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Community Commentary: State can't afford this kind of care

October 06, 2010|By Tom Harman

Gov. Arnold Schwarzenegger has a decision to make. Should he allow California to rush out and prematurely create a massive, billion-dollar, state-run healthcare bureaucracy to implement ObamaCare – the national health insurance program passed by Congress earlier this year? I say no, not at this time.

Last week, I sent a letter to Schwarzenegger urging him to veto two bills, Assembly Bill 1602 and Senate Bill 900. These two bills are yet another rushed attempt by California to be "first" to set up something new. In this case, it is the Health Benefits Exchange required by the controversial Patient Protection and Affordability Act (ObamaCare) passed by Congress this winter. The bills go far beyond what is required by federal law and have the potential to cost the taxpayers of California billions of dollars.

AB 1602 and SB 900 enact the "California Patient Protection and Affordable Care Act" (PPACA) and the California Health Benefits Exchange, respectively.

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First, it is important to note that these bills do nothing to contain healthcare costs, expand the number of medical providers and address the absence of price signals to users. The notion that the buying power of an exchange will "bend the cost curve" is completely unrealistic, as the rates paid by CalPERS for health coverage are imperceptible from the rates paid by large groups. Moreover, in a report by the Legislative Analyst (LAO), "The Patient Protection and Affordable Care Act: An Overview of Its Potential Impact on State Health Programs," the LAO notes, "Leaving the creation of the exchange to the federal government would relieve the state of a formidable administrative task." It is not clear how California is in any position to take on additional responsibilities during this time of extreme budget and economic duress.

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