With concern rising that a Republican alternative to Obamacare could fail to adequately cover pre-existing conditions (“Eight billion won’t even begin to cover it,” one Washington insider told THCB late this week) and will likely sharply cut benefits for Medicaid recipients, a number of states are preparing contingency plans. Some are preparing legal challenges. In California, progressives are once again laying the groundwork for a single payer system.
Could it happen? And could California serve as a model for other states?
California, the largest state in the union by population and the world’s sixth-largest economy, has good reason to push public policy in the opposite direction.
The University of California Center for Labor Research estimates that should the ACA be repealed, California would lose 29 thousand jobs and over $23 billion. California, of course, accepted the ACA Medicaid expansion, lowering its uninsured rate by 45% between 2013 and 2015. This makes the state one of the most vulnerable to any Obamacare repeal.
Under the ACA’s Medicaid expansion, California’s Medicaid program, known as Medi-Cal, became the largest such program in the United States. As of November 2016, the program covered more than 12.2 million people. Under the AHCA, Medi-Cal would have far less federal funding, and California would have to reduce eligibility thresholds or cut existing benefits for many of those enrolled in the program.
Sacramento would have to come up with the money somehow.
That development would probably trigger an economic crisis in the already-fiscally strapped Golden state, where tensions are already high over Washington’s threats to pull federal funding over the “sanctuary cities” issue.
But that doesn’t mean it won’t happen.
Reviving the Single-Payer Conversation
This past February, State Senators Ricardo Lara (D-Bell Gardens) and former Assembly Speaker Toni Atkins (D-San Diego) introduced Senate Bill 562, known as the “Healthy California Act.” Since then, it’s been amended in late March and mid-April, adding details on eligibility, benefits, and—the question that’s on most people’s minds—how California would fund such an endeavor.
Lara’s office says that it would provide coverage to all of California’s 39 million residents, including medical, emergency, dental, vision, nursing home care, and mental health. According to universal healthcare advocacy group Healthy California, it would eliminate insurance networks, copays, deductibles or other unforeseen out-of-pocket expenses. In addition, it aims to push insurance providers out of of coverage, by preventing them from offering coverage for services already included in the plan.
Recent additions to the bill include provisions that Californians would be able to choose their own doctors, and referrals would not be required.
SB 562 isn’t the first attempt to implement single-payer in California. In 1994, Proposition 186 left the decision up to voters, but heavy campaigning by the insurance industry helped lead to its defeat. SB 840, “The California Universal Healthcare Act,” was introduced in 2006 and 2008, only to be vetoed by then-Governor Arnold Schwarzenegger. State Senator Mark Leno re-introduced SB 840 in both the 2009-2010 and 2010-2011 terms, but failed to garner the necessary Senate votes.
Since then, the California Nurses Association—one of the most important supporters of a single-payer system—retreated from pushing legislation to gather support at the local level, a strategy that now seems to be serving them well.
Several other grassroots organizations have been leading the charge for a single-payer system—including Health Care For All, CaliforniaOneCare, and Healthy California—by organizing rallies at the state capitol in Sacramento and organizing town halls with local, state, and federal lawmakers. Healthcare non-profits have also thrown their weight behind SB 562, including Physicians for a National Health Program and National Nurses United.
This past month, several cities—mostly in the San Francisco Bay Area—have voted to endorse the bill, including Richmond, Oakland, Berkeley, and San Francisco itself. Los Angeles Mayor Eric Garcetti wrote a letter to the Senate Health Committee stating his official support last March.
Opponents Cite Disruption, Budget Strains, and Coverage of Undocumented Workers
The bill isn’t without detractors. Charles Bacchi, president and CEO of the California Association of Health Plans, said that “past studies have shown [single-payer systems] are incredibly expensive and would be disruptive.” The trade group has consistently opposed single-payer proposals in the past. According to San Francisco PBS station KQED, Bacchi made the statement without having first seen the bill.
Sally Pipes, CEO of the San Francisco-based Pacific Research Institute, another frequent critic of progressive attempts to reform the health care system, calls SB 562 a “utopian socialist plan that will be very costly for the state budget and result in major tax increases for Californians.”
Insurance companies in the state have historically opposed single-payer proposals. They claim it would make quality care less accessible, raise taxes, and pull California back into dangerous budget deficits. Other opponents to the bill will likely cite that it would specifically cover undocumented workers and residents.
Even California Governor Jerry Brown, a veteran of four decades of budgets in Sacramento, isn’t sold on the idea, yet. He is skeptical about costs and funding, and according to the Mercury News, asked “Where do you get the extra money?”
Fiscal Details Still Unclear
The biggest question, of course, is how the state would pay for an overhaul of the current insurance model. The single-payer bill as written right now bill does not address the fiscal challenges the state would face should it be passed.
At a healthcare-focused Town Hall in Berkeley in March, Assembly member Rob Bonta (D-Oakland) suggested that tax revenue from Proposition 13 reform could help fund a single-payer system. California voters passed Proposition 13 in 1978 to limit the taxable value of properties and year-to-year tax increases. While the proposition helped many low-income home and property owners, commercial and wealthier property owners have found loopholes to avoid paying billions of dollars in taxes. The union-backed Make It Fair lobby has been pushing to split Proposition 13 to make commercial property owners pay taxes at a higher rate.
Recent additions to the bill shine more light on the fiscal details than when it was first proposed. According to Lara’s office, California would seek waivers from the federal government for Medi-Cal, the Children’s Health Insurance Program, Medicare, and the Patient Protection and Affordable Care Act to offset the cost.
Should the Republican led Congress have their way, California will need more than just talk to keep access to affordable healthcare for its citizens.