Legislation may enable states to offer universal healthcare

Universal coverage, Medicare for all, single payer — call it what you will. It’s clear that conservative forces are determined to prevent such a system from ever being introduced at the national level. So it’s up to the states.

The catch is that to make universal coverage work at the state level, you’d need some way to channel Medicare, Medicaid and other federal healthcare funds into the system. At the moment, that’s difficult if not impossible.

But legislation quietly being drafted by Rep. Jim McDermott (D-Wash.) would change that. It would create a mechanism for states to request federal funds after establishing their own health insurance programs.

If passed into law — admittedly a long shot with Republicans controlling the House of Representatives — McDermott’s State-Based Universal Healthcare Act would represent a game changer for medical coverage in the United States.

It would, for the first time, create a system under which a Medicare-for-all program could be rolled out on a state-by-state basis. In California’s case, it would make coverage available to the roughly 7 million people now lacking health insurance.

“This is a huge deal,” said Jamie Court, president of Consumer Watchdog, a Santa Monica advocacy group. “This is a lifeline for people who want to create a Medicare system at the state level.”

I learned of McDermott’s bill after getting my hands on documents he had sent to other members of Congress seeking support for the legislation.

McDermott’s office confirmed that the documents and legislation are real but declined to make the congressman available for comment until the bill is formally introduced, which could happen as soon as next week.

Kinsey Kiriakos, a spokesman for McDermott, said by email that the bill is intended to advance the goals of President Obama’s healthcare reform law, which would extend coverage to about 30 million of the 50 million people nationwide without insurance.

The reform law is now under scrutiny by the U.S. Supreme Court, primarily because of its requirement that most people buy health insurance or face a modest tax penalty.

McDermott’s bill “is based on the congressman’s belief that the Affordable Care Act will be upheld and the congressman’s new bill is meant to achieve the overall goals of the Affordable Care Act while giving states the option to build an alternative single-payer system,” Kiriakos said.

California came close to building such a system in 2006 and again in 2008 when the Legislature passed bills laying the groundwork for statewide universal coverage. Then-Gov. Arnold Schwarzenegger vetoed both bills.

Another attempt at healthcare reform collapsed this year when a bill written by Sen. Mark Leno (D-San Francisco) stalled in the state Senate.

The legislation would have created a Medicare-for-all system but was vague on how the projected $250-billion annual cost of the program would be funded. That figure reflects a reallocation of current healthcare spending to include both state and federal dollars.

McDermott’s bill would go a long way toward addressing this ambiguity. It would allow federal funds for California’s 4.5 million Medicare beneficiaries and 8 million Medi-Cal recipients to be pooled with state tax money for universal coverage.

Highlighting the sensitivity of McDermott’s bill, Leno declined to comment until the legislation is formally introduced.

But this much is already clear: People in a statewide Medicare-for-all program would no longer pay annual premiums, deductibles or co-payments for private health insurance. Instead, they would pay a percentage of their income into the system, just as wages are taxed for Social Security and Medicare.

A number of studies have concluded that state-run insurance systems would be cheaper for most people on an out-of-pocket basis than existing private insurance plans.

Gerald Friedman, an economist at the University of Massachusetts-Amherst, estimated in a recent paper that a national Medicare-for-all system would cost Americans about $570 billion less annually than the amount spent on private plans.

Moreover, gone would be the problem of private insurers charging higher rates or denying coverage to people with preexisting medical conditions. If you pay taxes in the state, you’d be eligible for coverage.

Also gone would be healthcare as an issue between workers and employers. Businesses would no longer be the primary conduit for health insurance, relieving companies of what has become an increasingly costly obligation.

A draft of McDermott’s bill says that to receive federal funds, states would have to offer a healthcare plan with the same benefits as the most popular plan available to federal government employees.

It also says the state plan would have to cover any out-of-state treatment received by residents.

“If you believe that quality healthcare is a human right, as I do, a publicly financed single-payer system with universal entitlement remains the ultimate goal,” McDermott wrote in a letter to congressional colleagues.

His bill could make this a reality. Want to show your support? Email McDermott from his website and let him know that you think such legislation is long overdue.

He’ll still face a battle with conservatives once the bill is introduced. But a big stack of “yes” votes from the public could only help.

David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5. Send your tips or feedback to david.lazarus@latimes.com.