The news out of the State Capitol in Sacramento is pretty surreal. We’re within two votes of allowing the State Government takeover of the current healthcare system. The obvious argument against SB 810 is the cost. The financing detail is in the State Senate’s own evaluation that SB 810 would cost the state $210 billion in the first year and would grow to $250 billion by 2015-16. The state’s entire general fund budget this year is only $86 billion. So the math is, $210B – $86B = $124B. That’s a big number.

This new Government plan would outlaw private health insurance plans: “This bill would prohibit the existence of a health care service plan contract or health insurance policy, except for the California Healthcare System (SB 810), that would be sold in the state that provided for the same services as the system.” You would not be allowed, by law, to upgrade to “first Class”. People who have spent their whole life in the Kaiser system would also see their plan go “bye, bye”. Your coverage will now become a function of revenue in the state budget and the political whims of lawmakers.

This coming on the heels this last year, our Golden State suffered what only can be seen as a butt whipping by the Lone Star State in job creation. The Texas Public Policy Foundation compared Texas to California showing that Texas economically outperformed California in job creation with 129,000 new jobs in 2010 while California lost 112,000. Should we be looking for better performance from our lawmakers in Sacramento? We have 2.2 million unemployed in California right now, how will taking on a huge new government bureaucracy that eliminates private sector jobs help lower that number?

If there is a crystal ball as to how this may turn out, we only need to look north of the border to Canada. Their federal government recently disclosed a plan to cut the rates of  Canada Health Transfer payments, saying it wouldn’t be enough money to do the job. In hockey terms, that’s a cross check to the stability of their government run care.

This brings us back to the fallacy that eliminating the middleman will save the money. Ask anyone who works in the health insurance industry; are they working harder and leaner than before? Would a state created job have the same level of effort? Adding a huge new state run program is just madness.