California Health Insurance Proposal ‘Encouraging,’ Has ‘Flaws,’ Columnist Writes

A proposal announced this week by California Gov. Arnold Schwarzenegger (R) that would require all state residents to obtain health insurance is "very encouraging" and supports the "principle that all Americans are entitled to essential health care," but the plan has "serious flaws," columnist Paul Krugman writes in a New York Times opinion piece. The proposal "forces everyone to buy health insurance, whether they think they need it or not; it provides financial aid to low-income families, to help them bear the cost; and it imposes 'community rating' on insurance companies, basically requiring them to sell insurance to everyone at the same price," Krugman writes. "As a result, the plan requires a much more intrusive government role than a single-payer system," he writes, adding, "Instead of reducing paperwork, the plan adds three new bureaucracies: one to police individuals to make sure they buy insurance, one to determine if they're poor enough to receive aid and one to police insurers to make sure they don't discriminate against the unwell." Krugman concludes, "I suspect that the real question is what to do after the plan founders from its own complexity. And the answer is, damn the insurers -- full speed ahead" (Krugman, New York Times, 1/12).