California Business Group Wades Into Health Insurance Debate, Draws Fire
Why is private health care so expensive, and is it worth the money? This week, the California Foundation for Commerce and Education -- a think tank aligned with the California Chamber of Commerce -- weighed in on those basic questions by challenging a widely-held belief: namely, that money spent treating the uninsured is a primary cause of rising health insurance costs.
Research funded by CFCE says inadequate reimbursements from Medicare and Medi-Cal are the main factor fueling insurance premiums, driving up costs by more than 10 percentage points. By comparison, the CFCE study estimates that private health insurance premiums are two percentage points higher because of charges for treating the uninsured that hospitals pass on to other payers.
That's a fraction of the increase a separate study by the New America Foundation attributed to the cost of providing health care services to the uninsured. Gov. Arnold Schwarzenegger (R) has cited the New America Foundation's finding in pitching his health care reform plan.
An author of the New America Foundation study quickly questioned the findings of the CFCE research, and another academic said the CFCE study could be seeking to undermine the economic argument the governor is using to make the case for his overhaul proposal.
Regardless of what's driving up premiums, the question remains: Is the money spent on private coverage worth the results?
Sen. Sheila Kuehl (D-Los Angeles) would argue no -- the state would be better-served by getting rid of private insurance altogether and adopting a single-payer, state-run health care system. The Senate on Wednesday approved that bill and forwarded it to the Assembly, despite Gov. Schwarzenegger's pledge to veto the measure.
As lawmakers worked toward the Friday deadline to pass legislation out of its house of origin, they took action on bills to expand eligibility for Healthy Families and Medi-Cal and reimbursements to counties for mental health screenings.