California's failed health reform attempts offer useful lessons

California's failed attempt at remaking the state's health care system provides useful lessons for participants in the current federal health care debate.

"The similarities are 'downright eerie,' in the words of one expert," The San Jose Mercury News reports. "One attempt - Gov. Arnold Schwarzenegger's gambit in 2007 to extend coverage to millions of uninsured Californians - died in a legislative committee amid worries that the state couldn't afford the multibillion-dollar price. Now, with similar political dynamics at work, Democratic President Barack Obama is trying to succeed where his Republican counterpart in the nation's largest state fell short." Some of the "key participants in Sacramento's health debate" have suggestions for federal lawmakers: "Stop bickering and unite behind a plan, or risk losing everything. And keep the debate focused on what average Americans have to gain from reform" (Zapler, 9/29).

The Sacramento Bee reports that California's experience with establishing a health insurance exchange is a useful model: "The program folded in 2006, partly because health insurers, small businesses and consumers were never fully on board. … The exchange could not get the volume and participation required to reduce insurers' risks and spur the market to lower premiums. As a result, the program became a de facto high-risk pool that mostly insured those in poor health and cost insurers the most money. When it folded, Pac Advantage was left with only three insurance carriers." Paul Grgurina Jr., who headed the exchange, says the model was flawed because it was voluntary for insurers and companies, and most chose not to participate. The proposed federal exchange, in contrast, would be mandatory (Calvan, 9/29).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.