Several media outlets are carrying the news about Schwartzenegger’s universal health care plan for California. The highlights, as described in a Wall Street Journal sidebar (subscriber link) appear to be:
- Employers with more than 10 workers who don’t provide medical coverage pay 4% of payroll into a state fund
- 2% tax on doctors’ revenue
- 4% tax on hospitals’ revenue
- New doctors/hospitals taxes to be offset by greater revenue driven by increased utilization.
I think that on the surface, proposals in California, Massachusetts, and New Jersey to extend health coverage are fine ideas. However, I worry about potential unintended consequences down the road, assuming trends in health care inflation and utilization continue.
How will a government react to rising health care costs? Wouldn’t the state gain an interest in intervening in some very personal decisions? Is it possible that the government would be tempted to (for example) make it a criminal offense for people to engage in unhealthy behaviors or to skip their annual physicals? What about the potential that the state could exert its influence to block health care providers from offering newer (and presumably more effective) forms of treatment as opposed to preserving the (presumably less expensive) status quo?
Those questions shouldn’t necessarily block governments from seeking to extend health care coverage to more people. However, I think it’s very appropriate to start asking questions about what might arise down the road.