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As Goes California: Halliburton Could Decide Who Gets Health Coverage

Americans concerned about the national direction of ‘health care reform' would do well to pay close attention to what's going on in California right now.

If the Golden State's reputation as a ‘trend setter' holds true for health care, those in need of affordable health insurance could find themselves up against private contractors like Halliburton, that stalwart of humanitarianism, or Maximus Inc., the company whose tagline is, "helping the government serve the people," but was forced back in July, 2007 to pay over $30 million to settle charges of Medicaid fraud.

The news that California's legislative leaders had agreed to consider Governor Arnold Schwarzenegger's proposal to replace current county workers who assist Californians enrolling in Medi-Cal and other social services with a private contractor "like Maximus or Halliburton" was reported back in July, but with so many devastating budget cuts making headlines this summer in the state, it barely made the radar screens of most Californians - much less the rest of the nation.

Schwarzenegger has said that privatizing eligibility for state-funded insurance, one of a slew of unilateral ‘line-item' budget cuts made by the governor at the last minute, would be "good for clients" and that it would "improve customer service." But the Orange County Progressive, in an Op-Ed dated July 3, 2009, notes that the so-called benefits of centralizing and privatizing eligibility are little more than "a myth" being perpetrated by the governor and his Republican allies.

"There is no evidence that centralized, privatized eligibility improves customer service, which is why every major client advocacy organization has come out in opposition to the proposal," says the Op-Ed.  "In fact, the results in other states show worse customer service [under privatization] ... In just the first four months of the Texas [privatization] project, more than 100,000 children lost their health coverage. After Texas terminated its contract with the Texas Access Alliance, it had difficulty staffing back up to meet demand, with people seeking benefits bearing the brunt of the problem. Offices were understaffed and calls went unanswered, leading the Fort Worth Star-Telegram to conclude ‘the ringing phones are fallout from a major experiment in state government that nearly everyone involved calls a disaster.'"

In Indiana, the most recent example of failed privatization, major media outlets and many legislators have called for a halt to the process and the state has responded by voluntarily stopping implementation in a majority of counties.

The Texas-based ‘Healthcare for All,' a non-profit healthcare advocacy organization, cites the furor back in 2006-2007 surrounding the deplorable conditions at the Walter Reed Army Medical Center (an Army hospital run by the Department of Defense) as one example of the failure of privatization: "There is a lot we can learn from the Walter Reed disgrace. Its operation was outsourced to a Halliburton-connected company in 2002, over the objections of some Army medical personnel and leadership, with a subsequent loss of government employees with institutional experience and a drastic reduction in staff. There was also some hanky-panky with the contracting process when the government employees' bid for the operations contract came in lower than the Halliburton company's bid, and the bids were subsequently recalculated to make the private company the lowest bidder." 

As recently as July 1, at an online town hall forum, President Obama was still insisting that he strongly believed "that one of the options in the exchange should be a public option." Soon thereafter, in Colorado, Obama seemed to be trying to prepare the nation for what was to come when he told his audience that a public option "is not the entirety of healthcare reform." On August 17, the Obama administration announced that it might entirely eliminate the already diluted ‘public option' piece of its healthcare reform legislation, which physician and former DNC Chairman Howard Dean recently called "the only piece of reform left in the House bill that is worth doing."  

At this point, there is still hope for including at least some kind of public option in the legislation - but only if Americans insist on it. It will take at least 218 votes to get any health care package passed out of the House of Representatives, and 64 House Democrats have promised they will not vote for a bill without a public option. That means a bill without a public option would only have 193 votes.  

As the nation grapples with the future of healthcare in America, we best ‘go to school' on California. If politicians and the insurance industry are allowed to do at the national level what they are trying to do in that trend-setting state, it could signal the beginning of the end of "healthcare for all."  

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Sandy LeonVest

Sandy LeonVest is a radio and print journalist and the editor of SolarTimes (, a publication that looks at energy from a progressive and humanitarian perspective. SolarTimes is distributed throughout the San Francisco Bay Area and beyond. Sandy is the host of “Political Analysis,” a weekly program aired on the Progressive Radio Network every Tuesday at 6pm EST/3pm PST.


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