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August 17, 2007
The Honorable Tom Torlakson, Chair
Dear Senator Torlakson: Health Care for All-California has forwarded our letter in opposition to AB 8 to the Appropriations Committee. As amended July 18, 2007, the proposed legislation does not contain the cost containment measures needed to provide a fiscally sound health care system. California residents and governments will be financially and fiscally harmed if this legislation is passed in its current form. We urge the Appropriations Committee to vote no on AB 8. Thank you for your consideration. Sincerely yours,
Dan Hodges, Chair
August 17, 2007
The Honorable Tom Torlakson, Chair RE: AB 8 (Nunez) OPPOSE
Dear Senator Torlakson: Health Care for All California, a statewide chapter-based organization, has led the movement to pass single payer health care since 1997. HCA sponsors both SB 840 (Kuehl) and the OneCareNow Campaign, a growing grassroots movement to pass single payer health care. SB 840, now called the “gold standard of health care,” would solve the state’s health care crisis by providing for equitable and affordable universal health insurance and a single standard of high quality comprehensive care while preserving the state’s health care infrastructure of providers, hospitals and pharmacies as private and competitive businesses. We oppose AB 8 for the following reasons: AB 8 will expand the health insurance industry, not solve the health care crisis. First and foremost, under the banner of moving toward universal health care, instead, AB 8 will leave millions uninsured or underinsured while strengthening and perpetuating an insurance system that currently rations health care by excluding those who cannot afford to pay the high cost of insurance premiums. Insurance companies decide what is covered and what is not. They deny care to the uninsured, the underinsured and the insured with preexisting conditions. Health insurance companies ration health care to secure profits. The unsolvable issue for the status quo is that although health care is treated as such, it is not a commodity. It is a life-giving and life-saving service that is needed by everyone. Providing affordable and quality health care for Californians is not the mission of for-profit insurance entities. AB 8 will not alter the profit motives of this industry, nor will it change the responsibility insurance companies have to their stockholders. The reforms AB 8 proposes to place on current insurance practices will not solve the state’s health care crisis. Instead, they will result in higher insurance prices for individuals, businesses and governments. AB 8 does not provide for the necessary cost controls to achieve affordable health care. Both state and national studies indicate that including all residents in a single risk pool that is insured by a government administered non-profit insurance trust fund is the only method that will save billions of health care dollars--enough to provide affordable and comprehensive universal health care. Although AB 8 provides for preventative health care, disease management and administrative cost controls, it does not do enough to control costs. With its piece meal approach, AB 8 cannot achieve the significant cost savings that a single payer system can. In addition to the above measures, a system as provided by SB 840 can control costs by establishing evidenced based standards of care and by utilizing capital investment management, consolidated budgetary authority, system-wide health care planning and the state’s power to negotiate lower prices for durable medical devices and bulk prescription drugs for 36 million Californians. AB 8 does not provide protections needed to guarantee affordability. This bill leaves too many Californians vulnerable to health care reform that will be too expensive, will not provide enough coverage and for many, no coverage at all. AB 8 does not provide for guaranteed affordability and does not limit co-payments, deductibles or other out-of pocket costs. Although AB 8 does allow for premium subsidies for enrollees with household incomes at or below 300 percent of the poverty line, it does not provide a benchmark for cost sharing between employers and employees. AB 8 requires that all defined employers spend 7.5 percent of Social Security wages on health care expenditures, which includes purchasing health care coverage for their employees and could include as well, contributions to health savings accounts and other health care programs that do not provide direct health care coverage. Many employers who currently provide health care coverage spend more than 7.5 percent of Social Security wages for the coverage they provide to their employees. AB 8 does not provide minimum coverage standards for the employer market, which could encourage some of these employers to reduce or drop the coverage they provide. According to a recent Kaiser Family Foundation survey, premiums for employer-sponsored family health coverage have increased by 73 percent since 2000, while wages increased only 15 percent concurrently. AB 8 provides for no state oversight of health insurance rates. A recent joint report by the California Budget Project and the UCLA Center for Health Policy Research finds that “many families spend a substantial amount on health care premiums and out-of-pocket costs, and could face financially devastating medical expenses if they are not adequately protected.” The report states that health care reform legislation should take into account the income needed in California to pay for other necessities such as housing, food, child care, and the risk of extraordinary health care costs. The report suggests placing limits on out-of-pocket costs as well as full subsidies up to 200 percent of the poverty line and partial subsidies “well above” 300 percent of the poverty line. AB 8 does not do this. AB 8 will place many individuals and families in harm’s way. Sincerely yours,
Dan Hodges, Chair
cc: Senator Sheila Kuehl
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