Senator Sheila Kuehl’s Floor Statement Health Care Reform and AB 8

If I may add some context to Senator Kuehl's statement (which is very accurate). In general, over the last thirty years, the Republicans have been offering solutions which are idealogical and do not offer solutions that help most Californians (or Americans). The Republicans insistence on having for-profit insurance companies run health-care is a n example of this. What do these companies add?

Thanks to Bush administration policies, the average American will have a lower standard of living into the next decade than he/she had in 2000. The causes are obvious--the assult on unions, unfair trade policies, regressive tax increases combined with tax cuts for the rich, and increased health care costs. Senator Kuehl has offered a method of increasing the income the average American (not to mention the peace of mind that comes from having health insurance) with her proposal, and it will eventually become law, just as Medicare became law. More power to her.

The better thing to do would be to get rid of most insurance and NOT have a single payer government scheme. Insurance should only be for MAJOR health issues. Just like car insurance doesn't pay for gas, oil changes and tires neither should insurance pay for most regular checkups, dental visits, medications etc.
If you introduce a single payer healthcare system you will significantly reduce innovation and could end up killing more people because fewer life saving medications are created. The U.S. is the world leader here, and it is because we allow companies to make money. Take away the profit motive and they have no incentive to go through FDA trials to get approval. Europe used to be a leader in pharmaceutical drugs, but now significantly trails the U.S. Being uninsured doesn't necessarily correlate with life expectancy. Hispanics have a higher life expectancy than whites even though their rates of being uninsured are over 3 times as high as whites. Some people do die because they are uninsured, but that is offset by the amount of people who are saved by new drugs and better care that isn't rationed as it is in Europe. Cancer survival rates are much lower in Europe than in the U.S. because they don't have access to the newest and best drugs.

To insunuate that by getting rid of insurance companies we will no longer do research and develop the newest and best drugs is plain ridiculous. First of all, insurance companies don't do the research, pharmaceutical companies do, barely. Most of the research is done by the National Institutes of Health (NIH), with some private participation. The NIH then turns around and provides "marketing rights" to the pharmacetucial companies that helped in the research. Medicare for all does not in any way affect the NIH budget. Another ridiculous statement...to compare people to cars.

This is why we need SB840:
Health Care Premiums Rise 6.1 Percent
Tuesday September 11, 10:50 pm ET
By Emily Fredrix, AP Business Writer


Health Insurance Premiums Rise 6.1 Percent As More Families Choose to Go Without

The increasing cost of health insurance is putting coverage out of reach for many small to midsize companies and their workers, even though the rise in premiums this year was the lowest increase in eight years.

Since 2001, the cost of premiums has gone up 78 percent, far outpacing a 19 percent increase in wages and 17 percent jump in inflation, according to a survey released Tuesday by the Kaiser Family Foundation, a health care research group that annually tracks the cost of health insurance.

This year, the cost of premiums paid by workers and their employers was up 6.1 percent, while wages rose an average of 3.7 percent and inflation went up 2.6 percent, the survey said. Kaiser estimates that between 1 million and 2 million people join the ranks of the uninsured every year.

"There's no scientific tipping point that you can point to at which health insurance becomes unaffordable," said Drew Altman, the foundation's president and CEO. "But it does seem like we've crossed a threshold where health insurance is increasingly unaffordable for medium-sized employers, particularly smaller employers and average people this year."

Insurance costs probably will rise again next year, according to the survey. Many of the more than 3,000 companies surveyed said they planned to make significant changes to their health plans and benefits, and nearly half said they were very or somewhat likely to raise premiums.

This year, premiums averaged $12,106 for a family of four, with workers paying, on average, $3,281 of that. Premiums to cover a single person cost $4,479, with employees paying $694.

Families typically pay 28 percent of their premiums, while single people pay 16 percent, the survey said, and those proportions have been stable. But the amount workers have been paying has nearly doubled since 2001. This year, monthly contributions averaged $273 for families and $58 for single workers.

The companies surveyed reported that premiums for families increased 6.1 percent, on average. That's the lowest growth rate since 1999, when premiums rose 5.3 percent and cost an average of $2,196 for individuals and $5,791 for families. Health care premiums rose 7.7 percent last year, when individuals paid an average of $4,242 and families paid $11,480.

This year also marks the fourth year that the increase has slowed. But Altman said it doesn't mean much when it outpaces wages and inflation, and now companies and employees are dropping insurance. He said that's why the number of uninsured Americans continues to rise. The Census Bureau estimates 15.8 percent of Americans were uninsured last year, up from 15.3 percent the year before.

