Capitol Journal: Single-payer healthcare in California? Time to take a cold shower and return to the real world
A state-run universal healthcare system? California only? It’s fantasy.
Current legislation in Sacramento is fatally flawed and foolhardy.
Why? It would be astronomically expensive, politically impossible and beyond state government’s competence.
But it’s a rallying cry for many liberal followers of Bernie Sanders. And some Democratic legislators are seriously pursuing the idea, urged on by the politically powerful California Nurses Assn.
The nurses were marching and shouting at last weekend’s Democratic Party state convention in Sacramento. Their hero is Lt. Gov. Gavin Newsom, whom the nurses have endorsed to replace the termed-out Gov. Jerry Brown in next year’s election.
They like Newsom because he installed a local universal healthcare system as San Francisco’s mayor.
The activist nurses have also endorsed state Sen. Ricardo Lara (D-Bell Gardens) for California insurance commissioner. He and Sen. Toni Atkins (D-San Diego) are sponsoring the universal healthcare legislation. It’s called “single payer” because the state would pay for all healthcare in California.
Lara is chairman of the Senate Appropriations Committee, where his bill, SB 562, is expected to be approved and sent to the Senate floor. It’s up against a June 2 deadline for Senate passage to the Assembly.
But Lara’s own committee staff may have dealt the bill a mortal blow Monday with a candid analysis of the legislation.
The annual cost was eye-popping: $400 billion. Of that, $200 billion would come from existing federal, state and local funding for healthcare. The remaining $200 billion would have to be raised from higher taxes.
OK, let’s put those dollars in perspective. The governor is proposing total spending of $290 billion for everything — schools, prisons, healthcare etc. — in the next fiscal year. That includes about $107 billion from the federal government and $183 billion from the state.
Spending on Medi-Cal healthcare for the poor is projected at about $106 billion. It covers a third of Californians. Of the spending, $68 billion is expected from the Trump administration. Yeah, right! The state general fund is down for just $18.6 billion. Still, that’s 15% of the $124-billion general fund.
The game plan of universal healthcare activists is to convince President Trump and the Republican-controlled Congress to transfer all the Medi-Cal billions to help leftist California finance a single-payer system, something they’d fear and deride as socialized medicine. A non-starter.
In fact, Trump proposed Tuesday to chop Medicaid — the national umbrella of Medi-Cal — by $616 billion over 10 years. So it’s doubtful California will be able to even hold on to all the federal Medi-Cal dollars it has.
Moreover, California’s Trump-bashing Democratic leaders aren’t exactly on genial negotiating terms with the White House or Congress.
But that aside, there’s the matter of finding the remaining $200 billion to be raised.
The committee analysis assumed a 15% payroll tax on income. This in a state that already suffers from the highest income tax rates in the nation. To raise them even higher would require a two-thirds legislative vote. And taxes would be hiked, in part, to provide healthcare for roughly 2 million people who migrated here illegally. Not a good political scenario.
Actually, the number-crunchers theorized, companies would probably increase employees’ salaries because they’d be freed from paying for healthcare premiums and have spare money for compensation. So that would help workers pay the higher taxes. Sure, of course. They’d be more likely to buy a corporate jet.
But if all this dream-world stuff happened, there’d still be between $50 billion and $100 billion in new money needed to fund a single-payer healthcare system. There’d be no premiums, co-pays or deductibles — and therefore no self controls. So who knows how steep new medical costs would climb?
Supporters point out, however, that the idea is to eliminate insurance company profits and reduce overall healthcare costs. A good argument.
Don’t get me wrong. I’m all for national Medicare for everybody of all ages. You don’t hear many gripes about Medicare. But this wouldn’t be Medicare. It would be a program run by one state. And whether it’s up to the job is questionable.
Anyway, Brown would probably veto the bill.
“Where do you get the extra money?” he asked rhetorically when queried by reporters in March.
The governor totally dismissed the idea and lapsed into Latin: “This is called ignotum per ignotius…. In other words, you take a problem and say, ‘I’m going to solve it by something that’s even a bigger problem,’ which makes no sense.”
The legislative committee’s analysis shocked the Capitol.
“People are running around with their hair on fire because of the numbers,” one Democratic aide told me.
Supporters took refuge in the report’s opening line that the dollar estimates “are subject to enormous uncertainty.”
Lara and the nurses association said they are awaiting a more comprehensive report from the University of Massachusetts, Amherst. “It will identify potential funding sources and savings that will allow California to reach universal coverage,” the senator predicted.
“We’re not deterred,” asserted Michael Lighty, public policy director for the nurses union. He said the aim is to pass a bill by the end of summer.
Forget it. Don’t waste the effort. Take a cold shower and return to the real world. Focus on what’s doable.
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