California Dreams On

Published March 1, 2008

California continues to stumble along down the road in dealing with health care. The state is facing a $14 billion budget deficit in the coming year, and this estimate does not include the impact of reduced revenues from falling real estate values and sales.

So what does the governor decide to do? He joined the speaker of the Assembly to propose a “bipartisan” state health program that will cost another $14 billion (at least), of course.

Much of this will be paid for by raising taxes on smokers, who will respond by quitting or smuggling, thus reducing revenues, and a new tax on employers, which will be thrown out for violating the federal government’s ERISA law which, in part, makes all legislation mandating employee benefits the sole purview of the federal government.

I have been pointing out for years that ERISA would invalidate any state-imposed requirement that employers provide health plans or be penalized financially. The courts already have confirmed that in Maryland and Suffolk County, New York by tossing out similar legislation in those jurisdictions.

A spokesman for Assembly Speaker Fabian Nuñez (D-Los Angeles) was quoted in The Christian Science Monitor as saying he and Gov. Arnold Schwarzenegger (R) have been working with “two top ERISA experts,” so they should be okay.

Health Care Policy Mess

The same spokesman also said, “The only alternative is to do nothing and wait for the federal government.” Well, no–another alternative would be to create a new, consumer-oriented, free-market system in the state and adopt honest, broad-based taxes to subsidize the people who need help.

California health care policy is a total mess. The state Senate has yet to vote on the proposal. The chair of the Senate Health Committee, Sheila Kuehl (D-Santa Monica), a passionate single-payer supporter, told the Christian Science Monitor, “I think you can assume that we will hold the world’s longest hearing because I want to have every bit of this bill looked at.”

Even if the Senate enacts the bill and Schwarzenegger signs it, the funding will have to go to the voters for a referendum to approve the tax increases. It is questionable whether lawmakers can get it on the ballot in time for the November elections.

Meanwhile, the deficits accumulate and the state’s economy tanks.

Greg Scandlen ([email protected]) is president of Consumers for Health Care Choices, based in Hagerstown, Maryland.

For more information …

“Health Reform Comes Slowly for California,” The Christian Science Monitor, December 31, 2007:

“California’s health care effort in doubt after ruling on S.F. plan,” San Francisco Chronicle, December 28, 2007:

“RNs Say Latest Health Bill Even More Flawed,” Medical News Today, December 17, 2007: