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CA Senate Passes $400 Billion Single-Payer Health Plan

On June 1, California senators voted to pass a $400 billion plan to create a government-run, single-payer health care program for California's 39 million residents. Under the program, private insurers would be restricted from offering services already covered by the state's plan.  The bill passed 23 to 14 and will now proceed to the Assembly.

Senate Bill 562, dubbed the “Healthy California Act,” was proposed by Democratic State Sens. Ricardo Lara and Toni Atkins.  Unlike Covered California, which is a subsidized public-option marketplace designed to compete with private insurers, SB 562 renders private insurers obsolete by requiring the government to pay for all health care services in the state of California.  Residents of the state would automatically become enrolled in the new plan, which would reportedly replace premiums, co-pays, and deductibles with a single payment structure.

“You’ll never have to deal with an insurance company again,” said Michael Lightly, policy director for the California Nurses Association, a strong supporter of the proposed bill.

The bill comes at a time when liberal voters are grappling with the prospect of health care repeal.  It is described on its website as “Medicare for all,” a similar sentiment to the one advocated by Independent Sen. Bernie Sanders of Vermont in his 2016 presidential campaign.  It has proven to be controversial not only across partisan lines, but within the Democratic Party itself. Much of the bill's debate has to do with its hefty price tag.

The estimated cost of implementing a universal health care system would require $200 billion in private funding.  Proposals to secure the necessary funding include a payroll tax and a 2.3 percent increase in state sales tax and gross receipt tax for California businesses.  Other plans include applying some of the current subsidies for Medi-Cal and Medicare to the new plan. 

A study conducted by the Political Economy Research Institute at the University of Massachusetts Amherst estimates that the new plan could save California’s residents up to 9 percent of health care costs.  That same study also estimated a reduced total cost of $331 billion as opposed to $400 billion, and was partially funded by the California Nurses Association.

The uncertainty of funding, coupled with the fact that it exceeds the state’s $124 billion general fund budget, is enough to make legislators doubt the plan’s feasibility.  Republican opponents of the bill include State Sens. Tom Berryhill and John Moorlach, the latter of which likened the legislation to being in a car with “Thelma and Louise.”

“Colleagues, cliff dead ahead,” he quipped.

The concern is by no means limited to the Republican Party. Democratic State Sen. Steve Glazer called the bill “premature.”  Democratic State Sen. Bob Hertzberg echoed his fellow democrat’s mentality, asserting that the plan was “not cooked”.  

“The people of our state deserve a more substantive discussion,” said Democratic State Sen. Ben Hueso. “I don’t know what I’m voting on.”

Lara seemed to acknowledge the shortcomings of the bill’s plan, claiming to not want to rush the bill too prematurely.

“The last thing I want to do is to create another financial burden on the state,” Lara said.

The bill still faces several approvals before it can be signed into law -- one of which is a vote of the California people, as reported by National Nurses United.  According to a May 31 poll conducted by the Tulchin Research firm and sponsored by the California Nurses Association, 70 percent of Californians support the premise of the Healthy California Act.  The number drops to 58 percent after being presented with opposing arguments. 

Sources: The Mercury News (2), Healthy California, Los Angeles Times (2), National Nurses United / Photo credit: Pictures of Money/Flickr

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