After state Assembly Speaker Anthony Rendon (D-Paramount) pulled the plug last year on a fast-moving but half-baked Senate bill to guarantee premium-free health insurance to all Californians, the nurses union that sponsored the legislation called it a "cowardly act" and threatened to push for a recall election.
The wisdom of Rendon's action became even more apparent last week, however, when UC San Francisco released an Assembly-commissioned report on the path to universal health coverage in California. Based on a series of hearings by a select committee appointed by Rendon, the report shows how many obstacles stand in the way — and how many issues the Senate had left unresolved.
The Senate bill, SB 562, by state Sens. Ricardo Lara (D-Bell Gardens) and Toni Atkins (D-San Diego), would have converted California into a single-payer healthcare system, with the state government footing the bill for a comprehensive insurance plan covering all residents. But as the select committee's hearings noted, switching to single payer would solve only some of the fundamental problems in the healthcare system. And those hearings didn't determine how much the effort would cost or how it would be funded.
That's not to argue that single payer isn't worth pursuing. Attaining universal insurance coverage is vital for both moral and economic reasons, as it's instrumental in controlling ever-rising healthcare costs. And single payer may very well be the most efficient way to get there. But the state can't hope to make the switch without understanding what's involved.
The state's smart and aggressive implementation of the 2010 Patient Protection and Affordable Care Act (better known as Obamacare) caused one of the most dramatic increases in insurance coverage in the nation, cutting the rolls of the uninsured by more than 50%. Nevertheless, according to the UCSF report, about 3 million state residents remain uninsured — almost 60% of them immigrants in the country illegally. The report also notes that even those who do have insurance are increasingly struggling to pay the rising out-of-pocket costs of care and, if they aren't covered by an employer's group plan, to find doctors who'll take their insurance.
A single-payer system could improve the situation on several fronts. By combining everyone into one risk pool, it would reduce the average cost of coverage. With only one insurer to deal with, doctors and hospitals could slash the cost of billing and tracking who pays for what care, potentially cutting expenses by 14%, UCSF estimated. Removing private insurers from the mix would eliminate their markups.
But even if the state found a way to channel all the money now spent on insurance into a new single-payer system, it still would have to find a way to pay for expanding coverage to lower-income uninsured Californians. That category includes a sizable percentage of those who are in the country illegally and aren't eligible for a penny of federal help. Today, Medi-Cal — a single-payer system for the poor and disabled — spends more than $7,000 annually per enrollee. At that rate, covering immigrants here illegally would cost the state close to $13 billion more a year, or almost two-thirds what it's spending on Medi-Cal now.
It may very well cost less than that to insure the uninsured, given how many of them are relatively young and healthy. But cost is just the first question. As the report notes, declaring a healthcare-for-all policy would make California a magnet for anyone who needed expensive healthcare. In other words, it would make the state a hotbed for medical tourism — on California's dime. How would the state draw the line between the residents who were eligible and those who weren't? What forms of treatment would be covered, and who would decide?
The report raises these and a slew of other nettlesome issues — such as how much to pay for medical treatments, what procedures should be covered and how to slow the growth in costs without sacrificing quality — without answering any of them. Nor does it suggest a way to steer around the multiple barriers to a state single-payer system imposed by federal Medicare, Medicaid and employer-benefits laws. Instead, it suggests the state hand off these inquiries to a new commission.
Rendon's select committee also explored some short-term steps to extend insurance to more Californians and make coverage more affordable. Most of their ideas carry a hefty price tag for taxpayers, and many of them raise questions similar to those lingering over single payer. So before lawmakers undertake major new commitments or make beguiling promises to their constituents, they should redouble their efforts to get answers. A commission would be a good place to start.