Insurance Group study says single-payer proposal flawed.

Worried that Senator Sheila Kuehl's legislation that proposes a single-payer health care system in California may build momentum, the California Association of Health Underwriters commissioned its own study, which refutes Kuehl's claims that a single-payer system is the solution for California.

SB 840. Kuehl's bill in the state legislature. proposes to combine the state's existing public health care programs and have residents that pay for private insurance replace their premiums and co-payments with a yearly payment into the state system. Kuehl argues that the system would save billions in annual medical expenses.

David Benson, President of DCB Insurance Marketing & Financial Services and President-Elect of CAHU. said that although the group does not expect the bill to be signed into law this year, it's concerned that the public might start supporting a reform it does not understand.

"Sheila Kuehl has a grassroots effort with over a million people on her e-mail list, and if every story that comes out is very positive about SB 840, eventually it's going to be an initiative on the ballot," said Benson. "I don't think people are ready for it if they understand all of it."

The group enlisted John E. Schneider of the Health Economics Consulting Group, which includes faculty from the University of Iowa, Texas A&M University, University of California--Berkeley and others, to analyze SB 840.

Schneider said that in studying SB 840, he and his team unearthed a number of contradictions to a report commissioned by Kuehl and authored by the Lewin Group, a Virginia-based consulting company.

Schneider's study, for instance, claims that in estimating health care administration costs to be about $9.7 billion by the end of 2006. Kuehl is overestimating by more than $3 billion. CAHU further claims that the $5 billion to $6 billion in administrative costs spent by private health care companies is actually declining every year, and that administrative costs are the first line of defense against fraud and abuse.

In addition to the study, CAHU also commissioned a public opinion poll, which reported that over 76 percent of respondents are satisfied with health care that they've received in recent years and with their own health plan, that 44 percent are dissatisfied with the current state health care system and 59 percent do not think a single payer system will provide better health care.

Single payer health care systems in other states have resulted in the rationing of care, said Bruce Benton. CAHU's vice president of public affairs.

"There's a significant consumer disconnect in terms of their perception of how this health care system works," said Benton. "When you don't fully educate someone, and people make non-educated decisions, it actually can impact them to their detriment."

CAHU represents over 2,500 insurance professionals in California. Should Kuehl's bill become law. that membership would lose business.

By JONATHAN D. COLBURN

Staff Reporter