Expert Comments: California Health Care Proposal Will Hurt Taxpayers

Published December 20, 2007

(CHICAGO, Illinois – December 20, 2007) On December 14, California Gov. Arnold Schwarzenegger (R) and Assembly Speaker Fabian Nunez (D) proposed legislation that would expand health insurance by increasing state payroll and cigarette taxes.

Experts contacted by The Heartland Institute offered the following comments about the proposal. You may quote from this statement or contact the experts directly at the phone numbers and email addresses provided below.

“Raising taxes on tobacco implies hitching this new program to an unstable and declining revenue source. Mandating that employers spend between 1 and 6.5 percent of their payroll costs on health care will only chase businesses out of the state or force them to pass additional costs on to Californians.

“Neither method provides a sound foundation for a program designed to serve 3.6 million people.”

Paul J. Gessing
Rio Grande Foundation
[email protected]
(505) 264-6090

“California’s latest health reform plan is nothing more than a shell game that will put more and more of the state’s health sector under political control. It would not achieve the governor’s goal of universal coverage and in the process would rob employers, health care providers, citizens, and insurers of their flexibility and freedom. It surely will be rejected by the voters.”

Grace-Marie Turner
Galen Institute
[email protected]
(703) 299-8900

“The new plan developed by Governor Schwarzenegger and Speaker Nunez to extend health insurance to 3.6 million uninsured Californians will not necessarily insure that they receive timely quality medical care.

“There will be more patients requiring more visits from the same number of doctors, while increasing cost by producing more bureaucrats who don’t provide direct patient care.

“It is time to try a new approach that levels the playing field of tax treatment for all health care, thus promoting more direct payment for everyday medical care and reducing cost.”

Robert S. Berry, M.D.
PATMOS EmergiClinic
[email protected]

“California is not in a good position to be undertaking new spending initiatives. It is Ground Zero for the coming collapse in housing market values. The state needs to be very sure that its fiscal house is in order.”

Arnold Kling
Adjunct Scholar
Cato Institute
[email protected]
(202) 842-0200

“The California health plan sounds like a tax on the poor (who smoke disproportionately), young workers, and small businesses.

“Low-income workers will be forced to use a large part of their limited compensation for insurance and taxes. With a high minimum wage preventing cuts in cash payments to cover the mandate, employers will have to lay people off, and workers may be forced to work in the underground economy, go on unemployment, or move to Nevada.”

Stephen J. Entin
President and Executive Director
Institute for Research on the Economics of Taxation
[email protected]
(202) 463-1400

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