The Governor’s reforms guarantee that every Californian can buy health insurance.

Poor health won’t be a barrier to coverage. Governor Schwarzenegger's reforms guarantee that everyone will be able to obtain a health insurance policy in the individual market. Insurers will be required to guarantee coverage, with limits on how much they can charge based on age or health status, so that all individuals have access to affordable products. Under the Governor’s plan, medical history will no longer be a barrier to insurance.

Low-income Californians can get help. Low-income individuals and families who can’t afford coverage or who don’t receive it through their employers will be able to buy it through a special purchasing pool.

Californians need a guarantee now.

Insurance companies deny thousands coverage. Under the current system, thousands of Californians who have pre-existing health conditions such as diabetes, cancer or heart disease—or take anti-asthma, anti-depressant, or hundreds of other medications—are turned down when they try to purchase private health insurance, are granted only partial coverage, or only offered coverage at extremely high rates.

More than 6 million Californians went without insurance last year. According to the UCLA California Health Interview Survey, 6.5 million Californians were uninsured at some point during last year. This number represents 20 percent of children and non-elderly adults. Seventy-five percent of the uninsured were in working families, with the majority having no health coverage through their employers.

Guarantee Issue and the individual mandate go hand-in-hand.

If everyone’s required to have coverage, everyone needs access to it. The Governor’s individual mandate requires that all Californians obtain health insurance. But the individual mandate does not work unless everyone who’s required to have insurance can buy it. Guarantee issue ensures access to coverage.

Guarantee Issue won’t raise rates on the individual market.

Research shows no significant impact on premiums. A January 2007 study conducted by PricewaterhouseCoopers found that guarantee issue, when paired with the individual mandate, will give all Californians more choice in the marketplace and will not have a significant impact on premiums.

Why? The individual mandate adds millions of healthy Californians to the market. The number of new people who will come into the individual market under the Governor’s plan ranges from 2.3-4 million. The vast majority of these will be in better-than-average health, spreading insurers’ risk across a wide, healthy pool, with little impact on premiums as a result.

Guarantee Issue will help protect Californians against medical bankruptcy.

About half of all personal bankruptcies in the United States are due to medical bills. Several studies—including two published by Harvard Medical School and the Health Affairs journal—put the number of bankruptcies due to medical causes at approximately 50 percent. The typical person filing for bankruptcy due to medical costs is about 40 years old, with some college education, middle-class or working-class, and a homeowner.

Guarantee Issue reduces the hidden tax.

Insured Californians Won’t Carry the Burden Any Longer. Guarantee issue, paired with the individual mandate and Medi-Cal rate increases, will reduce the hidden tax. The New America Foundation estimates the hidden tax $455/individual premium and $1,186/family annually. The hidden tax is equal to about 17 percent of all health care expenditures, and costs employers approximately $14 billion each year.

Just the Facts

Californians are denied coverage based solely on their jobs and the medicines they take. “Health insurers in California refuse to sell individual coverage to people simply because of their occupations or use of certain medicines, according to documents obtained by The Times. Entire categories of workers—including roofers, pro athletes, dockworkers, migrant workers and firefighters—are turned down for insurance even if they are in good health and can afford coverage.” Source: Lisa Girion, “Health Insurers Deny Policies In Some Jobs,” Los Angeles Times, 1/08/07

PPIC Poll Shows Voters Overwhelmingly Support Individual Mandate: "76% of adults and 69% of likely voters agree that it is a good idea to require all Californians to have health insurance, with programs available to low-income people," Source: Public Policy Institute Of California, Statewide Survey, "Californians And Their Government," http://www.ppic.org/content/pubs/survey/S_307MBS.pdf March 2007

CEO Of California Association Of Health Plans: Guarantee Issue and Individual Mandate Must Be Linked. "'Guaranteed issue in a broad conceptual way is a logical public policy,' says Christopher C. Ohman. 'Health plans are concerned, though, that if you only go part way on the individual mandate and you don't, in fact, include all groups of the uninsured or if you have enforcement mechanisms that really don't keep the people in the pool when they're healthy...then the net effect can be an increase in the costs for the 1.7 million Californians who are currently in the individual market.'" Source: Julie Miller, California Canvas Managed Health care Executive 2007

• The average out-of-pocket medical debt for those who filed for bankruptcy was $12,000.
• 68 percent of those who filed for bankruptcy had health insurance. However, illness often leads to job loss and with it, the loss of health insurance.
• 50 percent of all bankruptcy filings were partly the result of medical expenses.
• Every 30 seconds in the United States someone files for bankruptcy in the aftermath of a serious health problem.
• Families with children were especially hard hit—about 700,000 children lived in families that declared bankruptcy in the aftermath of serious medical problems.
• The total number of people directly affected by medical bankruptcies is more than two million annually.

Source: Harvard Medical School, Press Release, "Illness and Medical Bills Cause Half of All Bankruptcies," 02/02/05

Medical Debt "Surprisingly Common." "Medical debt is surprisingly common, affecting about twenty-nine million non-elderly adult Americans, with and without health insurance. The presence of medical debt, even for the insured, appears to create health care access barriers akin to those faced by the uninsured. Policymakers, researchers, and medical providers should consider medical debt a risk factor for reduced health access and poorer health status. Simply reducing the number of uninsured Americans would be a hollow policy victory if the problems arising from medical debt persist." Source: Robert W. Seifert and Mark Rukavina, "Bankruptcy Is The Tip Of A Medical-Debt Iceberg," Abstract, Health Affairs Journal, 25, No. 2 (April/May 2006)

21 percent of working Americans have medical debt to pay off. One-fifth (21 percent) of working people, both insured and uninsured, currently have medical debt they are paying off over time. More than two of five (44 percent) of these individuals are carrying $2,000 or more in debt. Source: Commonwealth Fund, "Why Not the Best? Results from a National Scorecard on U.S. Health System Performance," Report, September, 2006

Medical debt pushes average credit card debt 50 percent higher. The average credit card debt among indebted low- and middle-income households in the U.S. is nearly 50 percent higher when the household carries medical debt. Source: Cindy Zeldin and Mark Rukavina, "Borrowing to Stay Healthy: How Credit Card Debt Is Related to Medical Expenses," Demos, 2007