Bell Curve The Law Talking Guy Raised by Republicans U.S. West
Well, he's kind of had it in for me ever since I accidentally ran over his dog. Actually, replace "accidentally" with "repeatedly," and replace "dog" with "son."

Monday, January 08, 2007

Universal Health Coverage in CA?

So, Governor Schwarzenegger proposed today a form of universal health coverage in California. He is being supported by the Democrats and at least tentatively opposed by the Republican minority (for now). The key points of the plan are: (1) all businesses with 10 or more employees must buy health care for them or pay 4% payroll to the state for its aid in providing health insurance; (2) 2% tax on doctors' gross revenue; (3) 4% tax on hospitals; (4) invidual mandate (all must have insurance); (5) state aid for lower income people; (6) no ability to deny coverage (cherry-picking) by insurance companies. Currently, 20% of CA residents are without health insurance, up to 1/3 in areas like Los Angeles.

This is a daring program that I hope California will support. I am amazed that Schwarzenegger is proposing new taxes and an employer mandate.

18 comments:

Anonymous said...

Wow. That is unbelievable. Go Arnie! Almost makes me regret not voting for him (almost). 

// posted by Bell Curve

Anonymous said...

I can't help wondering, "what's the catch?"

Anonymous said...

The catch is that he wants to cut welfare programs by half a billion. He's taking from Peter to give to Paul. Here is the link  to the SF Chronical story on it.

The scariest part is that he wants to put in new rules that cut off support for children of the chronically unemployed. So if your parents are incapable of holding down a job (for whetever reason), Arnold Schwarzenegger wants you to be punished for their failings. Nice guy.

I'll also point out that WAY he's setting up the health care plan benefits private insurance companies enormously. So what we are seeing is that when Republicans get forced to something about health care, they do it in a way that transfers enormous amounts of money to the insurance industry.

Beware of Schwarzenegger. He's not the progressive he wants you to think he is. 

// posted by RBR

Anonymous said...

Also, the plan is that 85% of all premiums collected by insurance companies must be spent on patient care - just 15% for admin and profit. So that's not a big benefit for private insurance companies.

Let's separate this from the welfare issue, where Arnie's thinking is retrograde. With a Republican governor proposing this much, a very good plan with the Dems in the legislature is now possible.  

// posted by LTG

Anonymous said...

From what I have heard, Arnie wants every child to have coverage. But I agree with RBR. I am skeptical of these types of big plans. Much negotiation must take place because regardless of what they come up with, it will have a ripple effect.

I've heard that the annual cost to a family of 4 earning $20K a year would be about $800 year. I haven't heard about the type of coverage they would actually get. Nor how a family of four at would afford even $800 a year. I would be curious how this would work in relation to the current welfare system besides the decreased funds.

Private insurance companies would not be allowed to deny coverage to those with chronic illnesses or to those who have a pre-existing condition. This I like.

I like the idea of offering medical coverage to those who can't afford it. But I won't get excited until I see the details, for that is where the Devil lies. For starters, I’d like some reassurance that my insurance premiums aren’t going to rise in response to this plan. I also have some other concerns that will sound uncharacteristic of me. But some recent events have made me slightly less sympathetic toward the plight of the poor. So my normally liberal heart is bleeding a less freely.

For starters I have a personal acquaintance who is the mother of 3. Her youngest is 7 and she has just managed to "accidentally" get pregnant again. Apparently the ability to remain unpregnant for 7 years was pure luck. She is on public assistance because her husband only has low paid, part time work. This has been the case for all 3 of the children. She has been getting some form of welfare since 1992. She was told by the local welfare office that there would be no extra cash for an additional child. That was 5 years ago. I hope they hold firm. At the same time, I have just discovered that despite the high cost of housing in the area in which I live, I as a single, childless person earn too much to qualify for moderate income housing, much less low income. At the same time, it isn’t enough to really purchase anything that the prevailing market rate.

So while helping the poor to insure themselves is all good and grand, the poor have to help themselves. That said, the middle class could also use some relief, like perhaps the return of real renter's credit.
 

// posted by USWest

Anonymous said...

The governor's proposal also includes expanding the "healthy families" to provide coverage for children in a family of four earning $60,000 or less. So USWest's issue is how the parents get coverage if their employers will not offer it as they are being strongly encouraged to. That's the piece of the puzzle I have not yet seen.

I am optimistic that, with this sort of a start from the Republican governor, we can craft workable legislation better than what Massachussetts got. 

// posted by LTG

The Law Talking Guy said...

I agree with USWest that housing is quickly outpacing health insurance as the most serious crisis for most Americans. I think we will see the housing "bubble" gradually deflate, because housing prices aren't being run up by anything other than supply and demand (there are no added costs, as in health care), and the market cannot bear this much longer. A single-family house is beyond the reach, well beyond, of almost everyone today in a major metropolitan area, where some 2/3 to 3/4 of Americans live, depending how you count it.

