Health Plan :: California health plan ambitious and risky

Governor Arnold Schwarzenegger unveiled a $12 billion-a-year plan to extend health care coverage to most of California’s 6.5 million uninsured and make it the second state, behind Massachusetts, to require everyone to carry insurance. Coverage for the poorest of the poor would be free; for many others, it would be heavily subsidized.

Schwarzenegger also proposed to share the sacrifice by requiring individuals, employers and health care providers to contribute to the cost, saying the program will save billions, in part by providing preventive care, which is cheaper than waiting for people to get sick and treating them in the emergency room.

But for all his optimism, Schwarzenegger is getting some pushback. Some of those who will have to pay are opposed, or at least leery. Economists warn the plan will expose the state to runaway costs. Small employers say requiring them to spend at least 4 percent of payroll on health insurance or pay that much into a state pool will put them out of business.

Doctors are going to be asked to pay 2 percent of their gross profits, and hospitals 4 percent. Doctors are complaining that the cost will be passed along to patients, amounting to a tax on sick people.

Exactly where the insurance industry stands is not clear. The plan could mean a lot of new business for insurance companies — perhaps 4 million to 5 million new customers. But insurers would no longer be allowed to turn people away for medical reasons.

Schwarzenegger said the plan can save money emphasizing preventive care, healthy behavior and technological innovations, such as electronic medical record keeping.

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