On Health Care, a Matter of Trust : The Canadian-style plan proposed for California promises health security, but includes job losses and more taxation.

As Congress hammers out its final version of health-care reform, the bipartisan compromise legislation is moving away from radical changes to the current system. As Congress pushes incremental approaches, the focus is on meaningful reform and phase-in strategies to meet President Clinton’s goal of universal coverage. The moderate view in Congress may reflect the general shift noted in the recent Times Mirror poll that shows public support for employer mandates waning even though the desire for universal coverage remains strong. Oddly, as the pendulum swings to the right in Congress, Californians are swinging left as they open their debate on the single-payer model for health care.

This is not the first time that the state has looked at Canadian-style health-care financing. Since 1990, consumer and physician advocate groups have supported state Sen. Nicholas C. Petris (D-Oakland) in his attempt to get a single-payer system through the Legislature. But even though supporters of the single-payer system were able to muster a majority in both the Senate and the Assembly, they were not able to get the required two-thirds vote to pass the legislation. So, Glen Schneider, campaign manager for Californians for Health Security, said, “It was time to place the single-payer model directly in front of the California voters in November.”

Comprehensive benefits are proposed under the California Health Security initiative: preventive services, including dental and psychological care, prescription drugs and long-term care. It will keep the familiar private fee-for-service system intact, giving physicians greater control in the delivery of services as well as maintaining existing health-maintenance organizations such as the Kaiser Foundation. Ultimately, whether a fee-for-service provider or an HMO will survive in this new financing scheme will be determined by consumer assessment of quality of care. In addition, the new system promises to eliminate insurance forms. Advocates of the single-payer system believe that if government can efficiently process millions of tax returns, it certainly should be able to pay health providers with equal efficiency.

As ideal as these benefits sound, they come with costs. The costs do not exceed the present costs that we pay for our private and public system, but do require everyone to contribute their fair share toward universal and comprehensive coverage. The cost of providing universal coverage for all Californians will be about $100 billion. More than half of the revenue would come directly from government programs such as Medicare and Medi-Cal. The rest would be generated by eliminating employer-based premiums and using a payroll tax on employers, a flat 2.5% income tax, a 2.5% surtax on those who make incomes above $250,000 for individual returns and $500,000 for joint returns and a $1-per-pack tobacco tax.

Taxes alone may frighten many voters away from supporting the initiative unless they realize that the risk of no coverage or inadequate coverage is potentially more devastating. Other issues will be the windfall savings large employers will receive when they no longer pay health-insurance premiums and whether they will use it to create more jobs. For small and medium employers who have never provided health insurance, the new payroll-tax requirement will create fertile ground for opponents to argue that layoffs are inevitable. Proponents of the initiative agree that there will be an employment impact on the 50,000-plus private health-insurance employees who will be displaced by the new public system.

There is no doubt that the campaign faces an uphill battle in persuading voters to accept higher taxes as well as potential job loss. Yet dwarfing these issues is persuading the public that government can be trusted to provide these services. Thus far, supporters have built their government efficiency argument on scapegoating the private health-insurance industry. Fraud and waste certainly exist in the private sector, but government-run agencies are definitely not immune from such practices. Furthermore, Americans do not share the Canadians’ history of trusting government or placing individual rights subordinate to the collective good. Unless voters can be persuaded that government really works for them, the single-payer initiative will face the same fate of any other tax-and-spend proposal come November.