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 Californiaâ€™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 canâ€™t, or wonâ€™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, itâ€™s approximately 14.7 billion that theyâ€™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 Governorâ€™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 Governorâ€™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 employeesâ€™ health coverage. Companies with fewer than 10 employeesâ€”a full 80 percent of businesses in Californiaâ€”are exempt. The four percent fee will discourage employers from dropping their health care coverage in light of the stateâ€™s program.
Under the Governorâ€™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 â€œHealthy Actionsâ€? 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 ratesâ€”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 proposalâ€”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 Governorâ€™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.