Prop 186: Health Services. Taxes.

The way it is now:

People who live in California get health care many different ways:

- most under 65 get health insurance from an employer
- most over 65 are covered by the federal Medicare program
- some purchase their own health insurance
- many low-income people get health care from Medi-Cal or other public
'safety net' programs

26 million people who live in California have health coverage and 6
million do not. 4.8 of these 6 million are in households where someone
is working but their employers do not provide health insurance. The
President and Congress are working on different types of health care
reform, but no new national plan is settled yet.

What Prop 186 would do:

* Create a state-run 'single payer' health system for all California
residents beginning in 1996. It makes the state the 'single payer' to
all health providers. It replaces private insurance and public health
programs.

* Health benefits for all state residents include doctor's office visits,
hospital care, prescription drugs, eye care, some dental and mental
health services. Long term care would be allowed for people who had
worked two years in the state. You choose which doctor in the system to
go to.

* New taxes would help pay for the new health plan:
- a payroll tax for businesses (from 4.4% to 8.9% per employee, tied to
the size of the business)
- an income tax of 2.5%
- a $1.00 per pack tax on cigarettes

An elected Health Commissioner would run the system and work on
controlling health care costs.

What it will cost:

* The new taxes would total about $40 or $50 billion per year, mostly
from the payroll tax. If federal funds for Medicare and Medi-Cal
are included, the new state system would have about $75 billion to spend
each year.

* The cost to run the single payer system is unclear. The Health
Commissioner can charge co-payments up to $5 and propose tax increases to
help cover costs.

* It is also unclear how Prop 186 would affect the state economy. This
plan will increase costs for many small companies because of the new
payroll tax. Many large companies may save money because the payroll tax
for them is less than what they pay now for health insurance.

Pros:

"Prop 186 provides health security for everyone in California. No matter
what happens, you still have health care and can choose your doctor."

"Insurance companies spend up to 30% of each health care dollar on
overhead. Prop 186 stops this waste and puts more dollars into services."

"Many companies will save money with 186, which is good for the economy.
People won't be stuck in the wrong job just to keep their health care."

Cons:

"Prop 186 is an untested plan with unknown costs. Why do we think
government will be more efficient at running things?"

"This plan will cost more money than we have. A tight state health care
budget will mean limited service and long waits."

"Small businesses cannot afford this payroll tax and would have to cut
back on staff. If they stop growing, it will hurt our economy."

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