New healthcare proposal uses lagging revenue source to pay for expanding and costly system
Nov. 6, 2007 In response to today’s announcement of a new healthcare proposal by the legislature, the California Manufacturers & Technology Association announced its opposition to the funding mechanisms. "It makes no sense to use a declining revenue source to fund a program who’s costs are likely to increase by double-digit percentages in future years, said Jack Stewart, CMTA president in referring to the proposed $2 per pack tobacco tax increase. "The tobacco tax is a particularly unstable revenue source due to it's vulnerability to untaxed internet and out of state purchases."
Voters rejected the use of tobacco taxes as a means of funding health care programs last year when proposition 86 was defeated in the November, 2006 election. “If we’re serious about mandating healthcare for all Californians, then its time to get serious about dedicating a stable revenue source to fund the mandate," continued Stewart.
CMTA also opposes the creation of a government run drug purchasing program, where bureaucrats will decide which medicines patients will get. "This, in effect, creates a single payer system for medicines which could be destructive to the private market, could cripple California's biotechnology industry, would create a statewide drug formulary and provide patients no coverage for doctor prescribed medicines that are not on the list," said Stewart.
At the root of this proposal is a 6 percent employer tax to fund a large portion of the program. "This works against the ultimate goal of healthcare reform -- to empower all California employees and employers to obtain necessary services at a reasonable price. The State's healthcare system is too expensive to rely upon payroll taxes that can't keep up with compounding system costs and there isn't any economic data indicating that the current proposals will significantly reduce those system costs. Further, this universal healthcare package will remove massive amounts of flexibility that employers now have to control their own costs and deliver premium health insurance to their employees," concluded Stewart.