare costs from nearly 30% to under 10%. With everyone in one risk pool, no one is denied coverage for a so-called pre-existing condition. Consumers are free to change jobs; start a business; go to school or start a family without losing the doctors they trust. The Governor says currently that he will not sign a universal insurance bill. Nevertheless, the Legislature will continue to develop the plan as the only long-term, universal solution to the health crisis that is going to quickly outgrow any short term incremental reform.

There are three other developing short term plans to be considered this session. Each has its virtues and a number of problems. The outstanding questions that must be resolved by any meaningful short term reform proposal are: will middle-class consumers who cannot now afford health insurance or qualify for Medi-Cal get the quality coverage they need; and will hospitals and doctors see any relief from the burdens that are putting so many of them out of business?

Proposal by President of the Senate

State Senate President pro tem Don Perata's Senate Bill 48 would cover Californians who are employed, as well as their dependants. Employers could either spend a percentage of their payroll toward employee health insurance or pay an equivalent amount into a health care trust fund. The fund would then buy a few insurance plans from private insurance companies, and uninsured employees would be required to pick one. Insurance companies wanting to offer coverage through the fund would be required to restrain administrative expenses and provide a basic level of benefits. Working individuals would be required to purchase coverage for themselves and their dependants. The plan also expands children’s eligibility for existing public programs. The bill does not indicate if all employees must be covered when employers provide the insurance, nor what basic coverage is required, which could leave many workers without coverage and mandated to buy it themselves. The bill is still sketchy and will be worked on throughout the year, along with the two set out below.

Proposal by the Speaker of the Assembly

Assembly Bill 13, by Assembly Speaker Fabian Nunez, covers employees and their dependents through a purchasing pool of fees paid by employers that have two or more employees and do not offer health care coverage. This pool buys healthcare coverage from private insurance companies. Workers offered coverage from their employers would be required to accept coverage for themselves and their dependants unless premiums and out-of-pocket costs exceed a certain level of income, in which case they can buy their insurance from the pool. The money paid for premiums would be pre-tax dollars. Individuals and the self-employed could buy in to the pool, which would offer a choice among several plans, each of which must provide at least a minimum set of benefits. Lately, there has been a proliferation of so-called "basic" plans, so minimal they are really a sham, requiring huge deductibles; offering no pregnancy coverage, and offering very low hospital reimbursement rates. Both legislative proposals would try to set a floor for benefits from employers and from the pool. Again, affordability, funding and coverage issues remain to be worked out.

Proposal by the Governor

The foundation of the Governor’s plan is a mandate requiring every Californian to have health insurance. The proposal would allow, and even encourage, the proliferation of bare-bones plans with deductibles as high as $5,000 as well as requiring patients to spend an additional $7500 for procedures refused by their insurance company. This very troubling proposal does not at all address how plans will be affordable or adequate for Californians who are mandated to buy them, nor who will pay for uncovered procedures above the $12,500 ceiling. In addition, every employer is required to spend 4 % of payroll to buy insurance, either from insurance companies directly or through a state fund. This percentage of payroll is not actually sufficient to purchase insurance for the working uninsured and there is no limit to what employees would pay, no cost control and therefore, no premium control.

The Governor, like Sen. Perata and Speaker Nunez, would use public monies to cover all children living in families earning less than 300% of the Federal Poverty Guidelines (about $39,000 for a single parent with one child or $60,000 for a family of four) by buying insurance, again from private companies. No plan details exactly how the rest of California’s uninsured children would be covered. He also calls for significantly increasing reimbursements paid to providers under public programs by billions of dollars.

Under the Governor’s proposal, a portion of the funding for all of this would come from a tax on providers such as doctors and hospitals, as well as hoped for increases in federal monies. Additionally, the Governor would take money now paid to hospitals to treat indigent people and redirect it to private insurers to buy insurance for the poor. This creates an immediate problem for hospitals which are already closing at alarming rates due to inadequate reimbursements from private insurance companies along with the cost of caring for the uninsured.

Finally, the Governor would adopt President Bush's plan for individual “Health Savings Accounts” by requiring employers to “allow” employees to put away money, pre-tax, to pay for unreimbursed medical expenses. Health Savings Accounts effectively enable insurance companies to shift the costs and liability of healthcare away from them and on to consumers. Such a plan will not benefit people who are already too strapped to meet current expenses and it does nothing to expand coverage or affordability.

