POL POSITION:Prognosis isn’t good for ‘canary’ health care

California is often at the forefront when it comes to major public policy changes.

On the issue of universal health care coverage, however, Massachusetts was the first to jump in the pool.

Gov. Mitt Romney’s approval of the first such bill in the nation provides a convenient “canary” for us to observe in the health-care reform coal mine. At a time when the California Legislature and Gov. Schwarzenegger are actively pushing their own universal coverage schemes, we would do well to check in and see if that canary is still alive and breathing.

So far, the prognosis isn’t good.

Only 15 months after its passage, the Massachusetts health-care plan is facing serious financial difficulties. Simply stated, it is not doing as planned. The worst part of the bill required businesses with at least 11 employees to provide health coverage, or else pay an annual “fair share” tax of $295 per employee. This has turned out to be a huge burden on small businesses.

What’s interesting is the board that oversees the new Massachusetts health-care purchasing pool created a significant loophole through the regulatory process.

The loophole allows for a waiver from the initial individual mandate and reduces the monthly premiums on subsidized coverage, thus increasing the program’s budgeted costs to taxpayers by millions.

The board is also facing pressure to reduce individual out-of-pocket expenses, such as deductibles and co-payments, despite the fact that these are long-accepted strategies to reduce monthly health insurance premium costs.

The board is actually taking steps to qualify tens of thousands of additional low-income persons for free or subsidized coverage, jeopardizing the system’s original financing scheme.

Another grim omen for the Massachusetts plan is its inability to attract young and healthy people into the already-too-small risk pool, thereby severely reducing the chances of lowering per capita premium costs.

As of April 1, about 52,500 individuals had signed up for fully subsidized, free coverage.

Enrollments have lagged for the partially subsidized coverage, and most of those who have joined are older and less healthy than those signing up for the free coverage.

California’s leaders had better take notice of Massachusetts’ failure to live up to its pie-in-the-sky promises.

If they don’t, the taxpayers of California will be faced with hundreds of millions of dollars in new taxes.

represents District 35, which includes Newport Beach and Costa Mesa.