Single-Payer Plan for Health Care Sparks Furor : Coverage: Estimates on the costs differ widely. The big question is: Are people ready to surrender private insurance cards for a state-run system?

California’s extraordinarily far-reaching universal health care initiative, in its early stages of debate, has already sparked a spirited fight over dollars--tens of billions of dollars.

In opening salvos, sponsors and opponents of the so-called single-payer initiative released wildly conflicting financial studies, with critics showing deficits in the mega-billion range and sponsors projecting monster savings.

The numbers creating such widely differing estimates are mind-boggling: The scope of the proposed plan to insure all of California’s 31 million residents starts out at $100 billion a year and grows from there. From the start, the program would dwarf the proposed state budget of $57.3 billion, an amount that represents what the state will spend over the next 12 months on public schools, prisons, existing health and welfare programs, community colleges and universities, various regulatory programs and debt reduction.

But many observers believe that for most voters the issue ultimately will boil down to a simpler, but possibly excruciating, choice: As costly as health insurance may be now, are they ready to surrender their private insurance cards for the uncertainties of a state-run system?

“Almost every Californian will have to give up his existing health plan,” Kirk West, president of the California Chamber of Commerce, told reporters last week. “When all is said and done, the great bulk of the voters will lose the health insurance they have now and it will all be (replaced by) the political system.”

Will voters go for that?

The sponsors of the initiative are hoping yes, believing that the health care safety net under most Californians is so fragile that even those with health insurance want more protection. There are also 6 million Californians with no health insurance, many of whom once were insured but lost their coverage when they were laid off, fired or lost a spouse through death or divorce.

“That person with Blue Cross today may only be a job away from losing it,” said Dr. Kevin Grumbach, a professor and family practitioner at UC San Francisco and widely published economic analyst of public health systems. “Employment these days is so tenuous that even people who think they are well-insured are close to the edge.”

Grumbach, one of the founders of the 1,000-member California Physicians Alliance, contributed to the drafting of the initiative. The alliance, along with the Congress of California Seniors and the grass-roots consumer group, Neighbor to Neighbor, formed the original coalition that drafted the initiative, although a variety of labor unions and consumer groups had been pressing for a single-payer system for years.

The initiative was drafted shortly after California voters in 1992 rejected Proposition 166, a health insurance measure sponsored by the California Medical Assn. That proposition would have mandated that all employers provide insurance, but it would have left the private health insurance system in place. Many health activists, including Grumbach, believe that was a major flaw of Proposition 166, just as they say it is a flaw of President Clinton’s national health insurance plan. They argue that health insurers drain large amounts of money from the system in profits, administrative costs and duplication of services among what they say are the 1,500 health insurers in California.

What they came up with as an alternative is a proposal that would create a new, government-run health plan to replace the current system based on private insurance. It would go well beyond what any other state has ever tried to do and would create one of the largest health systems in the world. Patterned after the health system used in Canada, it would provide even more generous benefits, to more people, than that nation, authors say.

Gone would be the old players such as Blue Cross, Blue Shield and Aetna, along with the all-important membership cards that unlocked the doors to hospitals and physicians offices for tens of thousands of Californians.

Sponsors of the initiative agree that deciding whether to jump from the old system in favor of a new, untried system will be a huge step for Californians to take.

But they are counting on people such as Susanne Griffin, an Encino attorney. She has private insurance with one of California’s largest health insurers. She recently attended a small fund-raiser sponsored by the single-payer initiative campaign at a private home in the San Fernando Valley and left saying she is willing to try the new system.

Griffin’s policy with a private insurer covers herself and one of her two daughters. It costs $244 a month and carries a $1,000 deductible, meaning the insurance doesn’t kick in until she has paid the first $1,000 of her medical bills. Because her policy doesn’t cover her chiropractor, whom she goes to regularly because of an injury from an automobile accident, Griffin said she has about $5,000 a year in out-of-pocket expenses. The single-payer initiative would free her of those expenses, while covering her chiropractor.

She estimates that under the new system she would pay $1,275 a year in higher state taxes.

“That would be half of what I am paying now” in insurance premiums, said Griffin, who contributed $100 to the initiative campaign.

Paul Milne, director of Oakland-based Californians for Health Security, sponsors of the initiative, said, “This is basically writing a new constitution for health care. Once we step through the door, there will be no turning back, but beforehand it seems an almost impossible step for people to take.”

What he is banking on, however, is that consumers will look at the initiative and compare it to what they have now. “The benefits of this program equal or exceed nearly all the packages out there now,” he said.

Even critics of the measure concede this is true. In fact, one of the opponents’ arguments is that the sponsors are promising such a rich program, there is no way the state will be able to pay for it.

The authors of the measure propose substantial increases in the personal and payroll taxes, boosts that they say would raise $46 billion a year, to help finance the system. The taxes would be offset by savings to individuals and corporations on premium and out-of-pocket expenses, which they no longer would have to pay. But critics say there still will not be enough money to pay for the rich benefit package and that by 1998 there will be a $48-billion state budget deficit.

Richard A. Wiebe of Taxpayers Against the Government Takeover, the Sacramento-based opponents of the initiative, said keying in on the public’s fears of a government-run insurance program will be “one of the key messages of the campaign.”

“The public can’t afford to ignore the numbers,” he said. “The economy can’t afford the tax increases that this measure would impose on the state.”

Opponents of the initiative cite public opinion surveys that have shown the public has more confidence in the private sector’s ability to provide insurance.

A Los Angeles Times national poll of adults in April found that many expressed a strong preference for a health care reform plan in which private insurance companies continued to play a role, with 71% saying they would like to retain private insurers and 21% in favor of a government-run program.

A Times poll of state voters in May asked those surveyed if they would vote for the single-payer initiative. That poll, conducted before the initiative signatures were filed, found sentiment running 54% to 34% against the measure, with 12% saying they didn’t know. The May poll, however, found the measure winning 45% to 41% among Democrats, and 44% to 42% among independents. The final results were influenced by a lopsided 72% of Republicans who said they would vote against it.

“There is a grave concern among members of the public that they will lose the coverage they now have,” said Wiebe, whose campaign has hired the same media firm that created the Harry and Louise ads being used by insurance companies to fight President Clinton’s health plan. “When people hear about a ‘state-run system’ I think they will say, ‘That doesn’t apply to me.’ We need to tell them that it does, that they are in danger of losing their health insurance.”

But another who attended the recent fund-raiser for the initiative, Brooke Ricketts, a waitress at a Brentwood restaurant, said she isn’t worried. She said she really hasn’t used the private policy she maintains for $80 a month. The policy has a $500 deductible, and because she enjoys good health and only goes to the doctor for annual checkups, she said she has never exceeded the deductible.

Under the initiative, her monthly payments would be cut in half, she figured. “I like the freedom of choice of it, and regardless of your job, you are always paying the same fixed percentage of your income,” she said.