Actions in 2007

This year, and perhaps the next, the Legislature will work out some compromise measures as between Sen. Perata’s plan, the Speaker’s plan and the Governor’s plan. At the same time, we will continue to work on the long-term solution which must be universal, affordable, comprehensive in its coverage and protect choice of providers and quality. So far, that’s only SB 840. Any incremental legislation must surely move us in that direction and, at the very least, Do No Harm.

A second, third and fourth opinion on healthcare
Sheila James Kuehl
Los Angeles Times
January 9, 2007

IF ATTENTION IS the precursor to action, something might finally be done in Sacramento about the dismal state of healthcare insurance in California.

Four healthcare proposals are now before the Legislature, including one crafted by Gov. Arnold Schwarzenegger, which will be spotlighted in his State of the State address tonight.

Unfortunately, that plan and two others - state Senate President Pro Tem Don Perata's SB 48 and Assembly Speaker Fabian Nuñez's AB 13 - are short-term solutions that have the potential to expand coverage but at the end of the day can't be relied on to achieve what 80% of Californians say they want: a government guarantee of access to affordable healthcare coverage in the state.

In SB 48, all employers could either spend a percentage of their payroll toward employee health insurance or pay an equivalent amount into a healthcare trust fund, which would offer plans from private insurers. Insurance companies that wanted to participate in the fund would be required to restrain administrative expenses and provide a basic level of benefits. Working individuals would be required to purchase coverage for themselves and their dependants via their employers or the fund; out-of-pocket costs would be limited. For the unemployed, the plan would also expand children's eligibility for the existing Healthy Families program.

AB 13 covers otherwise uninsured employees and their dependents through a purchasing pool paid for by employers that have two or more employees and do not offer healthcare coverage. As with the trust fund in Perata's bill, this pool would offer healthcare coverage from private insurance companies. Workers offered coverage from their employers would be required to accept it unless premiums and out-of-pocket costs exceeded a certain level, in which case they could buy insurance from the pool. Individuals and the self-employed could buy into the pool, which would offer several plans, each of which would provide a minimum set of benefits. As with the Perata bill, the Healthy Families plan would be expanded to offer more public healthcare for the poorest children.

In their present forms, these bills are limited because they emphasize covering the employed and because they mandate that insurance will be funded by a percentage of wages, which may not be enough for all workers in the state, much less all Californians. Nor do these bills specify what is meant by basic coverage, which may mean that the insurance that is offered isn't adequate.

Schwarzenegger's plan, which was unveiled Monday, doesn't do anything to solve these problems and creates some new ones. His plan mandates that every individual have insurance (not just every worker), yet it doesn't ensure that coverage will be comprehensive and affordable.

Schwarzenegger also calls for increasing reimbursements paid to providers under public programs by billions of dollars. Like Perata and Nuñez, the governor would expand the Healthy Families program to help pay for insurance for the poorest children in the state.

How does he pay for it? Individuals and employers will contribute, but employers are required to spend only 4% of payroll to insure their employees, or contribute the same amount to a state fund. This is not sufficient to purchase insurance for the working uninsured, who will be required to have it. This means that the governor's plan can at best provide high-cost, low-benefit plans for many Californians; it limits what employers pay but not what individuals must pay or what insurance companies can charge.

A portion of the funding for the plan would also come from federal money that is at this point only "hoped for." There also would be a tax on providers, such as doctors and hospitals, and the governor would redirect public money now spent on poor people in hospitals to insurance companies. This would create an immediate problem for hospitals, which are already closing because of inadequate reimbursement from private insurance companies.

Finally, the governor would adopt President Bush's plan for individual health savings accounts by requiring employers to "allow" employees to put away money, pretax, to pay for unreimbursed medical expenses. These accounts effectively shift the costs and liability of healthcare away from insurance companies and onto consumers. Such a plan would not benefit people who are already too strapped to meet current expenses, and it does nothing to expand coverage or affordability.

The fourth proposal before the Legislature is SB 840, which I wrote last year. It is the only proposal that establishes universal, affordable, comprehensive health insurance for all Californians and guarantees the right of each patient to choose his or her doctor.

