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July 17, 2007 > California's broken health care system - Governor Schwarzenegger's view

California's broken health care system - Governor Schwarzenegger's view

Submitted By Aaron McLear and Sabrina Demayo Lockhart

With skyrocketing health care costs making it difficult for employers to compete, Governor Arnold Schwarzenegger spoke to the Bay Area Council, which has helped to shape business in the San Francisco Bay Area for more than 60 years. The Governor discussed the advantages of his comprehensive health care plan - reducing health care costs, holding the line against skyrocketing premiums, creating a healthier and more productive workforce and asking all sectors - not just business - to share responsibility for fixing our broken health care system.

"Health care reform is a shared responsibility, something that provides reliable and affordable care for everyone and helps California employers in the process," said Gov. Schwarzenegger. "Others would place the burden squarely on employers, having them pay a minimum of 7.5 percent and even then not everyone would be insured."

Under the Governor's plan, employers won't shoulder the health care burden alone. Government, individuals, insurers, providers - and employers - all share responsibility.
* Employers with businesses with 10 or more employees who choose not to offer health coverage will contribute four percent of payroll toward the cost of employees' health coverage.
* Individuals must have a minimum level of insurance to ensure that those with insurance no longer pay for the uninsured.
* Government will return $10-15 billion to doctors and hospitals; provide subsidies for low-income families to buy health coverage; and expand Medi-Cal and Healthy Families programs.
* Insurers must guarantee individuals access to coverage in the individual market, spend 85 percent of every premium dollar on patient care and make "Healthy Actions" benefits available to promote healthy behaviors.
* Health care providers will receive increased Medi-Cal rates and contribute to funding the state purchasing pool.

Companies with less than 10 employees - a full 80 percent of businesses in California -are exempt from contributing to the purchasing pool under the Governor's plan.

"The business share of the hidden tax is $14.7 billion a year. Unaffordable insurance also contributes to a less competitive workforce because employers are unable to offer benefits as an incentive and employees can't afford to keep their coverage. Another problem is many people feel trapped in their jobs because that's the only way they can get coverage," said Gov. Schwarzenegger. "By working together, we can fix a problem that is poisoning our business climate and hurting hard-working Californians."

Two recent reports underscore the pressing need for health care reform. The UCLA Center for Health Policy Research released a report with the key finding that despite a strong economy, job-based insurance is eroding, leaving millions of Californians vulnerable to illness and bankruptcy. According to a study recently released by researchers at the University of California, Berkeley, no job losses are expected under the Governor's proposal. In addition, any increases in business costs will be offset by reduced health insurance premium growth, improvements to productivity and an infusion of new federal dollars into the state.

Following the Bay Area Council speech, Governor Schwarzenegger joined Safeway Chairman and CEO Steve Burd and Safeway Executive Vice President Laree Renda in a tour of the Safeway Health & Wellness Center.

"This is a great example of a business investing in the health of their employees. By promoting wellness and encouraging preventive care they have cut health care costs for the company and their employees - which is important because the cost of health care is dramatically increasing every year," said Gov. Schwarzenegger.

Under the Governor's plan, employees can be rewarded for healthy choices, promoting better health and greater productivity. The Governor's reforms reward prevention and wellness. People who take preventative health actions-by participating in smoking cessation, diabetes management, weight reduction, breast cancer screenings and immunizations programs-can get benefits and incentives from their health plans, including premium reductions.

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