CALPIRG Blog

The Senate Health Committee’s rejection of California’s comprehensive health care reform bill, ABX1-1, was a triumph for the fear of change and a loss for California.  Although the legislation would have prevented insurers from denying coverage to the sick because of pre-existing conditions, created a three-million strong purchasing pool to enhance consumer bargaining power, extended coverage to 70% of the state’s uninsured, and given small business owners an affordable way to get coverage for themselves and their employees, it nonetheless went down to defeat last week.

Given all that health care reform would have done to mend our broken health care system, the vote is a missed opportunity.  But as damaging as this setback is, it would be far worse if California drew the wrong lessons and dropped the pursuit of meaningful health care reform altogether. 

Voiced opposition to the bill rallied around the financial risks of the plan, given the slowing economy. The real reasons were sometimes another story – tobacco companies decried the fiscal irresponsibility of the bill, but one suspects that they were more concerned with the impact the proposed cigarette tax would have had on teen smoking.  But the unspoken assumption of the financial argument was that health care reform must be low-risk and pursued in the heat of a booming economy.

The logic of this opposition is fundamentally mistaken on two fronts.  First, the bleak economic outlook was a reason to vote aye, not nay.  ABX1-1 would have served as a powerful stimulus, giving California’s working families more money in their pockets through health care subsidies and tax credits, financed not just from fees levied within the state but also through four billion dollars per year in federal funds. 

Similarly, the fears that future revenue shortfalls could lead to benefit cuts seem to assume that the present $1.1 billion cuts into our bare-bones Medi-Cal program are somehow preferable to possible later cuts into a better-funded and more comprehensive program.  Notably, the Legislative Analyst’s most pessimistic scenario showed a possible $1.5 billion deficit five years after the plan took effect – only slightly worse than what we’re living with right now.

Second, looking at the fiscal outlook of any comprehensive health care reform plan will always show high risks.  The reason is simple – as all Californians know, health care costs are rising, and the future cost and quality of just about everybody’s coverage are deeply uncertain.  The status quo is already incredibly risky, and inflicts billions of dollars of costs on California’s families and businesses, undermining personal security and strangling entrepreneurial innovation.

The question is not whether health care spending will continue to rise unpredictably – rather, it is whether there will be a comprehensive program to contain costs and help those who need assistance, or whether Californians will be left on their own to the tender mercies of a rapacious insurance market.  Any plan will have risks, and protecting the general fund at the expense of the state’s long-term economic and physical well-being is no prescription for success.

There will always be a thousand reasons for inaction on health care.  Making real progress will require that we draw the right lessons from ABX1-1’s defeat.  Opponents of reform would have us believe it failed because it was not a plan with zero risk, and the economy was not booming.  This is a dangerous mirage that will leave the reforms California so urgently needs forever out of reach.  

 Instead, we should resolve to keep the catastrophic costs of maintaining the status quo at the center of the continued health care fight.  There are powerful interests opposed to any change – Big Tobacco, Big Pharma, and Big Insurance – and they will waste no opportunity to wave the fearful specter of a budget meltdown to drive us away from reform.  This time the fear won.  If there’s anything good that comes out of last week’s vote, it’s the hope that soon California will see through the rhetoric of these powerful interests and embrace reform instead.