CALPIRG Blog

The Los Angeles Times recently published a partial transcript of a discussion they had with health care advocates (including me) about the Governor's plan for health care reform. You can read it here.

The article mostly talks about the issue of affordability -- the Governor's proposal includes a mandate that would require everyone to buy health insurance, and while some lower-income people will get subsidies, those just above the cut-off will have to do so without assistance. But affordability isn't just about expanding subsidies or exempting some people from the mandate. Reform won't work unless consumers can get a fair shake when dealing with insurance companies, and have access to useful coverage at an affordable price.

That's why insurance market reforms are so important. The Governor's proposal would prevent insurers from refusing to cover the sick and the old and limit their ability to discriminate against them by charging them higher premiums. His plan would also require insurers to spend 85 percent of the premiums they take in on actual medical benefits, rather than administrative costs or excess profits. There are currently some loopholes in these policies that we're working to close, but they're part of the right approach, since they help consumers get access to coverage and push insurance companies to provide products with a good value.

Finally, it's critical that in expanding coverage, people are able to buy insurance as part of a group. Consumers who buy insurance on their own have the deck stacked against them -- the process is slow and confusing, and individuals don't have the bargaining power necessary to get a fair deal from insurers. The same coverage can cost almost five times as much on the individual market. Requiring all Californians to buy insurance but not providing them a guaranteed way to get a group rate could wind up being a huge give-away to insurance companies, at the expense of consumers. That's why we support opening up a government-administered purchasing pool to all Californians, so that group coverage is always an option.

Making health insurance affordable has to be a keystone of reform, and keeping insurers honest is one of the most important ways of getting there.