The creation of a mandate to carry insurance is the latest idea
coming out of Sacramento to remedy the health insurance crisis.
Unfortunately, this kind of proposal may not be the right
solution.
According to the 2003 California Health Interview Survey, 6.6
million Californians are uninsured.
The uninsured are disproportionately young and employed. They do
not receive insurance from their employer, simply cannot afford it,
or are not eligible for public health insurance.
The uninsured are less likely to see a doctor than an insured
individual; and uninsured individuals rate themselves in worse
health than insured individuals, according to the survey.
Lack of insurance is a serious problem because it leads to poor
health outcomes.
In November, Proposition 72, which would have mandated that
employers provide health care coverage for their employees, was
defeated. Its passage would have extended coverage to 1.3 million
Californians ““ workers and their families ““ allowing
them to see their own doctor rather than relying on emergency-room
care.
Legislators who opposed Proposition 72 are putting together
proposals to extend coverage by requiring all Californians to buy
health insurance.
This moves the responsibility for health insurance from
employers to individuals.
Like auto insurance, individuals would be required by law to
carry health insurance. But as we have learned from the auto
insurance market, people who cannot afford insurance will not
purchase it.
Furthermore, these proposals fail to address the fundamental
problem of health care affordability.
Does this mandate mean that people without health insurance are
criminals?
Under the mandate, individuals are not in a position to
negotiate fair prices for their health insurance. Insurance
companies will have no incentive to keep costs low.
Many Californians will still be unable to afford health
insurance. Only with extremely generous subsidies will low-income
individuals be able to obtain coverage.
Will this really solve the problem of uninsurance in California?
Senator Sheila Kuehl thinks that an individual mandate to carry
insurance is “an empty promise.”
This past Wednesday, Kuehl introduced the California Health
Insurance Reliability Act. The act will assure affordable coverage
to every Californian and provide them with comprehensive benefits,
she said.
Eventually, this system will phase out all other public and
private insurers and replace it with a universal health insurance
plan, funded and administered by the state of California.
The act will also reduce overall health spending in California
by $8 billion in the first year. Compared to California’s
current system, the total savings under this plan from 2006 to 2015
would be $343.6 billion, with every Californian covered.
Businesses, families, and state and local governments will enjoy
substantial savings.
Kuehl’s plan establishes a feasible system to guarantee
health coverage to all Californians, rather than requiring by law
that every individual carry insurance.
The Lewin Group, an independent firm with 18 years experience in
health care cost analysis, affirmed that Kuehl’s plan for
universal coverage is fiscally sound and reliable.
The California Health Insurance Reliability Act is the first
step in recognizing health insurance as a right and not a
privilege. Enacting an individual mandate still makes insurance out
of reach for many Californians.
Brooke Fox is a graduate student at the UCLA School of
Public Health, and Marlena Kane is a graduate student in the UCLA
School of Public Health and the UCLA School of Public
Affairs.