CA Assembly Pushes Forward Health Care Measure

August 29, 2006 ( - The California State Assembly has approved a bill that would eliminate private medical insurance plans and establish a statewide health insurance system that would cover all Californians.

The San Francisco Chronicle reports that SB840 would provide comprehensive medical, dental, vision, hospitalization and prescription drug coverage to every California resident. Residents would have freedom to choose any care provider.

The bill does not address the costs of the program since it would take several years before the system will be up and running, according to the Chronicle. The measure would create a commissioner and a blue-ribbon commission to examine how the structure would work.

An analysis by the Lewin Group, an independent health care consulting firm, said the health insurance system could be paid for with all of the money now being spent on health care – combining all state and federal funds, along with business contributions and participant payments and co-payments. Their report suggested funding could come through an 8% payroll tax and a 3% individual income tax.

According to the office of Senator Shelia Kuehl, the Democratic lawmaker who introduced the bill, SB840 allows the state to use its purchasing power to negotiate bulk rates for prescription drugs and durable medical equipment, such as wheelchairs, thus realizing an additional $2 billion in savings, according to the news report.

Chris Ohman, president and CEO of the California Association of Health Plans said eliminating health care insurance plans would get rid of the groups that have the most experience with getting people insured and to doctors. He pointed out that other places that are trying universal health care – Massachusetts and San Francisco – are using health care plans to help facilitate the implementation. Ohman said insurance companies are in the best position to manage costs.

The measure will need to be approved by the state Senate before being presented to Governor Arnold Schwarzenegger. The Senate has already approved the plan once and is expected to approve the changes made to the bill by the Assembly. Swarzenegger has said he opposes a single-payer plan like the one proposed Kuehl’s bill.