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The Good, the Bad, and the Ugly of the Nunez/Perata Health Plan

SANTA MONICA, Calif., Nov. 6 /PRNewswire-USNewswire/ -- The scant details of the health care compromise released today by California Assembly Speaker Fabian Nunez and Senate President pro Tem Don Perata provides some potential good news for low-income kids and their families but would guarantee a windfall for private health insurance companies out of the pockets of the middle class and taxpayers, according to the Foundation for Taxpayer and Consumer Rights (FTCR).

"The only good news in the plan is that it would insure kids and low-income families, while middle-income families will have to pay whatever insurers choose to charge or be left uninsured," said Jerry Flanagan of FTCR. "The plan's financing does not add up to affordability for the state, the health care system, or patients. Middle class families will either be priced out of coverage or forced to accept a bare-bones 'junk insurance' policy. The legislature should focus on protecting kids this Thanksgiving and give up on the mandatory purchase plan that protects insurers at the expense of the middle class."

The Good

-- More kids insured with comprehensive benefits.

-- Taxpayer subsidies to provide low-income parents access to same

benefits through the state "Healthy Families" program.

The Bad

-- Unlimited taxpayer subsidies for private insurers, via tax credits

for families earning from 250-450% of the federal poverty level to

allow them to purchase uncapped private insurance.

-- An exemption from the mandatory purchase requirement for those

whose insurance costs would exceed 6.5% of income is illusory; a

state medical board can just accept steadily lower policy benefits

to achieve "affordability."

-- The proposal fails to define a minimum acceptable health care

benefit, even though individuals will be forced to buy such


-- Middle class families unable to afford an average policy, currently

over $12,000 a year, would either be forced into cheap "junk

insurance" that protects only insurance companies, or remain


The Ugly

-- Those who fail to pay for coverage will have their wages garnished.

-- Nothing in the plan limits what insurers can charge in monthly


-- The maximum 6.5% of payroll costs that employers must pay for

employee health care is lower than the current workforce average,

meaning that more of the cost will be borne by workers.

-- There is no mention of "community rating" in the plan. Community

rating, in effect in some form in 17 states, can prohibit the use

of health status, age, gender and industry to calculate insurance


-- As in Massachusetts, the plan is not universal. Large numbers of

middle-class Californians are likely to be priced out of coverage.

FTCR is California's leading public interest watchdog. For more information, visit us on the web at

SOURCE Foundation for Taxpayer and Consumer Rights
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