Single-Payer/Multiple Challenges

Although it is difficult to dispute any of the arguments against SB 562, the one thing that all of these arguments fail to take into account, are unanticipated nonlinear problems such as;

Inbound Migration – What will define a “resident”! If it is merely occupying the space you stand on, with no requirement for establishing residency, or for that matter even citizenship, this will be a siren song for anyone seeking relief for the cost of their own healthcare burden. There will likely be a massive redistribution of risk and resulting claims disproportionately loaded onto California’s books.

Plan Design – As anyone, who has witnessed overly generous plan designs and the resulting deluge of claims activity (generous prescription drugs as one example). Unless plans are designed with politically unpopular copayments, coinsurance or deductibles, the resulting claims experience will bankrupt any financing mechanism, regardless of how well-thought-out and frontloaded with fresh taxes.

Lack of Professional Agent Support – It is unlikely that there will be a motivation for any professional insurance consultants to remain available to help either individuals or employers (there will still be supplemental insurance at the employer level) rest assured there will be plenty of confusion and the need for the professional agent guidance, unfortunately, most of the good ones will have moved on to more fertile grounds.

California-Based Multistate Employer Groups – What happens in cases where a group health plan is sitused in California, but has the majority of the employees spread throughout the United States? It is unlikely that he California employees will have the same access to, or level of coverage, that other employees within the same company will enjoy. This raises all sorts of questions like plan eligibility, government (CA Department of Insurance) regulation, and even possibly discrimination.

Outbound Employer Migration – This law can be viewed as nothing less than a poison pill for large and medium-sized employers in the state of California. Since these are the very source of financial resources needed to support a single-payer system, it would be disastrous for any percentage of these companies to move their headquarters to another more friendly state.

These are just a few, I’m quite certain that there are any number of other unanticipated consequences of this unfortunate piece of legislation (SB 562) even if there are more reasons to be against this change, these would be sufficient for me.

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