As costs rise for workers and companies, revenues for health care insurers continue to soar. But health insurance companies are still paying out roughly the same as they have for years, said Charles Boorady, an equity research analyst with Citigroup. So when insurers charge more for premiums, they're trying to cover what they pay out in claims, he said, and that means profits are fairly level.

"The price increase doesn't looked aimed at expanding margins, it looks aimed at preserving margins," Boorady said.

WellPoint, the nation's largest health insurer, reported profits were up 11 percent in the most recent quarter, to $835.2 million and revenue rose nearly 8 percent to $15.3 billion.

Bob McIntire, senior vice president of health care management for the Indianapolis-based company, said it's trying to keep costs down by helping consumers understand their own spending and even negotiating longer term contracts with hospitals to keep costs in line.

UnitedHealth spokesman Greg Thompson said premiums are rising because of the increasing cost for hospital stays, and people's desire for costly, new state-of-the-art treatments.

UnitedHealth, the nation's second-largest insurer, said earnings rose 22 percent to $1.2 billion, during the most recent quarter. The Minnetonka, Minn.-based company saw revenue increase 5.9 percent to $18.93 billion.

Some 158 million people have health insurance through their employers. Sixty percent of companies offer health insurance to their employees, about the same as last year but down from 69 percent in 2000, the survey said.

Nearly all companies with 50 or more employees offer coverage, with firms with more than 200 employees particularly stable over the years, Kaiser said. But only 45 percent of firms with three to nine employees offer health care, down from 57 percent in 2000.

Many companies don't plan to cancel plans even as costs rise, the Kaiser survey said. Only 3 percent of respondents said they planned to drop coverage next year. Five percent said they planned to limit eligibility, though the survey did not ask them how they would do that.

But more companies are looking at changing benefits, whether by adding lower-cost insurance options or shifting more costs to employees, according to the Kaiser survey and another that was recently released.

Preliminary results of the Mercer Health & Benefits survey of 1,557 employer plans shows more than half of the respondents planned to shift costs to employees through higher premiums, deductibles, copays or out-of-pocket maximums.

The companies said that if they made no changes to their plans from this year, their costs would go up on average 9 percent next year.

The New York-based human resources consulting firm said given those changes, next year's increase to premiums is expected to be 6.7 percent.

Kaiser Family Foundation: http://www.kff.org

To Paul.
Single payer healthcare means price controls. It can cost 800 million to bring a single drug to the market. It doesn't matter whether the government or universities do the research because ultimately a company is the one who ends up commercializing it. The FDA is a huge barrier. Europe does a TON of research, but gets very few products to market.

Statins were invented in Japan, but companies in the U.S. were the first to bring them to market. This has nothing to do with insurance companies, but universal healthcare always leads to price controls and reduced products coming to market. Statins alone have probably saved millions of lives in the world. So by stopping the ability to bring products to the market, you effectively lead to the deaths of more people unintentionally. Many democratic candidates openly state that they want to control the pharmaceutical companies profits, but this will lead to less innovation just like what has happened in canada and europe. Europe used to be a world leader in getting products to market, but now they significantly trail the U.S.

I notice you didn't say anything on my second comment that hispanics have higher uninsured rates but live longer because it is true. Hispanics in the U.S. have one of the longest lifespans in the WORLD, even better than most of Europe. Japanese-Americans live longer than people in Japan (Japan is #1 in the disability adjusted lifespan according to the WHO by the way). African Americans bring our overall life expectancy down, but this may be due to many factors that have nothing to do with healthcare.

You must not have understood my comparison. Competition leads to reduced prices. This is why most countries are capitalist Look at the supplement industry, you can go into any store and get a wide variety of supplements and vitamins for very cheap. This is because competition leads to reduction in prices. Car insurance and house insurance don't cover every minor thing. When you are totally covered by health insurance, there is no incentive for docotors to reduce their prices seeing as the insurance company pays them. That is one reason why it is so much more expensive for the uninsured. People don't have any incentive to take care of their own health, seeing that the government will take care of them. Imagine if we had a single payer government run car insurance. What would happen? People would drive more, and fill up their car with gas all the time. They would get a car wash every week instead of every month. They would get new tires every year instead of every four years.
This ultimately leads to rationing because there wouldn't be enough money to cover all of these expenses. This is what is happening in most countries with universal healthcare. The only way the government is able to reduce the cost of healthcare is by giving less care.

The only thing that I would add for either bill is that insurance companies need to be not-for-profit. This crises only arose in the mid-90's when they all changed to for-profit status. That and some regulation on pharmacy charges would go a long way to alleviate the crises.

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