FIRST INSURE POOR KIDS, FIX DRUG PLANS
AND LEAVE SAVING PLANS ALONE

 

San Jose Mercury News Editorial

Apr. 17, 2006

Looking at the priorities set by Gov. Arnold Schwarzenegger and the Legislature, you'd never guess California has a health care crisis.

Health insurance premiums have risen by more than 50 percent in the past five years, and more Californians -- 6.5 million and counting -- have no health insurance at all. But bills that attempt to address this crisis in a comprehensive way have no chance of becoming law this year, and nobody is seriously trying to broker a compromise plan that could gain broad support

Maybe next year. In the meantime, California could make progress on three important fronts, helping to clear the way for major health care reform.

INSURING CHILDREN:

The single most important is Sen. Martha Escutia's SB 437. It would provide comprehensive health coverage to California's 1 million uninsured children -- many of whose parents are working several jobs.
During the governor's 2003 campaign, he said: "I think it is important that we take care of our children. And we have to make sure that every child in California is insured. That is the most important thing.''

He was right. Yet last October, he vetoed the California Healthy Kids Program. He said it did not have a funding source -- but that's in part because he also vetoed companion legislation that would have emulated Santa Clara County's model program, seeking private donations and matching funds from the federal government.

This year, Schwarzenegger must work with the Legislature to provide children's health insurance. It will save California money in the long run -- not only by preventing expensive emergency-room visits but also by helping kids succeed in school and removing a terrible source of stress from hardworking parents.

PRESCRIPTION DRUGS:

The Legislature and the governor need to find a compromise on prescription drug costs. They came close last year, but talks broke down in the midst of the initiative battle between pharmaceutical companies and consumer groups. Voters rejected both propositions, putting the issue back in the hands of Schwarzenegger and the Legislature.

The governor admitted in January that his efforts to lower Californians' prescription drug prices had been inadequate. Residents now spend $4.2 billion each year on prescription drugs, nearly $1.5 billion more than they did in 2003. Schwarzenegger wisely opposes price controls, but there are market-driven methods to achieve savings. He should get behind Assemblyman Dario Frommer's legislation, which would allow the state to negotiate prices for prescription drugs the same way Veterans Affairs does for its patients.

HEALTH SAVINGS ACCOUNTS:

Unlike children's health and prescription issues, this is one in which lawmakers need to refrain from doing anything.

Republican legislators, taking their cue from President Bush, have introduced four separate bills that would give tax credits to consumers and businesses for contributing to health savings accounts. It's a bad idea that would both reduce state income and push up costs.

Health savings accounts allow consumers to put aside tax-free money for medical expenses -- already a saving. The theory is that consumers will use it to purchase their own insurance. But low-income consumers can afford only high-deductible plans to cover catastrophic problems, and they still won't have coverage for the preventive care that can prevent major illness. Over time this will mean more Californians with expensive, chronic illnesses, further driving up health care costs for everyone.

Medical savings plans are great for wealthier individuals who use them to supplement health insurance, but they are no solution for the currently uninsured.

These are piecemeal approaches. But each should be compatible with any major reforms to follow -- and in any case, they are the right thing to do. If Republicans and Democrats in Sacramento can find common ground on some simple issues, it could inspire them to work harder in 2007 on comprehensive health care reform.

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