Governor Arnold Schwarzenegger is introducing a new plan to cover nearly all of California's uninsured. The Clinton administration tried something similar but the proposal died in Congress before it ever got off the ground. Does the former body-builder have the political muscle to get his idea past his political opponents? On CNBC’s “Morning Call” we took a closer look at his plan and why it could land before a judge.
At the heart of today’s conversation was one central point: the Schwarzenegger plan says if you’re not covered by insurance through work – you will be mandated to get your own health insurance.
Tom Miller, Resident Fellow with the American Enterprise Institute predicts the plan will encounter many roadblocks. (The biggest will be mandating employers with as few as 10 employees to either provide health insurance or face increased taxes.) Miller explained, “There are legal challenges under ERISA," he said. “That will probably be attempted by employer groups and could succeed in the courts.”
Miller went on to say what he believes is at the heart of the whole debate. “Practically speaking you can’t get universal coverage without mandating (it) on individuals..(But) There’s a mismatch between people wanting very grand coverage which is quite expensive. (We have) a system that delivers more expensive coverage than most people can afford."
Jean Ross, Executive Director of the California Budget Project objects to the proposal. “Individuals at low income levels will be asked to buy a health insurance policy…. We’re concerned that working Californians could be asked to pay as much as $7,500 a year (in other words, more than they could afford).
Miller may have had the best closing remark, “This is a heavy lift for Governor Schwarzenegger – his muscles aren’t as good as they used to be.”