July 27, 2008

California Legislature: More Uninsured, Please

By Sam Aanestad

Californians struggling to provide for their family's healthcare needs share a common frustration: it's very expensive.

Unfortunately, one of the bills making its way through the California legislature will add frustration -- and expense -- to their struggle.

For some, finding health insurance coverage can be as simple as participating in an employer-sponsored plan bought in California's group insurance market. Older Americans receive coverage from Medicare, while those with disabilities and few resources use a state program like Medicaid.

But for workers in companies that can't afford to provide coverage, for self-employed and small business owners, for people working part-time or who stay at home to care for children or an ailing parent, health insurance is available through California's individual insurance market.

The individual market allows people to pay monthly premiums, just like employer-sponsored group coverage. The difference is that individual plan premiums are much lower than group plan premiums.

California has imposed so many regulations on the group market that its premiums are often twice as expensive as those of individual plans. For families, group plans now average nearly $12,000 per year, compared with about $3,900 for families buying coverage on the individual market.

As much as $2.59 of wages for every hour worked pays for employer-sponsored health plans (2007 California Healthcare Foundation). Higher pay for workers is sacrificed to fund a form of health coverage that is expensive and over-regulated.

In contrast, individual plans in California are far less regulated and-not surprisingly-far more affordable. As of March 2008, individual health plans in California are among the least expensive in the U.S.

Health insurance premiums in states that heavily regulate the individual market have predictably skyrocketed-like in Massachusetts, in which much-heralded recent "reforms" contributes to Boston residents paying TRIPLE what San Franciscans do for identical coverage.

That difference in affordability may be disappearing.

AB 1962 would impose a mandate for every individual health insurance policy to cover maternity benefits regardless of whether the person needs, wants or can afford this coverage.

The bill would force the following Californians to pay for comprehensive pregnancy coverage:

Women who have had a hysterectomy
Men
Post-menopausal women
Couples who can't have children
Men after vasectomy
Women after tubal surgery to prevent pregnancy

If AB 1962 were enacted, it would become illegal in California for an insurer to try to sell an individual health insurance policy without obstetrical coverage.

This mandate was examined by the independent California Health Benefits Review Program. Its analysis revealed that forcing these policies to cover pregnancy will add $74.5 million to the premiums paid by those trying to buy individual health insurance.

The net result of making individual health insurance less affordable? 2,300 more Californians will become uninsured when they lose the ability to buy any coverage at all when the only policies sold are priced to include maternity benefits.

Increasing the number of uninsured Californians isn't what our state needs. If you oppose making insurance MORE expensive, please ask your state representatives to vote no on AB 1962.

Senator Sam Aanestad, an oral surgeon, represents the 4^th California Senate District and serves as Vice Chair of the Senate Health Committee.