UCSF's Kahn Speaks Out on Comprehensive Medical Insurance

SB840, a bill passed by the California state legislature but expected to be vetoed as too costly by Governor Arnold Schwarzenegger, would provide comprehensive medical insurance for every Californian. James G. Kahn, professor in residence at UCSF's Institute for Health Policy Studies, believes Gov. Schwarzenegger is wrong to veto the bill. Kahn explained his opinions in a recent interview. The governor has argued that SB840 was too expensive. How would it have been paid for? The system was to be funded in two ways, with details to be decided by a commission set up by the bill. First, funds from existing programs, such as Medi-Cal, Healthy Families and Medicare, would have transferred into the program. Second, the commission was to set up equitable premiums that would be affordable for everyone. These would havelikely included premiums paid by employers (probably 6-8% of payroll) and employees (3-4% of income). This would have replaced the highly variable amounts now paid by companies and individuals with a fair and consistent contribution. There would most likely not have been co-payments for service, at least at first, after which low co-payments (less than today) would have been used if needed. What would this change have meant to individuals and businesses? The proposed premiums, on average, would have provided savings to individuals, compared with current spending, which includes premiums, deductibles, co-pays and excluded services. Those businesses that are currently burdened with excessive costs for employees' health care would have benefited by the change to an equitable system of financing, and businesses now paying nothing would need to contribute. By controlling health care cost inflation, the program would have increased savings over time. Are there that many people in California without health insurance? Approximately 6.5 million Californians, nearly one in five, lack health insurance. These individuals do not have regular access to care. Millions more are underinsured and face catastrophic financial problems in the event of serious illness. Even those with insurance face loss of coverage with job change. Are there models of this type of coverage? SB 840 used proven methods from programs such as Medicare and the Veterans' Administration. It built on successes in many developed countries which have covered all of their populations, at 1/3 less then the cost in the U.S. A respected and impartial business consulting firm in Washington, DC, the Lewin Group, has confirmed the financial feasibility of SB840. Can you give more detail on how money would have been saved? SB840 was the truly rare opportunity to pay less and get more. Instead of spending 15-20 cents of each health care dollar to juggle hundreds of insurance plans, SB840 put the money where it is intended-into health care. It would have provided everyone with the same insurance plan, so the system could have shifted 15% from paperwork to manage insurance to health care. Plus, the system would have used purchasing power to get lower prices for drugs and other supplies. These savings would have been enough to allow the system to fully cover everyone, with money to spare. But could individuals still pick their health care providers? Everyone would have been able choose the medical provider they like-whether a private doctor, an HMO or a public clinic. Unlike a system where the doctors work for the government, under SB840, health care providers would have been paid fee-for-service or a monthly fee per patients, just as they are now, but with only one-tenth the insurance hassle. How about people with chronic health problems? Would they have trouble getting care? All medically needed care would have been covered-outpatient, inpatient, emergency, lab tests, x-rays, mental health, drugs, dental, rehabilitation, durable medical supplies and so on. This permits appropriate attention to prevention and coverage during severe medical crises. This sounds a bit like socialized medicine. What do you say about that? SB840 is all-American. It was designed for the people and by the people. It combined our fine practical sense with our commendable compassion. It used government the right way - by preserving our freedom of choice within our private health care delivery system, while providing financial security for health care for all of us.