California's Crazy

California is a state that is considering the possibility of declaring a budgetary emergency because of a growing deficit crisis. It is also a state that is actively looking to exacerbate the problem:

SACRAMENTO — California moved significantly closer to enacting a broad expansion of health insurance coverage on Monday when the Democratic-controlled Assembly passed legislation that has the backing of the Republican governor, Arnold Schwarzenegger.

While the plan wouldn't begin until 2010, it will cost an estimated $14 billion, and if history is any indicator, it will probably cost a lot more than that. Sooner or later, that throbbing money sponge in Sacramento is going to be slapped with the reality that, even in California, money doesn't grow on trees.

My favorite part of the plan is that it assesses a levy on-get this-hospital revenues. It'll make the very health care it is providing more expensive to pay for.

I'm also quite fond of this:

Mr. Schwarzenegger has countered by saying there should be no linkage between the revenue measures needed to balance the budget and those needed to pay for the health insurance plan. He also argues that the health plan is intended to bring down costs by encouraging healthy habits, better management of chronic diseases, and electronic record-keeping. That, he says, should ultimately reduce the state’s health care expenses and help California fix its structural budget problems.

Yep. No linkage. No linkage between a huge budget deficit and adding a ton of new spending that will very likely exceed estimates. And 'free' health care doesn't bring down health care costs. Think about it-if your employer paid every dime of your health care, you'd probably go to the doctor for every nick, scratch, and cold, wouldn't you? Ya know, just to be safe and prevent bigger problems, right? And would you ever once question the price? Probably not.

Here's what will happen if California goes along with this plan. First, there will be a health care crisis. There will be more demand for health care than supply. We'll hear about how packed the doctor's offices and the emergency rooms are, and most of it will be with health issues that do not require attention, all in the name of preventative care. Health care providers will be justified in increasing their prices, and then they'll tack on a little extra, because hell, nobody is pressuring them about prices, anyway. Plus the hospitals will tack on some more to recoup the levy placed on them by the state. Then we'll here about how much more expensive the plan was than anyone thought, and more onerous taxes and fees will be set in place, plus likely restrictions on the prices providers can charge if they want to be paid by the state. That in turn will send the best doctors who can earn the best money with their work out of state because it won't be worth it to practice in California anymore. Then we'll hear about how poor the health care is in California, how much malpractice there is, and how doctors are unable to afford their malpractice insurance. And the downward spiral in health care will continue in the state.

Great plan, Guvernator. May other states learn from your mistakes.