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Nunez and Legislators Urged to Oppose Mandatory Purchase of Private Health Insurance
Date:9/26/2007

income even for a family making $80,000 a year.

3. Taxpayer subsidies without price caps will feed insurers' profit demands and overhead.

The following three points assume that the mandatory purchase requirement supported by Governor Schwarzenegger would be added to consensus health care reform provisions supported by the legislature in AB 8.

The current version of AB 8 already allows insurers too much latitude to sell low-benefit, high deductible plans outside the state pool. Under a mandatory purchase scheme, consumers would have no choice but to buy and taxpayer dollars would flow even if insurers raise rates and reduce benefits.

* Whether subsidies are provided to those earning 300% or even 450% of the federal poverty level, throwing money at insurers will only encourage them to demand more money and provide less coverage.

* Insurers are not required to abide by price caps as a condition of providing taxpayer-subsidized care. Insurers would receive taxpayer funds with no accountability over the product they sell or the price they charge.

4. Those who need coverage the most would face an uncertain future.

As you know, a January Field Poll found that three in four California voters worry they might not be able to afford the costs of a major illness or injury. More than half think that your top priority this year should be to require that affordable health plans be offered without regard to a person's health status or pre-existing health conditions.

* Under the current version of AB 8, insurers could still exclude from coverage the "sickest" 3%-5% of the state residents. The only option for those Californians under a mandatory purchase law would be state-run high-risk policies of unknown price and quality.

* A bill by Assemblymember Dymally that is part of the legislative plan leaves the price and benefits of that high-risk coverage to be decided later. Currently, high-risk coverage costs more than private insur
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SOURCE Foundation for Taxpayer and Consumer Rights
Copyright©2007 PR Newswire.
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