There’s No Such Thing as Zero-Risk Health Reform, Not Even in California

By Michael Russo
Health Care Advocate and Staff Attorney
California Public Interest Research Group (CalPIRG)

The Senate Health Committee’s rejection of California’s comprehensive health care reform bill, ABX1-1, was a triumph for the fear of change and a loss for California. Although the legislation would have prevented insurers from denying coverage to the sick because of pre-existing conditions, created a three-million strong purchasing pool to enhance consumer bargaining power, extended coverage to 70% of the state’s uninsured, and given small business owners an affordable way to get coverage for themselves and their employees, it nonetheless went down to defeat last week.

Given all that health care reform would have done to mend our broken health care system, the vote is a missed opportunity. But as damaging as this setback is, it would be far worse if California drew the wrong lessons and dropped the pursuit of meaningful health care reform altogether.

Voiced opposition to the bill rallied around the financial risks of the plan, given the slowing economy. The real reasons were sometimes another story – tobacco companies decried the fiscal irresponsibility of the bill, but one suspects that they were more concerned with the impact the proposed cigarette tax would have had on teen smoking. But the unspoken assumption of the financial argument was that health care reform must be low-risk and pursued in the heat of a booming economy.

But the logic of this opposition is fundamentally mistaken on two fronts. First, the bleak economic outlook was a reason to vote aye, not nay. ABX1-1 would have served as a powerful stimulus, giving California’s working families more money in their pockets through health care subsidies and tax credits, financed not just from fees levied within the state but also through four billion dollars per year in federal funds.

Similarly, the fears that future revenue shortfalls could lead to benefit cuts seem to assume that the present $1.1 billion cuts into our bare-bones Medi-Cal program are somehow preferable to possible later cuts into a better-funded and more comprehensive program. Notably, the Legislative Analyst’s most pessimistic scenario showed a possible $1.5 billion deficit five years after the plan took effect – only slightly worse than what we’re living with right now.

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