February 15, 2007

Senate committee reviews the governor's plan

Today's event to watch in the Capitol will be the Senate Health Committee's review of the govenror's health care plan. The committee, of course, is led by Sen. Sheila Kuehl, whose long-term goal is the abolition of the health insurance industry and the creation of a single-payer, government run plan to replace it.

In the Bee's story today, Kuehl makes two points that bear further scrutiny, both involving the linch-pin of the governor's plan, the individual mandate.

First, the senator says she is uncomfortable requiring the working poor to buy insurance. But isn't that what single-payer would do? It would require everyone to have insurance, organized by the government and funded by taxes. To the extent that those taxes are payroll taxes, as Kuehl has proposed in the past, the burden on the poor might be just as heavy as it would be under the governor's plan.

Second, Kuehl says that while she does not like the individual mandate, she does like the governor's proposal to require insurance companies to cover everyone. But those two proposals cannot be reasonably separated. If insurance companies are required to cover everyone without regard to whether they are healthy or sick, then healthy people would have less of an incentive to buy coverage. They could simply wait until they got sick and buy it then. States that have tried the kind of insurance regulation the governor is proposing without the mandate on everyone to buy coverage have some of the highest rates in the nation, because their insurance rolls are heavy with sick people. California probably doesn't want to go there.

If I were a supporter of single payer I would embrace the individual mandate. It seems likely that once you require people to buy insurance, you open the door to more and more regulation of insurance, insurance rates, and the prices charged by doctors, hospitals, labs and drug companies. If you combine the individual mandate with a state-run purchasing pool for the working poor and others who find it difficult to buy coverage, pretty soon you have a very large parallel system that starts to look a lot like single payer. Over time it could swallow the existing system, or at least become the basic plan to which everyone is entitled while the private system survives to provide extras and premium care.

Posted by dweintraub on February 15, 2007 8:30 AM