By Bill Boyarsky

I’ve been observing the health “reform” saga on two levels. One is the spectacle of the insurance industry having its way with Congress. The other is the Venice Family Clinic in Los Angeles, which provides free health care to the uninsured working poor.

In Congress, the Senate is plodding toward approval of a huge giveaway to the insurance industry. It is considering a proposal requiring almost everyone to buy an insurance policy. But so far, the plan fails to impose any serious regulation on the insurance companies. That’s a blatant gift to an industry that will benefit from the many millions of new policyholders without giving up anything in return.

In California, where I live, we have mandatory auto insurance, but thanks to a voter initiative, Proposition 103, the companies are strongly regulated and consumers are authorized to fight rate increases. Such regulation should be part of any federal health reform legislation. One need only visit a free clinic to find out why.

The Venice Family Clinic is in a couple of utilitarian buildings in the Los Angeles neighborhood of Venice, a quirky mixture of rich, poor and middle class extending a few miles inland from the beach. The clinic also operates seven other sites in the area. It was founded in a storefront in 1970 and has grown into the nation’s largest free clinic. Last year, 24,400 patients were treated at the clinic sites. With each coming in about four times a year, that adds up to roughly 100,000 annual patient visits. Federal, state and Los Angeles County funds, private donations, local hospitals and 1,547 volunteers, including 469 doctors, support the organization. Three-quarters of the patients are without insurance. The rest rely on shrinking government aid programs such as Medicaid. Venice is on Los Angeles’ Westside, the home of many moneyed people, and it’s hard to find a doctor who will work for low Medicaid fees. Hopefully, health insurance reform at the national level would allow family clinic patients to enter the mainstream of medical care.

I talked to Elizabeth Benson Forer, the clinic chief executive officer, as she showed me around the main facility in a working-class neighborhood. The clinic was clean, quiet and welcoming.

We walked past neat examining rooms, most for general care but some for eye and dental examinations. A shower and clean clothes were available for the homeless. A substantial number of patients suffer from heart disease, diabetes, asthma and high blood pressure. These, Forer noted, are “manageable and preventable” ailments. Preventable if you see a doctor, possibly fatal if you don’t.

Forer told me how the insured are falling into the growing ranks of the uninsured. “We see a lot of people who had jobs, insurance, lost their jobs, lost their insurance,” she said. “They had never been to a place that offers free care. They never expected to be here. There are people who were donors who are now patients. We hope in better days they will be donors again.”

The uninsured, she said, constitute “a failure of public policy. We have decided health care is something that should be purchased rather than thinking of it as a basic human need.”

Only the hardest-hearted Republican right-wingers would disagree with that. And they probably won’t win. Some sort of health reform bill is likely to be signed by President Barack Obama, permitting him to claim a big victory.

The legislation is expected to require everyone to have insurance. Policies for the poor, such as the people I saw in the Venice clinic, will be subsidized by the government, although the extent of the subsidies is under sharp debate. The subsidies will probably be expensive, and the more affluent will have to pay for their own health insurance.

Americans will be shocked when they are told they must buy insurance or pay a penalty. “The American people will start to … focus on the coverage and subsidies in the proposals,”wrote Drew Altman, president of the Henry J. Kaiser Family Foundation. “Will they be viewed as a good deal for the roughly $1 trillion spent over the next 10 years and as a fair deal by people who will now be required to have health insurance coverage?”

One way to assure people of a good—or at least somewhat fair—deal would be to offer them the opportunity of a government insurance plan competing with the private plans that will be available. This is the so-called public option. Such competition might force private companies to keep rates down and prevent them from blindsiding consumers with tricky clauses and conditions. The Senate Finance Committee voted down the public option, but supporters will try to revive it later in the process.

An even better way, however, would be strong regulation, such as Californians imposed on insurance companies with their Proposition 103 in 1988. “The mystery of today’s debate is that tough rate regulation is not being considered,” said Judy Dugan, research director of Consumer Watchdog, a group that has long advocated insurance reform and regulation. She noted that a 2008 Consumer Federation of America study found that since Californians imposed strong regulation, the insurance market has become more competitive, insurance prices are down and insurance company profits “are well above the national average.”

Not much of this was heard during the Senate Finance Committee deliberations on the health insurance reform bill. The insurance industry got its way and is now engaged in backroom talks to fine-tune the deal.

There was no discussion of the best solution, Medicare for all, the single-payer system. Anyone proposing that now is considered a wacko, far out of the Washington mainstream.

In the absence of such a sensible plan, regulation has to be the answer.

Without strong regulation, the companies will find ways to get around requirements of the law. For example, the reform legislation is promising guarantees that the companies can no longer refuse to sell policies because of patients’ prior health conditions or drop the ill from their rolls. The insurance companies will undoubtedly try to find loopholes in those guarantees. And even though their revenues will increase thanks to millions of new policyholders, including the healthy, they will find excuses for rate increases.

President Obama foresees reason to celebrate if he signs a health insurance bill this year. But a new law must impose strong regulation on the insurance industry or a consumer backlash could soon sour his victory, a reaction that would extend from the well-off to the working poor.

Bill Boyarsky’s new book is “Inventing L.A.: The Chandlers and Their Times.”

AP / Jae C. Hong

Ellen Geiger, 56, makes a spectacle of herself at a town hall meeting in Alhambra, Calif. There has been much debate in recent months, but it has been directed at a very narrow array of proposals. No one is arguing about the kind of tough regulation that might actually make a difference.