Nunez Health Reform Bill Establishes Mandatory Purchase Without Linking to Subsidies for Middle Clas...(g at leastparts of these two bills. If t...),Health

Date:11/13/2007

g at least parts of these two bills. If these bills are joined, even patients with minor health conditions like allergies and asthma could be pushed into the state's high-risk pool. This pool currently provides very limited benefits at a high cost and the Dymally bill does not appear to change this unfair system.

-- Affordability --- lack of price controls. Unlike the auto insurance market under Proposition 103, your bill does nothing to limit rate increases. You have argued that a 15% cap on profits and overhead will control the excesses of insurers but you have not explained how. In fact, capping profits and overhead at 15% of premium revenue will provide a perverse incentive for insurers to raise monthly premium costs so they may keep more money for themselves. During the last seven years premiums have increased three to four times faster than medical inflation. Of course insurers are willing to sell to all if all are required to buy under these conditions.

-- Guaranteed issue --- no true community rating. Your bill purports to limit an insurance company's premium cost variation for individual policies to "age, family status, and geography," but unlike rules in the employer market, nothing further is provided to define those categories. This is particularly important to older consumers. Your bill could allow annual, bi-annual, or even quarterly age-related cost increases based on age, quickly pushing policies into unaffordability for those most likely to need health care.

-- Universality --- no defined benefit. Promising comprehensive coverage while guaranteeing none is not something voters will accept. Your bill punts the key decision about what Californians will receive when they buy health policies until after the bill is passed, leaving tough choices to state bureaucrats more likely to settle for less than legislators, because they are insulated from voter outrage. The required coverage could exclude essential services including prescript
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