Economics

ArnoldCare: On the Brink of Termination?

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Ron Bailey warned us last January about some of the problems with California Gov. Arnold Schwarzenegger's proposed health-care reforms, which instead of empowering consumers of health insurance to make their own choices, makes those who can't afford to buy the health insurance the plan will mandate that all Californians own into wards of the state by enrolling them in expensive state programs such as MediCal.

Now the LA Times tells us, despite passage by the state Assembly, that the plan seems set to die in the charnel fields of the state's Senate. Why?

A report by the nonpartisan legislative analyst's office released Tuesday evening questioned some of the Schwarzenegger-Nuñez plan's fiscal assumptions as too optimistic and estimated that by the fifth year of operation, the plan would be spending $300 million more than it was raising.

Even before the report's release, many Senate Democrats expressed concerns about a grand expansion of healthcare at a time when the state is facing a $14.5-billion budget shortfall that may require large cuts in existing healthcare.

Schwarzenegger and [Assembly Speaker Fabian] Nuñez have insisted that their plan will have no effect on the state budget. But the legislative analyst noted that the state's general fund "would be the ultimate backstop," and if the healthcare plan gets out of balance "it could create pressure on the general fund."

……….Even if the bill passed the Senate, it would not go into effect unless a companion ballot measure is approved in the November election. That measure contains the financing for the plan: $2.5 billion in hospital taxes, an increase in tobacco taxes of $1.75 a pack and a requirement that employers spend the equivalent of up to 6.5% of their payroll costs on healthcare or pay into a state fund that would provide those workers with coverage.

George Passantino of the Reason Foundation has more on what's wrong with ArnoldCare. The key: the real problem with health care is cost, not insurance coverage, and Arnold's plan is apt to exacerbate the cost problem.

The headline is, I believe, my very first cutesy reference to the fact that the governor of California is a former actor who starred in a series of action flicks called The Terminator. I hope that will be noted as a mitigating circumstance in any eventual blog-headline show trial come the revolution.