Garamendi Report Examines Health Insurance Costs, Includes Reform Suggestions

Insurance Commissioner John Garamendi (D) on Wednesday released a 73-page report entitled "Priced Out: Health Care in California," which examines health insurance costs and the percentage of uninsured residents and offers a series of reform suggestions, the AP/San Jose Mercury News reports (Jablon, AP/San Jose Mercury News, 8/3). The report found that:

• 6.6 million California residents currently have no health insurance coverage;
  
  
• Premiums for private health insurance have increased by 60% during the last four years;
  
  
• Families and individuals with employer-sponsored coverage are having difficulty as employers transfer more costs to workers; and
  
  
• Administrative costs account for 31% of health care spending in California.

The report includes a series of proposals that will be "the basis for Garamendi's reform campaign," the Sacramento Business Journal reports (Sacramento Business Journal, 8/4). Garamendi intends to run for lieutenant governor in 2006 (Vesely, Oakland Tribune, 8/4). The proposed reforms include:

• A universal health care system that covers everyone in the state, regardless of income, location, race or ethnicity (Sacramento Business Journal, 8/4);
  
  
• A requirement that all insurance companies offer a set of comprehensive medical benefits; and
  
  
• Additional federal funding (Rapaport, Sacramento Bee, 8/4).

"I believe the California health care system is in a death spiral," Garamendi said at a news conference in front of a closed hospital in North Hollywood. Garamendi said the situation "is simply placing every Californian at risk" (Greene, Inland Valley Daily Bulletin, 8/3).

"We are already well on our way to having an inequitable health care system where the wealthy live and prosper while others are priced out," Garamendi said, adding, "Forty-five million Americans and 6.6 million Californians can already attest to this" (AP/San Jose Mercury News, 8/3).

Peter Warren, a spokesperson for the California Medical Association, said CMA supports Garamendi's call for universal health coverage but also favors HSAs.

Michael Cannon, health policies director for the Cato Institute, said Garamendi "hasn't been paying attention to what's been going on in the U.S. with health care." Cannon added that HSAs "are making health coverage more affordable" (Inland Valley Daily Bulletin, 8/3).

Garamendi announced two separate hearings. The first will look at the increasing prevalence of what he termed "skeletal" insurance policies that come with limited coverage and generally have high deductibles (Sacramento Business Journal, 8/3). The hearing will be held next month in San Francisco. A hearing in October will address the profits of health insurance companies (AP/San Jose Mercury News, 8/3). The report is available online. You must have Adobe Reader to view the report.