Arnold's Bigger But Worse Plan

by Julia Rosen [courtesy of Working Californians blogs]

It is counterintuitive I admit, to claim that the Democratic legislators plan (AB 8) is better than Schwarznegger's proposal, which actually covers more people. The reality is that it is actually worse to force people into crappy plans that they can't afford than it is for them to go uninsured. It is an ugly calculation for sure. Unless you regulate the insurance industry more than what the Democrats are proposing, or offer a governmental run plan (ala Edwards), it is unacceptable to have an individual mandate. Weintraub doesn't seem to get this.

Democratic lawmakers have criticized his plan as too friendly to the insurance industry, and they don't like the idea of requiring individuals to take responsibility for obtaining coverage, even with hefty subsidies for the poor and the working poor. They have proposed an alternative that would put more of the financial responsibility on employers.

Requiring health insurance is not an anathema to Democrats, but the situation must be right. Pushing high deductible plans as a mandated solution is not the way. By the numbers, Arnold's plan assumes that a family of four living on $61,000 a year in Oakland can afford to spend $12,000 (20% of their income) on health insurance. Try paying for rent or food with in that situation. Health Access report (pdf)

Only 2% of the uninsured, who are making more than 300% of poverty ($60,000 for a family of four) choose to turn down employer-based coverage when given the option. The remaining 18% are unemployed or not eligible for coverage through their employer- therefore having no choice. Is it fair to punish people for not having choices?

There is no pool for affordable care that these individuals can use to purchase care. It is only the high deductible plans that assume they can spend up to 20% of their income on health care that are available under Arnold's proposal.

Arnold simply does not go far enough, nor does he raise enough from employers to make his system work in the real world. It is likely that there will be large numbers of individuals who simply ignore the mandate, just like they do with car insurance. It will also encourage employers to drop coverage for those employees who earn below the poverty threshold. His proposal is less progressive, despite the raw numbers he believes will be insured.