SB 840 would replace insurance companies with a statewide trust fund that collects premiums paid by employers and individuals, who together would share the responsibility for funding the program. The creation of a single state fund reduces the administrative portion of California's healthcare costs from nearly 30% to under 10%. With everyone in one pool, which spreads the risk as widely as possible, no one would be denied coverage for a preexisting condition. Individuals would be free to change jobs, start a business, go to school or start a family without losing coverage or doctors they trust.

SB 840 mandates truly comprehensive coverage; it keeps down the overall cost of healthcare; and it specifically limits the out-of-pocket costs to individuals.

The governor says he will not sign a universal insurance bill. Nevertheless, the Legislature will continue to develop the plan as the only long-term, universal solution to the health crisis.

I'm committed to working with all stakeholders - the governor, the Legislature, medical professionals, labor, business and consumers - to craft real healthcare reform this session. I believe that SB 840 provides the best way to meet the goal of universal healthcare for Californians.

Any other incremental reform must move us toward that goal.

State Senator Sheila Kuehl Named Health Committee Chair
FOR IMMEDIATE RELEASE January 3, 2007
Contact: Robin Podolsky at (310) 441-9084
SACRAMENTO - On January 3rd, State Senator Sheila Kuehl (D-23rd District) began her work as the new chair of the State Senate Health Committee.  Senator Kuehl is the author of SB 840, a universal healthcare bill that overwhelmingly passed both houses of the Legislature last year and was vetoed by Gov. Schwarzenegger.
"I see a dual role for myself this year," Senator Kuehl reports.  "I will re-introduce SB 840, as I continue to believe it is the best way to control costs and provide comprehensive and quality health insurance for every Californian at an affordable rate."  SB 840 also guarantees the right of each Californian to choose his or her own doctor and continues to foster competition among private healthcare providers and pharmaceutical drug companies.  The bill would have replaced all current healthcare coverage premiums, co-pays, deductibles and out of pocket expenses with a single yearly premium for individuals and businesses, assessed on the basis of income.  It would also sharply reduce the administrative costs that are bloating the healthcare budget with a single, streamlined claims and reimbursement system.
"As Chair of the Senate Health Committee," Senator Kuehl continued, "I will also work very closely with Senator Perata and with State Assembly Speaker Fabian Nuñez, who have introduced healthcare reform legislation of their own, as well as with the Governor and his staff, to bring together a number of disparate proposals and craft the kind of incremental plans that might help get coverage to at least some of the 7 million uninsured Californians.  It is very heartening to those of us who have been working on this issue for years to see that the healthcare crisis in California is finally getting the attention it requires," said Senator Kuehl.  "One in five Californians is uninsured, and those of us fortunate enough to have health insurance are seeing our costs increase while our coverage shrinks."
"I look forward to working with my colleagues to consider all of the ways in which we can offer each consumer the comprehensive coverage, personal choice, quality care and cost relief that they require and deserve.  We will be having a respectful and robust conversation about this complex and urgent problem and we will move beyond debate into action."
SB 840 will be re-introduced in February.

Senator Sheila Kuehl
Tikkun Magazine
November 2006
 
As the State Senator for the 23rd Senate District in California, I represent almost a million people on the west end of Los Angeles County and the southern part of Ventura County. It's a diverse district, culturally, economically, religiously, containing some of the wealthiest neighborhoods in the state, as well as working class neighborhoods where one of the most urgent issues is gang violence. There are high-rise urban neighborhoods, suburbs, agricultural areas, some of the most beautiful wild land in the state, and miles of gorgeous coastline.

My constituents are bus drivers, movie stars, shop owners, social workers and teachers. My job brings me into frequent meetings with Chambers of Commerce, union members and leaders, entertainment industry leaders and representatives of their crews, law enforcement officers, gangland peace brokers, doctors, lawyers and Native American tribes. I find it interesting that, no matter how diverse the group or the subject matter of a meeting, talk inevitably comes around to health care and how our health care system is broken.
 
The facts are chilling. In California, nearly one of every five persons lives without any health care coverage at all. Over 80 percent of these uninsured are employed. Even though various solutions to the crisis have been brought to the Legislature or proposed by initiative over the last few years, we (like the rest of the country) find it easier to agree about the extent of the problem than about a solution.
 
