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

ance and has a limit of $75,000 in annual medical payments -- roughly the cost of a one-week hospital stay.

In addition, those who are insured now and fall ill are at least able to retain their existing coverage. They may face huge cost increases but for the most part not the threat of cancellation. Under 1366.115 of AB 8, it appears that individuals would be required to re-apply for their private coverage after the first year, a dramatic policy shift that virtually guarantees people will lose their coverage within a year of a major illness.

5. Mandatory purchase of private insurance will uninsure some of those who currently have coverage.

Under the current version of AB 8, some employed Californians will not be able to afford to keep their existing coverage. They will be forced into higher-deductible plans or drop coverage altogether.

AB 8, as well as the governor's proposal, caps an employer's contribution to health care coverage at a level below the amount that most employers currently spend on coverage. Under AB 8, employees are required to buy coverage -- an employee mandate -- and their "share" of cost would make up for the employer's reduced payment. Such a system offers shelter to employers facing large health care cost increases and requires workers to fund the difference for rapidly rising health care premiums.

* An individual employee or family earning more than 300% of the poverty level under the current version of the Nunez bill would not be required to spend more than 5% of annual income on health care. While this may exempt many families from the requirement to buy insurance, it will not help them get comprehensive health care. According to a Kaiser Foundation report, families who receive coverage from an employer now pay an average of $3,281 per year, not including deductibles and co-pays.

* Families of four earning 300% of the federal poverty level, $61,950, already pay more than 5% of income on their employer-pr
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SOURCE Foundation for Taxpayer and Consumer Rights
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