Facts: Our Health Care System Is Broken -- But We Can Fix It

Working hard is no guarantee that you'll have access to health care.

-- Our current system leaves out 1 in 5 Californians; 6.5 million Californians are uninsured.

-- 83% of the uninsured belong to working families.

-- Not having insurance can be catastrophic to families, resulting in death, disability, and financial ruin. One half of all bankruptcies are related to medical bills, and the uninsured have a 25% higher mortality rate, according to the Institute of Medicine.

You're insured – but are you sure? Health care insecurity affects all Californians.

-- In a changing economy, anyone can lose their coverage. Between the ages of 18 and 36 alone the average person holds 9.6 jobs. COBRA and individual insurance are too expensive for most.

-- The emergency care we all rely on is so stressed by the burden of treating the uninsured that emergency rooms are running in the red. California emergency rooms lost $540 million in 2003, and in the last decade, 15% of California's emergency rooms have closed their doors.

-- Even among those who have insurance, 38% report trouble accessing care.

-- Current retirement health benefits -- and retirees' financial planning -- are at risk. Nearly half of all companies have "caps" limiting their future coverage, and every year, fewer future retirees are likely to have access to such benefits. 10% of large firms cancelled such benefits last year.

Runaway costs can only be shifted, not stopped, without fundamental change.

-- From 2001 through 2004, premiums increased at double-digit rates. 2003's 13.9% increase was the largest increase since the benchmark measure was established in 1987.

-- Over the last 10 years, the average employee premium contribution has increased 75%.

-- 59% of insured Americans worry about being able to continue to afford health insurance.

SB 840 is fundamental reform – for a healthier California and a wiser use of resources.

The California Health Insurance Reliability Act offers a broad and clear vision for a remodeled health care system that will provide high quality, affordable and reliable health care for all residents.

SB 840 (KUEHL)

The California Health Insurance Reliability Act

 Affordable Health Insurance for All Californians

February 23^rd 2005

SB 840 (Kuehl), the California Health Insurance Reliability Act, (CHIRA), would provide fiscally sound, affordable health insurance coverage to all Californians, provide every Californian the right to choose his or her own physician and control health cost inflation.

Reliable Coverage: Eligibility is based on residency, instead of on employment or income. Under CHIRA, all residents are covered. No California resident will ever again lose his or her health insurance because of unaffordable insurance premiums, or because he or she changes or loses a job, or goes to or graduates from college or has a pre-existing medical condition.

Affordable: The plan involves NO NEW SPENDING on health care.  The system will be paid for by federal, state and county monies already being spent on health care and by affordable insurance premiums that replace all premiums, deductibles, out-of-pocket payments and co-pays now paid by employers and consumers.

Efficient: CHIRA eliminates waste by consolidating the functions of many insurance companies into one comprehensive insurance plan, saving the state and consumers billions of dollars each year.  Currently it’s estimated that half of every dollar spent on health care is squandered on clinical and administrative waste, insurance company profits, and overpriced pharmaceuticals.  CHIRA is based on a model that has been estimated to save California about $20 billion through reduced administrative costs in the first year alone.

Under CHIRA, California will use its huge purchasing power to buy prescription drugs and durable medical equipment in bulk.  CHIRA is the sole health reform that enables California to use its full purchasing power to negotiate the deepest savings.  It has been estimated that this model of systemwide bulk purchasing could save California $5.2 billion in the first year.

Most importantly, CHIRA will make our health care system more reliable and secure by stabilizing the growth in health spending; linking spending increases to state GDP and population growth, employment rates and other relevant demographic indicators.  CHIRA will combine needed cost controls with medical standards that use the best available medical science, and place an emphasis on preventative and primary care to improve California’s overall health in a way that also saves billions of dollars.

High Quality: Under CHIRA, consumers have total freedom to choose their personal primary care provider.  Health care providers and facilities will receive fair reimbursement for all covered services they provide.

CHIRA utilizes proven financial incentives that support the delivery of high quality care, including bonuses for providers working in rural or under-served areas.  The plan invests in needed health care infrastructure such as electronic claims and reimbursement systems and statewide medical databases that improve health care quality.

Benefits: Coverage includes all care prescribed by a patient's health care provider that meets accepted standards of care and practice.

Specifically, coverage includes hospital, medical, surgical, and mental health; dental and vision care; prescription drugs and medical equipment, such as hearing aids; emergency care including ambulance; skilled nursing care after hospitalization; substance abuse recovery programs; health education and translation services, including services for those with hearing and vision impairments; transportation needed to access covered services, diagnostic testing; and hospice care.