California Dreamin?: Consumer Security Blanket or Insurance Company Pocket Liner?

If you’re reading this post, you probably already know the nuts and bolts of the healthcare expansion plan passed in California earlier this week.  The $14 billion proposal seeks to require insurance coverage for a majority of the state’s 6.6 million uninsured residents.  The Senate will not consider the plan until next year and, if passed, its funding mechanisms would be subject to a ballot initiative in November 2008.

While the legislation has been widely covered in the news this week, many mainstream media outlets have largely omitted a discussion of the bill’s corporate cheerleaders: major insurance companies in the state of California who eagerly await millions of new paying consumers compelled to purchase their products.

Supporters of the measure included Kaiser Permanente, Health Net, PacifiCare, Blue Shield, Cigna, and Molina Health Care, each of which stands to benefit economically from mandated coverage.

Although the plan would proscribe insurers from denying coverage to consumers because of pre-existing medical conditions, it does nothing to limit increases in premiums, deductibles, or co-pays.  In addition, the new legislation places no checks on insurance companies’ ability to deny coverage for procedures defined (by the industry itself) as “experimental” or “medically unnecessary,” nor would it curb restrictions on access to specialist care.

In short, while the measure may statistically blanket more California residents with health insurance—regardless of unabated cost increases—it does little, if anything, to address the likelihood that newly insured Californians will continue to incur medical debt.  It is inevitable that a portion of that outstanding credit will become delinquent, afflicting household budgets and straining healthcare providers’ ability to avail the public of quality care.

The California measure has been touted by its supporters as being cut from a different cloth.  The question remains: will that cloth be fashioned into a protective blanket for California consumers and providers, or will it be cut into pieces to line the pockets of the state’s insurance giants?