Health Care Reform Deal May Erode Private Coverage

"We salute [Gov. Arnold Schwarzenegger (R)] for his hard work" in seeking to overhaul California's health care system, but "good intentions don't automatically yield good policy," a San Diego Union-Tribune editorial states.

In a meeting with the Union-Tribune editorial board, the governor maintained that his health care reform plan is "revenue-neutral" and has no effect on the state budget deficit, the editorial states, adding, "But we are at a loss at how anyone can make such a claim with any confidence."

The proposal -- negotiated by the governor and Assembly Speaker Fabian Núñez (D-Los Angeles) -- "has little serious outside vetting, and even a cursory review reveals two huge fundamental problems," according to the editorial.

The first problem, the editorial contends, is that requiring some employers to contribute 6% of payroll toward health care coverage "is sure to lead many companies" that already contribute more than that "to abandon private coverage -- meaning the state itself would quickly emerge as California's largest health insurer."

The editorial argues that the second problem with the overhaul plan is that the employer pay-or-play mandate "is in plain violation of federal law" regulating employee health benefits.

The editorial calls for the governor to "start from scratch," adding, "An illegal plan that gives employers an incentive to hand over to the state their responsibilities for providing health benefits isn't reform. It's a formula for disaster" (San Diego Union-Tribune, 1/18).