A post by Andrew Barna
Well it has been a few months since I last posted on Hospital Impact, but with the new year, Gov. Schwarzenegger's plan to cover the 6.5 million uninsured in CA, the President's tax incentive plan is being dusted off again, and pretty much everyone is joining a coalition to tackle the problem of the uninsured, it seemed like time to rejoin the conversation.
I have perused the Schwarzenegger plan and frankly I am skeptical. Here are a few initial impressions.
First of all, the plan to tax hospitals and physicians in order to fund a MediCal increase just doesn't make sense. As the saying goes, why rob Paul to pay Peter? There just doesn't seem to be a point to tax providers. They are at the end of the food chain, so no new money is being added to the system that wasn't already there. There is no doubt that MediCal is severely underfunded - it pays between 9 and 13 cents on the dollar - but taxing providers is equivalent to cutting reimbursement.
One of the other big funding sources for this plan is a mysterious $5B coming from the federal government, but where is this money coming from (does the federal government match state medicaid dollars?). I know we have left SCHIP money on the table, but $5B is a lot of money.
The requirement for businesses with 10 or more employees to either provide insurance or pay into a state pool is not a bad idea on its face. It puts new money into the system and puts that money to good use. Unfortunately, CA is already a difficult state to do business in and this will be seen as putting an unfair burden on employers.
As for the President's perennial tax shifting scheme to help people pay for insurance coverage, I have said it before and I will say it again: unless the working poor see more money in their paychecks each week, they won't be able to buy insurance. The promise of less taxes/more refund on April 15th will not give the working poor the cash flow to pay monthly premiums.
The relatively good news is that more and more people are acknowledging the problems with our health system and jumping on the bandwagon to fix them. Perhaps a Democratically lead Congress can make healthcare a priority, but we still need to resolve some fundamental issues: mis-aligned incentives and who ultimately is going to pay for the healthcare we want.