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Following the death-by-veto of state Sen. Sheila Kuehl’s universal healthcare bill last week, the lead sentence of a story in Tuesday’s New York Times seemed almost pathetic: “A federal advisory panel said Monday that Congress should take immediate steps to guarantee that all Americans have access to affordable healthcare by 2012.”

The piece reported on the findings of the Citizens’ Healthcare Working Group, which was created in 2003. “It should be public policy, written in law,” the bipartisan panel decreed, “that all Americans have affordable access to healthcare.”

Maybe this report will give some hope to the 45 million uninsured Americans, or to the lucky families who spend, on average, close to $1,000 per month on health insurance. Probably not.

The healthcare crisis has become so acute it is inflicting grave damage to the economy.

National health insurance is an idea that has been stalled for a long time. First proposed by Pres. Harry Truman in 1945, the idea has come and gone from the political agenda, surfacing most recently with the spectacular crash-and-burn of the Clinton administration’s effort in 1993. If the Working Group is able to succeed, it will have to overcome even bigger problems than those that stymied past leaders.

The battlefield has moved to the states. Kuehl’s bill was the latest in a series of moves by state lawmakers to tackle an issue that the federal government does not seem to be able to cope with. Massachusetts this year passed a law both requiring all residents to purchase health insurance and offering inexpensive, state-subsidized policies. Hawaii and Maine have instituted programs that offer near-universal health insurance. Similar plans have been proposed, and have failed, in 26 other states. Meanwhile, the ranks of the uninsured have ballooned—there are 1.3 million more uninsured this year than last.

Most Americans rely on employer-provided plans. In the past five years, the number of firms offering benefits has dipped from 69 percent to 61 percent.

The healthcare crisis has become so acute it is inflicting grave damage to the economy. Big and small companies now devote substantial resources to providing heathcare. In addition to causing real pain in millions of American households, this situation puts US industries at a competitive disadvantage in the global economy.

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When he signed California’s global warming initiative less than two weeks ago, Arnold Schwarzenegger took on an important issue that the federal government has failed to confront. In vetoing Kuehl’s bill, he passed up an opportunity to do that again.

In delivering his veto, Schwarzenegger criticized Kuehl’s bill (which, unlike the Massachusetts plan, would have set up a state-run system) for “creating a vast new bureaucracy.”

“I cannot support a government-run healthcare system,” Schwarzenegger said. “Such a program would cost the state billions and lead to significant new taxes on individuals and businesses.”

Kuehl responded that her bill would have cost no new money, and condemned the governor for choosing to “leave healthcare in the hands of private insurance companies and let working families lose coverage one family at a time, let them go bankrupt even when they have insurance, and let hospitals close one at a time.”

Laura Zehm, vice president and chief financial officer for the Community Hospital of the Monterey Peninsula (CHOMP), does not lament the demise of Kuehl’s bill. (The hospital took no position on the legislation; Zehm speaks only for herself on this matter.) Zehm is not a fan of government-run insurance programs.

Because many of its patients are over 65 years of age, and therefore eligible for Medicare, CHOMP relies on that government program for much of its income. And that costs the hospital money.

“If Medicare and Medical paid only what it costs to provide care, we could lower our fees to other patients by 40 percent,” she says. “But they pay only half of those costs. This year we will spend $226 million for Medicare patients, and be reimbursed $114 million.”

There is an unfairness at work here, in Zehm’s estimation. Many of these patients are quite well off, but Medicare does not discriminate—it is available to all Americans. She admits to a belief that “means testing,” which would require wealthy patients to pay for their care, would be more fair, but that is not the solution she favors. Instead, she is hoping that healthcare providers, employers, insurance companies and the government can come up with a solution to this crisis.

The governor says he hopes next year to work with lawmakers, including Kuehl, to do just that. His opponent, Democrat Phil Angelides (whose support for Kuehl’s bill was lukewarm at best) promises to do the same.

Meanwhile, the federal government will continue its slow move toward a national solution. If we are to hope, we are better off hoping that California’s leaders will come up with something. 

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