While Governor Schwarzenegger's health reform plan crashed and burned this week on the legislative highway, it confirmed once again that using mandates to achieve universal coverage is a failed model for reform.
The take home lesson: America's health insurance industry is the problem. Any reform based on the private health industry will fail. Experience has proven that private insurers can neither control costs nor assure universal coverage; they are simply too bureaucratic and expensive. The administrative overhead in the current private-based system is 31%. Single-payer systems have overheads that are only about half that.
As the members of the California Senate also learned, expanding coverage to the uninsured without also controlling costs is a non-starter.. This means health reformers must take on the politically daunting task of ousting the insurance industry profiteers.
Read More