By establishing a streamlined reimbursement process that would take the place of current public and private insurance plans, SB 840 would enable California to save billions of dollars in administrative costs, thus making it possible to offer every resident the comprehensive benefits plan laid out in the bill.

In place of all current premiums, deductibles, co-pays and other out of pocket expenses, consumers would pay a yearly means-based premium for all coverage, which would include medical, dental, vision, prescription drug, hospitalization and emergency coverage, along with other services.  SB 840 is the only bill being discussed in the legislature that enables the State of California to utilize its full purchasing power to negotiate bulk discounts for prescription drugs and durable medical equipment like all other industrial countries.  Medical care, retail pharmacy sales and other health care delivery services would remain private and subject to competition.

SB 840 is designed to put no new burden on California’s general fund.  It is based on a model developed from an analysis of California health plans by the Lewin Group, an independent healthcare cost/benefit analysis firm.  The Lewin model, detailed in a report released in January of this year, details ways by which SB 840 can reduce overall healthcare costs in California while insuring every resident at a high level of coverage.

“One of every five Californians is now uninsured” says Senator Kuehl, “and the majority of the uninsured are working people.  All of us pay the price for this crisis.  The emergency rooms we count on for help are overburdened with patients who have nowhere else to go for care. Hospitals and doctors bear the cost of this over-reliance on expensive emergency room care by people who can’t pay for it, along with the cost and distraction of the mountains of paperwork it takes to get reimbursed for caring for those patients who do have insurance.  Insurance premiums are rising, while coverage is shrinking.”

“Half of the personal bankruptcies in this country are the result of medical expenses, and the majority of the people bankrupted for that reason had insurance at the time they became sick or injured,” continued Senator Kuehl.  “Each of us is vulnerable.  One bad traffic accident can wipe out a lifetime of careful financial decisions” 

“Cosmetic surgery won’t fix this problem.  It’s time we stopped finding out how much worse it can get.  I’m very grateful that my colleagues on the Assembly Heath Committee agreed that it’s time for a cure.”