Some aspects of what the people want are clear enough. Over and over, we are told that individuals want the right to choose their own doctors. Doctors want to regain control over their patients' care, they don't want insurance company bean counters telling them what to do. Patients and doctors want evidence-based standards for appropriate medical care, not formularies dictated by pharmaceutical companies.
 
People don't want insurance companies passing judgment on their healthcare and they don't want the government to own the doctors and hospitals, either. They want quality and choice, and they don't want to have to choose between medical care and their life savings, or between medical care and food.

The Costs of Our Current System

California State Senate Bill 840

But we can change the current system. Based on careful studies of the health care problem and analyses of proposed solutions, I introduced a bill that, I believe, would solve California‚s health care crisis and could be a template for the rest of the country. State Senate Bill 840 passed the California‚s State Senate and the Assembly and was sent to Governor Schwarzenegger for signature. On September 5, the Governor released a statement signaling his intent to veto the bill.
 
State Senate Bill 840 is a single-payer plan that would have insured every Californian with comprehensive benefits while controlling medical care costs and preserving the right of each of us to choose our own doctors and hospitals. SB 840 would have accomplished these goals without putting additional burdens on California's general fund.
 
How could we get more for the same amount we are paying now? SB 840 is based on a model carefully analyzed in a report by the Lewin Group, an independent health care cost/benefit analysis firm with eighteen years of experience. The Lewin Group discovered that almost one-third of every dollar spent on healthcare in California goes to administrative costs that is, paperwork, not patient care. The Lewin model, on which SB 840 is based, shows that we can reduce administrative costs to about 5 percent of every dollar spent (about a 20% drop) and that the savings will pay for a health care plan that can work for everyone.
 
Specifically, SB 840 would reduce costs by replacing the current chaos of private and governmental insurance plans with a single, reliable claim and reimbursement system.  This is estimated to save about $20 billion in administrative costs. Second, SB 840 would mandate California to use its purchasing power to buy in bulk prescription drugs and durable medical equipment, such as wheelchairs, from pharmaceutical companies.  This would save about $5.2 billion dollars. Twenty-five billion dollars buys a lot of health care.

A Human Impulse

A couple of months before vetoing SB840, in remarks before the Commonwealth Club, Governor Schwarzenegger actually stated, "I don't believe in universal healthcare.  It's hard to believe that the Governor truly meant what he said, but his veto speaks volumes.  
 
Quality healthcare is not some status symbol or commodity that can be the province of the richest class.  It is a necessity of life, like water or breathable air.  Surely people who live in such a technologically advanced and wealthy society as ours ought to be able to expect a higher level of health care than we live with now.
 
Each of us will need health care at some point in our lives.  Each of us is vulnerable; each of us will, someday, die. People may be uncomfortable with the subject of health care, because it is a reminder of an aspect of life that we'd rather not look at.  But being mortal and vulnerable simply makes us more human.
 
Popular culture, in our country, places such an emphasis on strength that it has become almost shameful to admit to any need that one can‚t fulfill as an individual.  Action movie heroes (and governors) make normal people look unnaturally weak.  Tough-guy strutting is back on the big screen and in politics.
 
However, it makes no sense to tell a SARS virus to "bring it on." Nor can we fight illness or injury with self-reliance.  Like it or not, we are weak animals who rely, not only on our brains, but also on our cooperation with one another.
 
If we embrace our inevitable interdependence, if we embrace that human impulse we call kindness, we can see that universal healthcare is not only the compassionate solution it is the fiscally tough solution as well.
 
This is especially true when we expand our idea of cost/benefit analysis. We might point to all the benefits of increased wellnessnot only is preventive care cheaper in terms of preventing expensive problems down the road; it also prevents human misery and promotes every level of well-being. We all have an interest in the health of our neighbors.
 
I seem to remember an excellent self-help book, the title will come to me any minute, that suggested it's possible and necessary to love one's neighbor as oneself.  When it comes to health care, that's a sound prescription.
 

Senator Kuehl's Statement on Schwarzenegger's Veto of Universal Health Care: Innacuracies of Veto Message Cited

By State Senator Sheila Kuehl

[Editor's Note: State Senator Sheila Kuehl issued this statement after Governor Schwarzenegger's veto of the bill she authored, SB 840. This measure would have insured every Californian with comprehensive healthcare benefits, guarantee the right of patients to choose their own doctors, reduce the cost of prescription drugs, and control healthcare costs.]