Of course, the bubble may not deflate slowly. It may just burst open. That will happen if interest rate nudge up, all the people with ARMs get hosed, and the bottom falls out of the market. It could be quite a tumble, though. Here in LA, houses have tripled in value in less than 10 years. That's not an understatement: Properties that in 1998 sold for $300,000 topped out last year approaching the $1m mark. That's not natural. Deflating to $600K would keep them in line with other investments.

Anonymous said...

Yet again, I'm reminded of the Woody Guthrie lyric...

"California is a garden of eden
It's a paradise to live in or see
But believe me or not
You won't find it so hot
If you ain't go that do-re-mi"

There are large cities (more than a million in the metro area) where housing is still affordable. And there are smaller cities in places like California and towns where housing is too expensive despite the small local population.

Some other areas (New York, Boston, even Chicago) face similar pressures. But California in particular is in danger of driving away its middle class because of the housing situation. 

// posted by RBR

Anonymous said...

It'll be an interesting few years in the housing market I think. The bubble started to inflate around the time the tech wreck came through, and it has been going on abnormally long for an economic cycle. From what I can tell the main reason has been the over supply of cheap money from Japan, who have only just stopped their policy of quantitative easing.

It seems that people have forgotten that the economy moves in cycles, and have completely disassociated the value of property from the cost on the assumption that prices "always" go up.

So any bets on what might happen with Japan stopping the flow of cheap money, the US stopping the deficit increases, China continuing to gradually increase the value of the rimbini, and inflation increasing from the increase in the minimum wage (see newer Citizens article) and, oh say health costs increasing? 

// posted by Spotted Handfish

Anonymous said...

Spotted Handfish makes an interesting point in tying the housing bubble to the international monetary flows. The other thing to consider is the declining value of the dollar.
I am haunted by the 1997 collapse of East Asia.

I am also haunted by the S&L crisis in the late 1980s. When banks start makign riskier and risker loans, you have a serious problem. And that is what has gone on.

Spotted Handfish is also right to point out that housing prices will be affected by the rising costs of everything from health care to education. 

// posted by USWest

Anonymous said...

Spotted Handfish makes an interesting point in tying the housing bubble to the international monetary flows. The other thing to consider is the declining value of the dollar.
I am haunted by the 1997 collapse of East Asia.

I am also haunted by the S&L crisis in the late 1980s. When banks start makign riskier and risker loans, you have a serious problem. And that is what has gone on.

Spotted Handfish is also right to point out that housing prices will be affected by the rising costs of everything from health care to education. 

// posted by USWest

Anonymous said...

Inflation in general will probably cause the Federal Reserve to continue to raise interest rates which will deter people from taking out the loans to buy houses.

The changing value of the Chinese currency will have a number of effects. One of the most important will be that it will make US produced goods relatively less expensive and make Chinese good relatively more expensive. So it could mean an increase in the higher paying manufacturing jobs that many Americans are so nostalgic about. That could compensate for the negative economic effects of any decrease in the housing market. 

// posted by RBR

Anonymous said...

I wonder... who actually owns the US housing debt? Most are non-recourse loans, meaning that if the value of a $1m house goes to $500m, the owner can just give the house back to the bank and won't be stuck, with a deficiency. So the bank takes a $500m loss. Except that the bank already sold and securitized the loans, which someone else is holding. The Chinese?  

// posted by LTG

Anonymous said...

I think RbR misses the point of the effect that a reasonable interest rate rise will have on those who have over extended themselves in the property market. Yes, interest rate rises will deter people taking out loans, but they will also greatly effect those who assumed things will continue going up. Health insurance will become more important for those with stress-related illness. The issues is not that the economy will not balance, but who gets dragged under in the process.

LTG are you sure most are non-recourse loans? For the home-owner, even in that situation, they stand to lose a lot of money. Assuming $1m house being sold for $500k with $200k of the principle paid, the bank's loss is only $300k. Banks insure for these situations and there is a large market in debt products.

What is more interesting is where non-traditional lenders are getting their cash from. 

// posted by Spotted Handfish

Anonymous said...

You may be interested in the following article . And this is from a country where there is universal health coverage as well. 

// posted by Spotted Handfish

Anonymous said...

Of course there will be distributive consequences. Certainly over extended debtors with ARM's on their houses will be suffering as interest rates go up. It will hit the middle classes in places like California very hard and has already begun to do so. This may be part of the motive for Schwarzenegger's moves on health care (while simultaneously cutting aid to the poor - who don't have mortgages and who many middle class voters resent).

I don't think the Chinese own the mortgages on our houses. I think it's kind of funny the way people have a tendancy to worry about the Chinese using their (relatively small) influence on world financial markets to threaten us. It's all very "yellow menace" like.

In a globalized world it is very hard to pin down a national identity for things like "who owns the mortgage debt" etc. Spotted Hand Fish is right to point out that there is a large (and complex) market for these things and it is global in nature - not national or international. 

// posted by RBR

Anonymous said...

What in general programs exist for the help family with low income? WBR LeoP 

// posted by Pharmaceutical

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