Myths and Facts About California's New $7 Billion Healthcare Tax
California employers and workers are facing the threat of a new $7 billion health care tax. Proposition 72 will tax California employers and employees to create a government-run health care scheme operated by a huge new state bureaucracy. Proposition 72 contains no cost controls and no guarantee of choice of health plan, doctor or hospital for workers and their families in the new state-run program.
Here are some myths the supporters of the health tax and government-run health care system would like you to believe, and the real facts about the devastating impacts of Proposition 72 on Californians.
Myth: Proposition 72 simply expands employer-based health care coverage.
Fact: Proposition 72 will not simply expand employer-based health care, but will in fact create a huge government-run health care system funded by a new $7 billion tax on workers and employers. Workers will have to pay for 20 percent of the cost of health coverage, or a total of $1.7 billion in the first year Proposition 72 is fully implemented. The state will decide what benefits the workers' health plan will include, what providers will be authorized to treat patients and how much it will cost. There are no caps on how much the state will be able to charge businesses or workers for the health care scheme created by Proposition 72.
A state government board of bureaucrats is given extraordinary power to implement Proposition 72, which states "the board shall have authority and fiduciary responsibility for the administration of the program, including sole and exclusive fiduciary responsibility over the assets of the fund." It also states that "the board shall administer the program in a manner that assures that the fees and enrollee contributions collected pursuant to this part are sufficient to fund the program, including administrative costs."
Myth: Employers and workers already covered by employer-based health care will not be impacted by Proposition 72.
Fact: Employers who currently offer employee health care coverage, and their workers, will be damaged by Proposition 72. Businesses that already offer employee health coverage will have to apply to the new state bureaucracy for a credit against the Proposition 72 health tax, as well as file additional paperwork regarding the status of each worker's health coverage. Because of the hugely expensive mandates in the bill, employers will have little choice but to attempt to shift as much of the cost to workers. Many will decide to place their employees in the government-run health plan to avoid all the cost and hassle of complying with Proposition 72's rules. Still others will have to consider high deductible policies that are authorized in Proposition 72 but which requires employees to spend thousands of dollars out of their own pockets before the coverage kicks in.
Workers who end up being covered by the government-run health plan will have no guarantee of choice of plan, doctor or hospital. People who have excellent plans now could end up losing access to their existing doctors and hospitals and have to be treated by providers chosen by the government.
Myth: Proposition 72 will help the uninsured and ease the health care cost crisis for public programs and hospitals.
Fact: Proposition 72 will not provide health coverage for most of the state's uninsured who will still rely on emergency room care and public health programs. At best, Proposition 72 only applies to about 1 million of California's 6 million uninsured, at a cost of $7 billion in the first year alone that it is fully implemented. Further, thousands of people who now have a job and health coverage will join the ranks of the unemployed and the uninsured because the crushing blow Proposition 72 deals to the bottom line of businesses will force many of them to close or move out of state.
Myth: Proposition 72 will help control health care costs in California.
Fact: Proposition 72 will not control health care costs. Proposition 72 contains no caps on administrative fees the government-run health system can collect, no limits on how much the government-run health plan can cost, and no cap on how much employers and workers will be forced to pay into the plan. Real health care reform controls the cost of health coverage -- Proposition 72 doesn't even attempt to control health care costs.
Myth: Proposition 72 will not hurt California's economy or jobs.
Fact: In its first year if is fully implemented, Proposition 72 will strap employers with a $5.3 billion dollar health tax. Businesses, already struggling with the skyrocketing workers' comp costs and other government mandates, will not be able to shoulder the burden of this ill-conceived government health care scheme and will be forced to cut hiring, layoff workers or move out of state. One economic study estimated that 500,000 jobs would be at risk if Proposition 72 takes effect. As California jobs are lost due to the costs of Proposition 72 health coverage for workers and their families will be lost as well.
Myth: California physicians are all in support of Proposition 72.
Fact: Both the Los Angeles County Medical Association and the San Diego County Medical Society voted to oppose SB 2 -- the law Proposition 72 will overturn -- during the legislative process. Their leaders are active in the campaign to defeat Proposition 72 because they know it does not control costs, does not help the majority of California's uninsured and, as a result of government involvement will result in a lower quality of health care for all Californians.
Myth: Proposition 72 will not aggravate the state's budget crisis.
Fact: If not defeated, Proposition 72 will greatly aggravate California's budget crisis. Proposition 72 authorizes a huge new government bureaucracy to borrow start-up and operating funds from the state General Fund, which is already experiencing a massive deficit. Proposition 72 does not limit how much can be borrowed from the state to fund new staffing and facilities for the bureaucracy, nor does it outline any parameters for the cost of administering the government plan, determining and collecting health care taxes from employers and employees, issuing credit to employers who already offer private health care, enforcing employer compliance, etc.
California cannot afford to have the General Fund raided to create a government-run health plan that contains no cost controls.
Myth: The opponents of Proposition 72 are all big businesses.
Fact: Opposition to Proposition 72 runs the gamut of California society -- school district officials, physicians, nonprofit organizations, local governments, and small businesses all oppose Proposition 72. Virtually every major newspaper editorial board in California has spoken out against SB 2 -- the bill Proposition 72 will overturn. The coalition working to defeat Proposition 72 has hundreds of individual and organizations as members.
| 
