Kuehl-Care Wrong for Californians

Published May 1, 2003

A new plan for a system of government health care in California is being touted by its author as a grand idea. That is a strange description for a measure that would be costly, counterproductive, and a danger to the well-being of all Californians.

The Health Care for All Californians Act, introduced by State Senator Sheila Kuehl (D-Santa Monica), would eliminate private health insurance. A Commissioner of Health would head a State Health Agency, and government boards would make key health care decisions for California residents.

The package is billed as free medical care, covering all state residents. In the first two years there would be no deductibles or co-pay. Under the plan, Californians would receive any procedure or treatment that a doctor or hospital says is medically appropriate, including dental and vision care, skilled nursing care after hospitalization, “self-help programs,” and “translation services.”

Disaster in the Making

Under the Health Care for All Californians Act, the state would pay all the bills, though Kuehl says the plan involves “no new spending.” Since no service, particularly medical care, can be free, the government would have to get the money from new payroll taxes on “all employers, employees, the self-employed, and recipients of unearned income.”

The act also levies new taxes on tobacco and alcohol products. No tax rates are mentioned in the bill, and residency requirements for participating in the program are not outlined.

For most Californians, this measure would be a disaster. The state is more than $35 billion in debt and cannot pay for the programs it currently funds, much less new ones. California is already one of the nation’s highest taxed states, and new levies would cause more workers and businesses to flee.

Since government bureaucrats would be under pressure to reduce costs, this system would stifle innovation, reduce quality, and further limit people’s choices. That is precisely what has happened in Canada, where waiting lists are common and costs high. Since private alternatives are banned there, the only recourse for many is to seek care in the United States.

Fraud, already rampant in Medi-Cal, would thrive under a massive state bureaucracy that hands every resident a blank check for health care. The plan provides no incentive for people to take care of themselves and would encourage irresponsibility.

Solution Lies in Private Sector, Choice

Given the dismal record of government-run health care in the United States and around the world, it is amazing a plan like Kuehl’s could be conceived at all, let alone be taken seriously. Countries such as Sweden and Britain, where state medical care has long been the status quo, are moving to private alternatives. (See “Choice in Europe,” Health Care News, May 2003.)

Kuehl is right that too many people lack health insurance, but wrong to seek a solution by eliminating HMOs, PPOs, and private insurance, expanding bureaucracy, and increasing taxes. Many people also lack car insurance, but the answer is not a government takeover of the automobile insurance industry.

If state legislators want to improve quality of care, restore the doctor-patient relationship, and increase the number of insured, health care must be made portable and not tied to a place of work. Individuals must have more, not fewer, choices in the health care marketplace.

Sally Pipes is president and CEO of the Pacific Research Institute, a California-based think tank. Her email address is [email protected].