The reasoning behind the Governor¹s opposition to universal health care is truly innacurate, which is no surprise considering he has refused to meet to discuss the issue. If the Governor took a thoughtful look at SB 840 he would see that delivery of health care would remain exactly as it now is, public or private. The main difference is that under SB 840 every Californian would have been able to choose their own doctors and hospitals and there would have been no unreimbursed care.

The Governor makes a huge mistake in saying the bill would cost new money or there would be new taxes and no help to affordability. Such a statement shows that he has not read the bill, doesn¹t understand the bill, or is being completely misdirected by his handlers.

In truth, premiums to be paid by businesses and individuals under SB 840 would have taken the place of all premiums, co-pays and deductibles we now pay, saving every person who now pays for healthcare significant money. In addition, where there are no cost controls at all now, and enormous administrative overhead and profit for insurance companies, there would have been a transparent system that actually would succeed in making healthcare coverage affordable in California.

If the Governor took a closer look at SB 840 he would see that it embodies exactly the kind of system he purports to be seeking. In his own words: ³I want to see a new paradigm that addresses affordability, shared responsibility and the promotion of healthy living.² Yet, after nearly three years in office, he has proposed no plan, and nothing has come out of his ³health summit² that proposes anything to accomplish these goals.

It was a mistake for the Governor to reject the only concrete plan now on the table to reform healthcare coverage. In his statement, the Governor says that he cares about Œaffordability,¹ but SB 840 would make healthcare coverage affordable, while preserving quality. SB 840 would have protected, by law, the right of consumers to choose their own doctor, making healthcare more competitive than ever.

Finally, by trying to distract readers of his veto messages with the fact that he supported a few small steps toward healthy living and minor expansions of coverage, the Governor reveals his real agenda: leave healthcare in the hands of private insurance companies and let working families lose coverage one family at a time, let them go bankrupt even when they have insurance, and let hospitals close one at a time.

To the Members of the California State Senate:
From Governor Arnold Schwarzenegger

While I commend Sen. Sheila Kuehl's commitment and dedication to providing health care coverage for all Californians, I must return SB 840 without my signature because I cannot support a government-run health care system.

Socialized medicine is not the solution to our state's health care problems. This bill would require an extraordinary redirection of public and private funding by creating a vast new bureaucracy to take over health insurance and medical care for Californians - a serious and expensive mistake.  Such a program would cost the state billions and lead to significant new taxes on individuals and businesses, without solving the critical issue of affordability.  I won't jeopardize the economy of our state for such a purpose.

SB 840 relies on the failed old paradigm of using one source - this time the government - to solve the complex problem of providing medical care for our people.  It uses the same one-sided approach tried in SB 2, the employer-mandated coverage measure signed into law before I became governor. I opposed SB 2 because it placed nearly the entire burden on employers, and voters repealed it in 2004.  

I want to see a new paradigm that addresses affordability, shared responsibility and the promotion of healthy living.  Single payer, government-run health care does none of this.  Yet it would reduce a person's ability to choose his or her own physician, make people wait longer for treatment and raise the cost of that treatment.

With my partners in the Legislature, I look forward in 2007 to working to develop a comprehensive and systemic approach to health care that not only provides affordable medical treatment to people when they are ill, but that strives to make sure people don't get sick in the first place.   An approach that supports cost containment and recognizes the shared responsibility of individuals, employers and government.  That promotes personal responsibility and builds on existing private and public systems.

As part of this comprehensive approach, my administration already has worked hard on the fight against obesity, a leading cause of disease in this country.     I signed the landmark Healthy Schools Now Act, which bans junk food and sugar-laden drinks in public schools. Our budget included $18 million to replace that junk food with fresh fruits and vegetables so we can start promoting healthy living choices for our youngsters.  Recently I signed AB 2384 (Leno) to make fruits and vegetables more affordable and accessible in low- income communities and AB 2226 (Garcia) to help inform 7th grade students and their parents or guardian(s) of the risk of Type 2 Diabetes.

