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Will Schwarzenegger and the Legislature Ever Get to Cost Controls?

by Jerry Flanagan -- 9:00 am

Consumers and small business owners representing millions of Californians who are being priced out of the health care market sent a letter to Senate President pro Tem John Burton urging him to intervene on their behalf. The letter writers blamed HMO profiteering and system-wide waste for "exorbitant increases in our health care costs." To read the complete letter click here.

Governor Schwarzenegger has ignored cost control options and has yet to appoint any members to the California Health Care Quality Improvement and Cost Containment Commission -- created to study cost control strategies. Under the law, the governor must appoint 17 of the 27 members to the commission.

Michael Fry, a retired San Diego native wrote, "I just turned 60 and had no had serious complaints with the coverage until I received a notice from Kaiser that pushes my monthly premium up by 73 percent, to $961 a month, beginning Jan. 1 ... My wife and I can weather the storm - in the short term. We could ride through a year of this. But after that we're in trouble."

Sharon Fowler, a small business woman represents many employers receiving notices of huge increases in their health care cost as the new year approaches. She wrote, "The timing could hardly have been worse for me. My small business is about to shut down temporarily because of the southern California grocers' strike. I provides glass vases to floral departments at Ralphs supermarket, and am about to close for a couple of weeks, putting myself and my two employees out of work at the holiday season."

Pat and Dave Parker of Orange California, who recently attended a Los Angeles Lakers game in order to complain personally to Governor Schwarzenegger at one his $21,200 a-person private fundraisers, wrote: "Health insurers should have to justify their premium increases to the state and the public should have a right to contest unfair increases." To read the Parkers' letter to Governor Schwarzenegger click here.

The letter called on Senator Burton, who authored the landmark law, SB 2, which will provide health care benefits for 1 million more working people but does not contain cost controls, to champion HMO rate regulation similar to rules in place for auto and other types of insurance, prescription drug bulk purchasing, and hospital rate standardization.

SB 2 has been targeted with a referendum to repeal the law by the California Chamber of Commerce which claims high costs make the expansion of health care benefits untenable. The Foundation for Taxpayer and Consumer Rights has called on the legislature and governor to keep the law but make the system as affordable as possible for consumers and business owners by cracking down on profiteering and waste. Governor Schwarzenegger has supported efforts to repeal SB 2.

California is a laboratory for the nation on health care reform and, SB 2 could be a national model if necessary cost controls are adopted.