Guest Voice: Governor Schwarzenegger’s Office on Health Care
Shortly after I published a post on Governor Arnold Schwarzenegger’s health care plan, I received an e-mail from his office. After e-mailing back and forth, the office of Governor Schwarzenegger agreed to write an op-ed, or guest post, exclusively for The Moderate Voice on this before mentioned health care plan.
Today, I am more than happy to publish this guest post written by John Ramey (more information on Mr. Ramey below his article).
Governor Schwarzenegger Leads Health Care Reform Debate With Proposal to Fix California’s Broken System
By John Ramey
All Californians, whether they have insurance or not, are hurt by our broken health care system. Every insured Californian pays a hidden tax of 17 percent of premiums to subsidize health care for those who can’t, or won’t get health insurance. It is estimated that the cost of an individual’s annual health care premium is $455 higher and a family’s is $1,186 higher because of this hidden tax. For businesses, it’s approximately 14.7 billion that they’re paying in hidden taxes.
Health care costs are spiraling out of control with devastating consequences. Chronic illnesses, like diabetes and poor health choices like smoking, drive up health care costs and the hidden tax. Medical errors also increase costs, at a rate of more than four billion annually and 23,000 lives each year. Fewer and fewer workers can get insurance through their jobs. Nationally the number of employers offering job-based coverage is declining, premium rates outpace inflation and job growth, and the annual increase in health insurance costs is 11 percent nationwide.
The health care initiative Governor Schwarzenegger proposed in his recent State of the State address is the most comprehensive in the nation. His plan addresses our broken health care system, and the hidden tax that every insured Californian pays to subsidize the 6.5 billion in our state who are uninsured. Individuals, government, doctors and hospitals, insurers and employers all have equal responsibility by realizing these reforms. By promoting health and wellness, covering the uninsured and increasing affordability, California has the opportunity to create a model that the rest of the nation can follow. This past weekend, President Bush even acknowledged the Governor for taking on such a challenging and divisive issue as health care and putting forth a comprehensive proposal.
The Governor’s plan is based on three building blocks: Prevention and wellness; coverage for all Californians; and affordability and cost containment. These building blocks rest solidly and rely heavily on a foundation of shared responsibility by all. California cannot reduce costs, increase coverage, restore emergency care or achieve the long-term cost savings that greater statewide health can achieve without equitable participation of every player.
Under the Governor’s proposal, all Californians must have a minimum level of insurance to ensure that those with insurance no longer pay for the uninsured. Individuals will be responsible for securing health coverage for themselves and their children and contributing to paying for their coverage. Government will return over $4 billion to doctors and hospitals by increasing federal reimbursement for Medi-Cal. The state will also expand Medi-Cal to poor adults and Healthy Families to children in families earning less than $60,000 annually. Employers with 10 or more employees who choose not to offer health coverage will contribute four percent of social security payroll toward the cost of employees’ health coverage. Companies with fewer than 10 employees—a full 80 percent of businesses in California—are exempt. The four percent fee will discourage employers from dropping their health care coverage in light of the state’s program.
Under the Governor’s proposal, health plans and insurers must guarantee individuals access to coverage in the individual market, spend 85 percent of every premium dollar on patient care and make “Healthy Actions� benefits available to promote healthy behaviors. Doctors and hospitals will be relieved of costs associated with caring for the uninsured and will receive significantly increased Medi-Cal rates—eliminating the need for any costs shift or hidden tax. They will receive about $15 billion in new revenue, and in turn, will contribute a portion back to universal coverage. Physicians would contribute two percent of revenues and hospitals would contribute four percent, ensuring some of the savings stays in the system to support total coverage and increased Medi-Cal rates to providers.
In the weeks and month ahead, the Governor will be traveling up and down the state to engage Californians, businesses, health care providers, insurers and others in discussing his proposal—a plan which, if adopted, would reduce the hidden tax, lower health care costs, support better care and promote a healthier California.
The time for health care reform is now, and the Governor has laid the blueprint for insuring all Californians while improving health care delivery and reducing costs. As an integral part of the Governor’s health care team, I know how committed the Governor is to fixing the system and making health care reform a reality in 2007.
John Ramey is a senior health policy consultant in the Office of the Governor. Since 1996, he has worked in the private sector and since 2000 has served as principal and partner with Ramey, Macomber & Associates, specializing in healthcare and health insurance contracts. Ramey was executive director for the Managed Risk Medical Insurance Board from 1990 to 1996 and deputy secretary for the Health and Welfare Agency from 1986 to 1990. Previously, he was chief of staff for the Department of Health Services, assistant secretary of the Health and Welfare Agency and served on the Managed Health Care Improvement Task Force.
Extra: I’d like to thank Governor Schwarzenegger’s office for working with blogs like The Moderate Voice rather than dismissing them. It is great to see that the Governor’s office is so willing to work with us, as to provide you all with extra information.
UPDATE
Also check out the posts by TMV co-bloggers Polimom and Pete Abel, in response to Mr. Ramey’s guest post here.
13 Responses to “Guest Voice: Governor Schwarzenegger’s Office on Health Care”
Guest Voice: Governor SchwarzeneggerÂ’s Office on Health Care …
I applaud Governor Arnold Schwarzenegger for taking the lead in the health care reform debate by introducing a new health care plan for the State of California….
I am inspired by the Governor’s audacity and creativity to distribute the costs and responsibility for the program as broadly as possible.
It is not a new tax as much as it is a reconceptualized and redistributed tax. I respect the Governors effort to try and reconcile the aims of a progressive society by embracing free market mechanics.
