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Press Release
Jul 24, 2006 - 01:00 AM


CONTACT: Jerry Flanagan, (310) 392-0522 ext. 319 or cell: (310) 889-4912

Schwarzenegger's Health Care Summit Ignores Key to Affordability: Crackdown On Health Insurer Overhead and Drug Company Profits

Los Angeles, CA -- Governor Schwarzenegger's "Summit on Health Care Affordability" ignored the two leading causes of health care cost increases: health insurer overhead costs and drug company profits. The Foundation for Taxpayer and Consumer Rights (FTCR) said that Governor Arnold Schwarzenegger's health care proposals have been influenced by the huge campaign contributions he has received from health insurers and drug companies.

"When Governor Schwarzenegger is joined by insurance executives to discuss health care affordability you can be sure that they won't be talking about cutting bloated insurer profits and overhead," said Jerry Flanagan of FTCR. "The political discussion of health care reform will continue to ignore the 900 pound gorilla in the room until the influence of insurer and drug company campaign contributions are stripped out."

FTCR said that the key to a honest discussion of health care reform is to remove big business influence in the political system as proposed under Proposition 89.

Governor Arnold Schwarzenegger has received $775,200 from health insurers and HMOs and $1.08 million dollars from drug companies since 2003. For contribution lists compiled from campaign reports filed with the Secretary of State go to: http://www.ConsumerWatchdog.org/resources/Schwarzenegger_HMO_Pharma.pdf

FTCR said that the key to health care affordability is to require drug companies and health insurers to charge fair rates. Health insurer profits and overhead -- including salaries, advertising, and administration -- are the fastest growing health care costs followed closely by annual prescription drug increases. Just five HMOs control approximately 80% of the health insurance marketplace and those companies are not required to abide by anti-gouging rules that apply to auto insurers under Prop 103. For more information go to: http://www.consumerwatchdog.org/healthcare/healthcosts/

On Saturday, Governor Schwarzenegger announced a flawed prescription drug plan that will allow drug companies to continue to overcharge Californians. The plan would limit the bulk purchasing power of the state by limiting enrollment to only lower income Californians. FTCR has proposed a statewide prescription drug buying pool that would allow any Californian to join regardless of income, age, or insurance status. For more information go to: http://www.consumerwatchdog.org/healthcare/prescription/

For federal data showing that health insurance overhead costs are the fastest growing component of health care spending go to page 6 of the Health Affairs article available at: http://www.consumerwatchdog.org/resources/HealthAffairsInsOverhead.pdf

Proposition 89 establishes a system of public financing for candidates who reject private money and sets tougher limits on campaign contributions from corporations, unions and private individuals. It also closes current campaign finance loopholes and strives to reduce the influence of professional lobbyists.

The new website www.DirtyMoneyWatch.org was launched to chronicle the pay-to-pay politics in California that the passage of Proposition 89 will end.

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The Foundation for Taxpayer and Consumer Rights (FTCR) is California's leading nonpartisan consumer advocacy organization. For more information, visit us on the web at http://www.ConsumerWatchdog.org.




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