Cost Is Key Concern For Schwarzenegger Plan Requiring Californians To Have Health Insurance

[Purveyor]

SACRAMENTO, California: To bring about universal coverage in California, Gov. Arnold Schwarzenegger says people must start thinking about health insurance the way they do auto insurance — as a responsibility everyone must shoulder.

In January, Schwarzenegger proposed a plan requiring all Californians to have health coverage, promising to spread the cost among individuals, businesses, hospitals, insurers and the government.

The idea does well in polls, and Democrats Hillary Rodham Clinton and John Edwards are pushing it in their presidential campaigns.

But a look at how mandatory insurance has fared elsewhere, from Switzerland to Massachusetts, shows it will not be easy to put into practice in California.

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Most of California's uninsured are low-wage workers whose employers do not offer insurance. They also include people between jobs, young risk takers and people who have been rejected by insurers because of their troubled health histories.

Schwarzenegger is proposing to cover most of them through a mix of public subsidies and private mandates. He would force employers to chip in a minimum amount toward employee health coverage, but not the full cost.

The poorest workers would get care through public programs, while those earning a little more — up to about $25,500 (€17,219) for a single person and $51,500 (€34,776) for a family of four — could buy insurance at a discount through a state-run pool.

Some at higher income levels — up to $41,000 (€27,686) for a single person and $82,500 (€55,709) for a family of four — would qualify for limited tax credits to ensure they did not have to pay more than 5 percent of their incomes toward premiums.

Schwarzenegger also would require insurers to sell policies to everyone without regard to health status, with prices based on a person's age rather than medical history. Health economists say that could drive insurance rates even higher as sick people consume more care than they are paying for in premiums.

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http://www.iht.com/articles/ap/2007/11/25/america/NA-GEN-US-Health-Care-Insurance-Mandate.php