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Lesson From the States: Lack of Cost Controls Derailed California Health Reform, Led to Budget Overruns and Unaffordable Policies in Massachusetts
Date:4/28/2009

WASHINGTON, April 28 /PRNewswire-USNewswire/ -- Health care reform failed in California last year, and Massachusetts faces budget overruns and out-of-pocket cost increases for patients under its health care law, because cost control was not part of state reform proposals, said Consumer Watchdog today in advance of a U.S. Senate Committee hearing on how state efforts should inform the national debate.

"Real reform is not about who pays for health care, but how much insurance companies, drug manufacturers, hospitals and doctors are allowed to charge," said Jamie Court, President of Consumer Watchdog. "Unlike states, the federal government has the ability to offer a true public plan to compete with and drive down the wasteful overhead of private insurers."

A California health reform effort by Governor Arnold Schwarzenegger focused on making taxpayers, employers and individuals pay for private insurance policies while ignoring out-of-control premiums and other charges by medical providers. Massachusetts' health care law punted the cost control question entirely and is substantially more expensive than expected, with budget overruns and premium increases in the program's first two years alone. In California, the Schwarzenegger plan failed to make it out of a single committee in the Senate after the state's independent legislative analyst said it was too costly and did not contain appropriate cost controls.

Consumer Watchdog said regulation of premiums and benefits are essential for real cost controls, but the only discussion of saving money in the national debate is around prevention, which takes decades to save dollars, and on covering everyone, which in and of itself won't save big money.

"Pushing for expanded health coverage while ignoring soaring health care costs killed health reform in California and threatens the sustainability of Massachusetts' plan," said Carmen Balber, Washington
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SOURCE Consumer Watchdog
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