Our efforts to effectively prevent and detect diseases extend far beyond obesity prevention. I recently signed legislation to ensure early detection of hearing loss through newborn hearing screenings (AB 2651- Jones). Since I¹ve taken office we have expanded newborn health screenings from 33 to 85, dramatically increasing the ability to prevent or detect disease early to keep our children as healthy as possible from the beginning.

On the question of access, I've made children's coverage a priority, resulting in nearly a quarter million additional children covered by our Medi-Cal and Healthy Families programs. Building on an $80 million budget investment to target uninsured children who are eligible, but not enrolled in state health care programs, I signed legislation to eliminate roadblocks to coverage, streamline enrollment for Medi-Cal and Healthy Families and reduce the number of kids that lose coverage due to administrative barriers. (SB 437 – Escutia, AB 1948 – Montanez, and AB 1851 – Coto) And on the question of affordability, I reached agreement with the Legislature to provide discounts on prescription drugs of up to 40 - 60 percent off brand name and generic drugs for our neediest citizens.

But we're not stopping there.

I convened a California Health Care Summit in July that for the first time brought together experts on all sides of this issue.  At the table with us were representatives from academia, government, business, health care and labor.  From that summit and follow-up meetings, there emerged a strong sense of how to proceed on health care reform. Affordability is the key to making our system work for everyone, and affordability is exactly what we are dedicating ourselves to.

By implementing a statewide plan advancing health information technology that I called for in a recent executive order, we can shave billions of dollars off healthcare costs in California. By creating the 500 elementary school-based health centers I called for in our Health Summit, medical treatment will be more accessible to our children who need it most and they can avoid costly emergency care. We have made progress toward this goal by enacting legislation (AB 2561 – Ridley-Thomas) to support California¹s school health centers by increasing cross-agency collaboration, gathering data about services delivered in school health centers throughout the state and providing technical assistance to aid in the development of new and existing school health centers.

With the same willingness to compromise that we showed this past legislative session on issues like global warming, I know we can reach our goals.  I look forward to working with Sen. Kuehl and other members of the Legislature, as well as the experts who participated in our summit and other stakeholders, to create a healthier California.

For these reasons, I am returning SB 840 without my signature.

Sincerely, 

Arnold Schwarzenegger

Schwarzenegger Vetoes Universal Health Care Bill.
Steve Lawrence, Associated Press
September 22, 2006

Saying he opposes government-run health care, Gov. Arnold Schwarzenegger followed through Friday on his promise to veto a Democratic bill that would have set up a universal health care system covering all Californians.

"Socialized medicine is not the solution to our state's health care problems," the Republican governor said in an unusually long veto message in which also he touted his efforts to expand two other government health care programs, Medi-Cal and Healthy Families, which serve the poor.

"This bill would require an extraordinary redirection of public and private funding by creating a vast new bureaucracy to take over health insurance and medical care for Californians — a serious and expensive mistake."

He said he wanted to see a "new paradigm that addresses affordability, shared responsibility and the promotion of healthy living. Single payer, government-run health care does none of this."

But the bill's author, Sen. Sheila Kuehl, D-Santa Monica, said Schwarzenegger mischaracterized the bill's effects. She said it would do what the governor said he wanted while saving health care consumers and doctors money.

"Where there are no cost controls at all now, and enormous administrative overhead and profit for insurance companies, there would have been a transparent system that actually would succeed in making health care affordable in California," she said in a statement.

Kuehl suggested Schwarzenegger's real agenda was to "leave health care in the hands of private insurance companies and let working families lose coverage one family at a time."

The bill would have provided every California resident with health insurance through a program administered by a new entity, the California Health Insurance Agency, that would have been headed by a commissioner appointed by the governor.

The system would have been partially financed by the state's current spending on health care and partly by consumers and their employers in place of private insurance payments.

A state commission would have made recommendations to the governor and Legislature about how much to charge patients and businesses in premiums.

Supporters said it would save money by significantly reducing administrative costs, pointing to the 2 percent spent on administration by Medicare, the federal health care program for senior citizens, as an example.

A program like the one proposed by Kuehl would save nearly $8 billion in the first year, according to an analysis by the independent Lewin Group commissioned by the bill's supporters.

Senator Kuehl Criticizes Governor’s Planned Veto of Universal Healthcare
Response to Governor's SB 840 Veto Message Below
September 5, 2006