California Nurses Urge Rejection of Flawed Health Reform Bill, AB 8

The California Nurses Association/NNOC/AFL-CIO strongly opposes Assembly Bill 8. Enacting a bad, fundamentally flawed bill is neither sound nor humane health policy.

CNA/NNOC opposes any proposal to place California families further in thrall to an insurance industry that has created the present crisis. We are particularly against the proposal by Gov. Schwarzenegger, which could still be a part of AB 8, that would require all uninsured individuals to buy insurance.

One of the greatest failings of our current healthcare system is the growing calamity facing Americans who are already insured. A Kaiser Family Foundation report to Congress earlier this year noted that one in six adults who are privately insured have “substantial problems paying their medical bills.”

Forcing more people to buy insurance will create a huge windfall in profits for big insurance companies but will do nothing to protect California families – in fact it will increase their health insecurity. A Zogby-UPI poll in February found that 42 percent of insured Americans said their insurer had refused to pay a medical bill.

It’s worth recalling that the Massachusetts law upon which AB 8, and the Schwarzenegger plan it represents, are modeled, has been a dismal failure. The only people signing up for the mandatory insurance are those with full or partial state subsidies

CNA/NNOC is opposed to AB 8 for a number of reasons, including:

 
It fails to address skyrocketing premium costs – up 80% in California this decade far exceeding average wage increases – or limit climbing co-pays, deductibles and other fees being tacked onto health coverage. Forcing more people to buy insurance without curbing the insurance industry’s profit gouging will exacerbate a growing calamity at a time when half of all bankruptcies and a third of credit card debt are caused by medical bills.

•  It fails to limit rising prescription drug costs, especially notable at a time when Gov. Schwarzenegger has just eliminated funding for his “voluntary” drug price restraints so ballyhooed last year by the governor and the authors of AB 8. Already nurses daily see patients unable to afford medicines they’ve been prescribed or who take medication irregularly or share it with other family members due to prohibitive costs.
•  It fails to even require insurance companies to provide insurance. They would not have to offer coverage to those with serious medical conditions who would instead be dumped into a publicly funded high risk pool, earning big insurance companies millions in additional profits while bankrupting the public pool with the sickest, costliest patients.
•  The 7.5% payroll tax on employers in AB 8 is substantially less than most, especially unionized employers who now provide health benefits, currently pay. The result would likely be a stampede of employers demanding their employees accept cheaper, substandard plans, or seeking to drop coverage altogether. At a time when 90% of labor disputes are already caused by employer efforts to cut health benefits, this plan would create an explosion of further cost shifting to workers and more labor strife.
•  AB 8 does nothing to protect employee choice of physicians, hospitals, or other providers. Employers could continue to limit coverage to network providers.

Provisions to “limit” individual expenditures are in the real world meaningless. Under AB 8’s framework they will not prevent continued cost-shifting, since there is no provision for real cost control, and would therefore simply enshrine insurance company profits.

Finally, enactment of AB 8 would create a huge political windfall for the career politician who inspired it and would receive the most credit: Arnold Schwarzenegger.  The governor, who has already appeared on national magazine covers for proposing virtually all the components of AB 8, would wear enactment of the law as a victory laurel to boost his candidacy against U.S. Sen. Barbara Boxer in 2010.

There is a genuine healthcare reform alternative, SB 840, which would establish a publicly financed system, based on an improved Medicare for all, which would guarantee health coverage for everyone, assure real choice of provider, protect families against rising costs, and end insurance industry interference with care.

Enacting bad legislation today would undermine the growing momentum for real reform – as evidenced by the recent Field poll which showed support for a single-payer system, such as Medicare, increasing and support for an AB 8-insurance company plan plummeting.