Healthcare in America is in crisis. Costs are rising, fewer and fewer employers are providing coverage and insurance companies have become a coverage-denial racket rather than a healthcare solution. Presumably, if you wanted to write a healthcare bill, you would start by trying to control healthcare costs, providing coverage to more people, increasing eligibility and reducing denials.

That starting point seems obvious to me, but based on the current healthcare bill under consideration in the California legislature’s special session, Gov. Arnold Schwarzenegger is coming at the problem from a different angle.

The bill starts with a mandate to purchase healthcare. We don’t want people “opting out” of health insurance, so a mandate may be part of a good universal coverage plan. But the flip side to Schwarzenegger’s bill is that it often does not help people purchase coverage. For many, it is all stick and no carrot — the bill authorizes the tax board to garnish wages or put liens on homes to pay for insurance. There are waivers for economic hardship, but as Sheila Kuehl, the smartest person in the state legislature, points out, “if you are excused from the mandatory purchase of insurance, you simply have no insurance!” This is central, not peripheral, to the issue.

The bill requires employers to “pay or play,” to provide insurance themselves or put between one and seven percent of their payroll into a state fund to provide insurance for their employees. Many businesses currently pay 10 percent or more of their payroll to cover health insurance. If the state told me I could pay 10 percent myself or that I could pay six and a half percent and they would pick up the rest, it would not be a hard decision for me to make.

The remainder of the costs would be paid for by cigarette taxes, hospital taxes, federal money and the state budget. This funding is not in the bill, but would be part of a separate ballot initiative that has not yet been written. If the ballot initiative did not pass, the whole thing would probably be off, although it is not entirely certain whether the individual insurance mandate would then actually be dropped.

The real problem with this approach is that Schwarzenegger came to the table with “we can’t tax the employers or regulate the insurance companies,” and Assembly Speaker Fabian Nunez came in with “everyone must be covered,” — and they both pretty much said “great” and walked away. The resulting bill requires everyone to get coverage, but it will mean that employers chip in less to help with the cost. The compromise demands coverage rather than providing it.

Because they fudged where the money comes from, they also had to fudge how much coverage this money was going to buy. Standards and prices for state-pool-funded healthcare are not specified in the law and will be set at some future date by the Managed Risk Medical Insurance Board; there are no standards for employer-provided healthcare. There are assurances that subsidies will be provided for the poor, but no details on what those will be. Premiums may be subsidized, for example, but it is likely that co-pays, deductibles and out-of-pocket expenses will be unlimited.

Any savings we get out of the health insurance system are going to have to come from fundamental overhaul, such as a Medicare-for-all type proposal that would provide universal coverage of the quality of Medicare or the Veterans’ Administration, at a super-low overhead. If people wanted more coverage they could purchase it privately, but a minimum would be available to those who did not.

In other words, “Medicare-for-all” would control costs, provide coverage to more people, and end care denials, unlike the Schwarzenegger-Nunez bill. Funny that when the Medicare-for-all bill, Kuehl’s SB 840, reached his desk over a year ago, Schwarzenegger vetoed it.