FLASHREPORT

As the United States Senate takes on the health care issue, there is a clear difference of opinion on whether this $850 billion program will rein in rising health care costs or further bankrupt our nation.  In a piece written recently, Sacramento Bee columnist Dan Walters noted a provision inserted into the 2,000-plus page health care bill that would wreak havoc on California.

Walters wrote that 34 years ago California passed a law that imposed a $250,000 limit on pain and suffering damages in medical malpractice cases.  Walters also noted that during the 1970s, in response to the skyrocketing insurance premiums for malpractice insurance, many doctors threatened to leave the state or abandon specialized practices, particularly obstetrics.

However, California's malpractice cap, which also was enacted in 30 other states, has been put on the chopping block by Speaker Nancy Pelosi in the health care bill pushed through the House.  In the recently approved House health care bill, any state that repeals the malpractice cap would receive "incentive payments"--a modern day payoff.

As noted in by Walters, the Congressional Budget Office (CBO) estimates that state malpractice caps save $54 billion in health care costs over a decade.  But, with double-digit unemployment and projected yearly deficits, the trial lawyers' payoff "incentives" might be too enticing for some of our state officials, even if it creates an ongoing negative impact on Californians' medical care.

Personally, I don't see how this bill can get out of the Senate for multiple reasons.

A recently released letter from the Congressional Budget Office noted that a family of four making $66,000 a year would have to pay out $10,000, or 10% of its income, for health care under the House bill.  Those costs already include the 58% of the premium that the government plans to pick up. But, not increased premiums. The CBO also forecasts that government heath care premiums would be more expensive than for policies sold by private companies, substantially increasing total health care costs for working families.

Furthermore, will seniors allow billion dollar cuts to Medicare? Will labor unions allow a 40% tax on health insurance policies they currently own?  It's highly unlikely, so the bill will probably die.

If the top issues facing our state and nation are paying down the debt and improving our economy, how is spending $850 billion on a new government program going to accomplish those goals? And, with a $21 billion deficit, how will the state of California come up with the $2 billion price tag of this new plan?