With the dust clearing on the “fine works” of the Democrat-controlled state legislature, it’s becoming very clear that some very noxious pieces of legislation are now sitting on Governor Arnold Schwarzenegger’s desk, awaiting his perusal.  While the FlashReport annual Top Twenty Bills To Veto feature is due out later this week, there is one particular set of terrible bills that are worth their own separate mention right now.  Given that our state’s economy is in bad shape, these bills represent job killing legislation at its worst.

We are calling on the Governor to swiftly use his veto pen on Senate Bill 900 and Assembly Bill 1602.  These two companion pieces of legislation together represent an effort to see California embrace Obamacare years early, and (of course) seeks to put into place regulations well beyond those required by the unpopular federal legislation.  One bill creates a “California Health Benefits Exchange” and the other dictates how it will be operated.  Under federal mandates, it is estimated that between 4 and 9 million Californians would be forced to buy their healthcare through this exchange.  Between both bills, only one of them garnered a single GOP vote.  Hardly bi-partisan cooperation at work here.

While the federal government’s foray into health care is too complicated to easily summarize due to its massive size and scope (to the delight of progressives), suffice it to say that the Patient Protection and Affordable Care Act (a.k.a. “Obamacare”) requires each state, by January 1, 2014, to establish state-level health benefit exchanges making qualified health plans available to qualified individuals and qualified employees.

The first question that anyone has to ask is – given that states are not required to jump through this onerous hoop for nearly three years, what is the rush to do so now?   I, for one, can think of a couple of great reasons why this legislation should be vetoed simply because it seeks to comply with a costly mandate too early.

First and foremost, there is active litigation taking place by nearly two dozen states, seeking to block the implementation of Obamacare (for among other reasons, placing these kinds of unconstitutional mandates on state governments).  Second of all, there is a very key Presidential election and two rounds of federal elections that will take place in the interim.  Let’s not forget that a recent CNN/Opinion Research survey showed that a startling 56% of Americans oppose Obamacare – and that is with most of them not really understanding the terrible policies contained in the law.

The reality is that the approach of Obamacare represents a cliff that we are all nearing, over which we may be forced to jump.  That’s bad enough.  But these bills, this year, actually represent and effort run up the cliff at full speed and leap off into the abyss.  A terrible idea!

Of primary concern to everyone should be the massive amount of power that is being placed into governing “junta” of this proposed exchange.  Run by an all-powerful five member Board – this legislation literally exempts the Board from state public meeting laws, civil service salary rules (like CalPERS), and from the regulatory review process.  The bill actually exempts the board from fiduciary responsibility or liability for its actions.  Concerned yet?  Even the Directors at CalPERS and at the State Compensation Insurance Fund Board are required to be fiduciaries…

What can this all-powerful Board do with its power?  With the broad responsibility of managing between $20 billion to as much as $45 billion in premium dollars, this board gets to levy tax hikes on health insurers who participate in the program (when government mandates that they be paid, we call those taxes).   These taxes would be paid by insurers (who then invariably pass them along to their insured – us!) – and would go to cover the government’s, “costs of administering the program.”

Hmmm, exactly how much will it cost this new state government bureaucracy to enroll and administer the health care for a baseline of at least 4 million people?  If you use Healthy Families and Medi-Cal as indicators, this could be well over a billion dollars.  This estimate would not include overhead, administration, IT, marketing costs, which the “junta” at the top of the Exchange can charge to the insurers.  This power to levy taxes is just one of dozens of powers and responsibilities given to this Exchange Board, and should give all Californians cause to be concerned.

Look, my family is in the individual health care market, and so I have a very vested interest in wanting to see reforms that will increase the quality of plans available for me to choose, and at the lowest possible price.  There is no doubt in my mind that this legislation takes the absolute opposite course, pushing more government controls into healthcare, sooner than required. 

I am hoping that Obamacare is held to be unconstitutional, or that the political will of America in 2012 is to bring a new administration that would repeal some or all of it.  But in the meantime, Governor Schwarzenegger should veto these two bills that represent this “first in the nation” rush towards socialized healthcare in the Golden State.  The Governor’s legacy as he retires should be that he rejected those bills sent to him that would do harm to the economy at a time when we need to be doing the opposite.

In what I consider to be a worst-case scenario – which would be that we get to 2013 and the full implementation of Obamacare is handing above Californians like Damocles Sword, then I would expect the legislature and Governor at that time to come together with a truly bi-partisan plan to implement the plan complete with all of its federal mandates.  But until we get to that point, a big-government overreach as we see in SB 900 and AB 1602, simply put, is too much, too soon.

This entry was posted on Tuesday, September 7th, 2010 at 12:00 am and is filed under Blog Posts.