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The 7 Key Questions About the Schwarzenegger/Nunez Health Care Compromise
Date:9/5/2007

arify your current stance.

These questions must be answered for the public before an eleventh-hour vote of the Legislature on the plan, since there will likely be too little time for full discussion and debate of your reported compromise. We look forward to seeing your final proposal, and your answers to the following questions:

1. If all patients will be required to buy coverage, will there be a cap

on how much they must spend?

Neither the most recent version of AB 8, the bill sponsored by Speaker Nunez, nor the limited outline of the Governor's proposal limits yearly health care payments -- combined premiums, deductibles and copays -- by employees or individual purchasers with incomes over 300% of the federal poverty level. Nor have either of you been willing to embrace state regulation of health insurance premiums, despite the effective model in the property casualty insurance system. With premiums increasing 250% faster than medical inflation, this is a key concern.

We have read that you are considering a cap of 5% of income on the cost of insurance premiums, which is a step forward. Yet if the 5% cap can be met with a very high-deductible plan, IT would not make health care affordable to middle-income Californians. For example, a family of three making $50,000 per year would actually pay $7,500 for a $5,000 deductible plan if a family member needed even minor hospital care. Copays could add thousands more.

We are also concerned that you will concede to the profit demands of insurers, hospitals, and doctors whose rates are not capped under your proposal by shifting costs to individuals. Low-benefit policies that either do not limit out-of-pocket costs or limit them at such a high level that purchasers risk medical bankruptcy when they get sick keep people from seeking care until their illness is critical and more expensive to treat. Those policies secure profits for insurers who know patients will be reluctant to use their ins
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SOURCE Foundation for Taxpayer and Consumer Rights
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