OC Tax: Stop The Public Option

Steven Greenhut: The Orange County Taxpayers Association has written the following letter opposing efforts to create a public health-care option in California. OC Tax succinctly makes an important point.

September 23, 2010

Mr. Michael D. Stevens, Chair

CalOptima

1120 West La Veta Avenue

Orange CA 92868

Dear Mr. Stevens,

In March of this year, OCTax testified to your honorable Board regarding violations of the Brown Act (and other concerns) surrounding the possible activation of CalOptima’s latent 501(c)3 non-profit support organization.  In response, you and your colleagues resolved the issue by allowing the 501(c)3 application to lapse without being activated and established a new entity that we understand will be subject to the Brown Act.  We thank you for acting on our questions.

Now, we respectfully ask you to hear OCTax’s new concern.

OCTax has asked Governor Schwarzenegger to veto SB 900, AB 1602, and SB 56.  SB 900 and AB 1602 would allow public agencies (including CalOptima) to participate in the state Exchange.

SB 56 would allow CalOptima and other public agencies to enter into joint ventures to sell insurance on the private market.  In either case, Cal-Optima would be able to sell insurance to people who are not in financial need in competition with private health plans such as Cigna, Blue Cross and HealthNet.

In other words, by accident or by design, the legislative bills would impose on California the federal “public option” that was reviled by the public and rejected by Congress.

OCTax thinks the private sector provides competitive services more efficiently than does government;  we also know that private sector vendors have difficulty competing with public agencies because they lack the agencies’ sometimes bottomless access to taxpayers’ money, and they must recover their costs.

Regardless of the Governor’s action on the three legislative bills, OCTax urges CalOptima, a taxpayer-funded government agency, not to sell insurance on the private commercial market through the Exchange or through joint ventures.  Please do not lead CalOptima down this destructive path when your staff brings this item to you later this year.

Reed L. Royalty

President, OC Tax

SEPT. 27