I expect the health care costs per person in California to drop to reflect the greater efficiency of this system.
My only request is that the burden on businesses be designed to gradually shift to the individual.
I aplaud any effort done in order to make healthcare, a right as fundamental as education, available to all. I do have a question though. Does the plan conteplate safeguards to make sure companies don’t reap special comercial gains from tax dollars? Health care providers will be being given tax payer money in order to support this system. In Europe, most doctors and hospitals are government owned and operated anyway, so it’s not a problem, but in the US, this is government giving tax money to private companies, much like Blackwell and Halliburton. We know that it’s not uncommon for companies to try to cheat the taxpayer out of money, so how does the plan address this posibility?
One criticism that I’ve seen is that the 4% payroll tax that would be levied on small businesses that choose not to provide health insurance might actually be a smaller figure than the cost of providing health insurance. Isn’t it then providing a disincentive for these businesses to provide insurance?
[...] Polimom’s excited by the innovative health care proposals coming from various states. From Massachussetts to Maryland to California, we’re finally seeing creative, bipartisan, locally-focused attempts to engage with the health care monster. While there are devils and details and complicated flaws in these hatchling ideas, such state-level proposals are precisely the approach I’ve been hoping to see. Furthermore, and just as importantly, their authors are bringing the discussion to the people, as this morning’s guest post at The Moderate Voice demonstrates: Under the Governor’s proposal, all Californians must have a minimum level of insurance to ensure that those with insurance no longer pay for the uninsured. Individuals will be responsible for securing health coverage for themselves and their children and contributing to paying for their coverage. Government will return over $4 billion to doctors and hospitals by increasing federal reimbursement for Medi-Cal. The state will also expand Medi-Cal to poor adults and Healthy Families to children in families earning less than $60,000 annually. Employers with 10 or more employees who choose not to offer health coverage will contribute four percent of social security payroll toward the cost of employees’ health coverage. Companies with fewer than 10 employees—a full 80 percent of businesses in California—are exempt. The four percent fee will discourage employers from dropping their health care coverage in light of the state’s program. [...]
I’m with Polimom on this one; ditto what she said. In fact, this angle — of the states often being the incubators for policy that the feds eventually emulate — was the subject of a recent story in The Economist, the lead of which references Schwarzenegger’s proposal. Anyone interested should check out that story. Furthermore, the state-level focus on this topic is one of the four reasons why I personally believe universal healthcare will finally (and hopefully sooner than later) be a reality in this country. Go get ‘em, Arnold!
It’ time for good health insurance everybody needs it.
Hopefully this time we will win.
Thank you.
I’m married to a physician, and when we watched the news where the governor described his health care plan, my husband said, “That’s it. I’m quitting.”
Why? Because you people are happy to tax the doctors 2% of their REVENUE to finance this program. On top of all the restrictive and intrusive regulations imposed by both state and federal government, on top of the low reimbursement rates by insurance companies, Medicare and Medi-Cal, you want the doctors to surrender 2% of their revenue to the government.
And let’s not fool ourselves: a 20% increase in Medi-Cal rates would still amount to less than what Medicare pays, which already hardly pays anything at all.
My husband has given a lot to the community, many times just writing off the bills for patients who can not afford to pay. He hardly earns anything anymore, and yet you are happy to add on to his tax burden. Every year, more of his colleagues are either leaving the state or retiring altogether. He has hung on because no one will be left to take care of our community.
But congratulations, Mr. Schwarzenegger. You’ve just accomplished what I thought was impossible: make my husband decide to quit the profession he used to love. I hope you find enough health care providers to keep your idiotic proposal running.
As for us, we’re leaving.
And it’s going to get worse and worse if they don’t do something to alter the status quo.
I’m sure the proposal isn’t perfect, but I think it’s probably worth trying and tweaking. We can’t afford to continue on the present course.
“I respect the Governors effort to try and reconcile the aims of a progressive society by embracing free market mechanics.”
Which is, of course, why it will fail miserably. Look at Anna’s post. Would you like to know what the greatest accomplishment of the private health insurance system is? Shafting the doctors and hospitals by withholding their money for months on end. They count on a behavior that would earn their customers the right to be dropped like hot potatoes in order to boost their bottom lines by allowing them to hang on to funds they have no right to. All of these articles about the bold steps states are making cite Missouri as a state planning on expanding their system? Really? Is that a comparison with the before or after of Governor Blunt and his Republican allies cutting over 90,000 people out of the Medicaid system and cutting benefits for those who were still in the system?
Not one of these amazing plans you members of the First Church of Free Market are so thrilled about has a single original idea that stands a chance of really fixing a thing. It’s all BS to be able to claim something is being done while it all really comes down to financial juggling.
Until everyone can work together to come up with massive changes to the system at all phases, putting the welfare of the citizens of this country ahead of their own interests nothing except baby steps towards a true solution will be made.
Sure feel sorry for the employees of those companies that have 11 employees. I can see a whole lotta people losing their job the day this program starts.
Health Care: Taming the Beast…
There is a saying that goes something like this:
If you are assigned the task of boiling the ocean, the only way to accomplish it is to boil one cup at a time.
Or something like that, anyway.
“Boiling the ocean” (and its kin “eating an elephant”…
Guest Voice: Governor Schwarzenegger’s Office on Health Care…
I applaud Governor Arnold Schwarzenegger for taking the lead in the health care reform debate by introducing a new health care plan for the State of California.
……