Garamendi Seeks Problem Solving

Last Monday, John Garamendi was sworn in as California’s third elected Commissioner of Insurance. Many in California’s industry think this is round two of an ongoing battle with Garamendi. I am not one of them. When I interviewed the then candidate last fall, I sensed a different man. A man more interested in solving problems than grabbing headlines and a man more seasoned by political battles and infighting on the national scene, but a man facing very difficult problems.

While he seems more interested in reforming California’s health insurance industry, he must first address California’s critically ill workers’ comp market. A workers’ comp market that is battered and broken. Garamendi said that he would seek the reinstatement of the minimum rate law (IJ Sept. 16, 2002). Curing the California workers’ comp market will take a whole lot more than that however. It will take a reinvention of a competitive market; a recapitalization of many carriers in the private sector that can provide a competitive market at a reasonable cost to California’s employers. A formidable task that is perhaps an impossible task.

The second problem facing the Commissioner is the homeowners market. Simmering quietly now, but like Mt. Etna, capable of exploding at any moment. So how does the Commissioner solve the problem of providing readily available coverage at an affordable price? Between the yet to be determined threat of mold litigation and the high cost of housing, is it possible to provide affordable HO coverage in California? Certainly another problem requiring the Wisdom of Solomon. Commissioner Garamendi’s plate is piled high with problems that have to be addressed before he can move on to the health insurance arena.

The rapidly rising cost of health insurance in California and the nation is yet another formidable problem for employers and individuals. We, as a society, have to make a decision. Do we have a moral and ethical obligation to provide quality, affordable health services to our people? Every other western democracy says yes. If our answer is yes, then how do we distribute those services and how do we pay the very, very high cost? One thing is for sure: the individual will pay the price, either in premiums or taxes or both.

The only answer to these problems is to have a vibrant, growing, even booming economy. An economy that in its prosperity can provide the funding necessary to supply government with the tax revenue it needs while increasing the quality of living for the individual. To get that economy, we need free markets, low taxes, a ready source of capital and a government that helps business instead of hinders.

Topics California Workers' Compensation