Though the Affordable Care Act—AKA Obamacare—was a major step forward to giving Americans universal affordable health insurance, it still has flaws, notably cost control. And now that the Trump Republicans are continuing to devise an even less accessible system, the California legislature is working on putting a system in place to provide the kind of health care most of the developed already has. State Senate Bill 562 is currently being heard in committees with a real chance of being passed and signed by the Governor. It recently passed the Health Committee and is due to be heard in Appropriations.
At the American River Democrats’ April meeting, we welcomed Shirley Toy and Zulma Michaca from the California Nurses Association. Their organization supports SB 562, because health care (not health insurance)is a human right. The Affordable Care Act was a great improvement, said Toy, but not enough. Costs continue to rise, and ACA didn’t do enough to change that. While the rest of the developed world pays less and gets better care, in the U.S., costs continue to rise while the Trump administration and Republican congress try to reach a compromise to end the ACA, and replace it with something “fantastic.” While the house finally passed their version, the Senate Republicans are struggling to make a less “objectionable” bill, but every proposal so far has robbed millions of the benefits they now have, while cutting taxes for the wealthy.
Meanwhile, American businesses large and small have problems competing with each other, and with international firms who don’t need to provide health insurance to their employees. Companies are forced to bargain health benefits with current and potential employees, while those in the “gig economy” and small business start-ups have to face big bills to get health care for themselves and their families.
The big question for bringing single-payer health care to California is how to pay for it. Toy pointed out that we already pay—and one-third of our insurance money goes to administration, marketing, doctors’ staff who deal with insurance, and profits for the private insurance companies. And the cost hospitals incur for treating uninsured people, especially in emergency rooms, gets built into the fees they charge paying customers. But just saying we already pay too much doesn’t actually fund the alternative! As club member Dr. Bill Durston pointed out, even the best idea needs a funding mechanism—the previous single payer bills would not have worked had there not been a companion bill to cover funding.
The bill currently says “It is the intent of the Legislature for the state to work to obtain waivers and other approvals relating to Medi-Cal, the state’s Children’s Health Insurance Program, Medicare, the PPACA, and any other federal programs so that any federal funds and other subsidies that would otherwise be paid to the State of California, Californians, and health care providers would be paid by the federal government to the State of California and deposited in the Healthy California Trust Fund.” So that means that any money coming into California from the Federal government for healthcare would be funneled into the fund first. Additional money would obviously be needed. The remaining funding is not specific in the current bill, stating “It is the intent of the Legislature to enact legislation that would develop a revenue plan, taking into consideration anticipated federal revenue available for the program. In developing the revenue plan, it is the intent of the Legislature to consult with appropriate officials and stakeholders.”
So clearly, funding will also come from a combination of taxes and fees, to be specified in a companion bill, most likely. Though many, especially Republicans (and some Democrats) will claim it is a big tax hike on Californians, it should save money overall, as both the elimination of insurance company overhead, and using the power of large-pool negotiation with providers and drug companies, should allow for big savings. But then there is always the danger of bureaucratic waste and fraud, so the managers—the “Healthy California Board” and their staff—will have to be extremely vigilant in managing the program. If California proposes to provide a viable alternative to the national Trump/Republican plan, all of the citizens will need to see they are getting a good deal for good health care.
What do we get if SB 562, and a companion funding bill, are passed? All California residents will be eligible to enroll in a common health care system (like insurance, but different.) You choose your doctor, and/or “Care Coordinator,” who keeps track of your records and treatment. You may go to specialists without referrals, and coverage includes dental care, emergency, diagnostics, rehabilitation, substance abuse, prenatal care, mental health, prescription drugs, and more. You may also use a health care organization; a non-profit that coordinates care (like Kaiser, and others.)
Rates paid to providers are negotiated to insure both fairness to the doctors, medical staff, facilities, and drug companies, as well as the taxpayers of California who support the system. An immediate savings of at least 25 to 30 percent will come from the elimination of the insurance company costs. The system will be run by an independent board of nine Californians, appointed by the Governor and legislature, and chosen based on a background and expertise in health care; and must have at least one member from the general public, a nurses labor org., another labor org., and someone from the medical provider community. There will also be an advisory committee, representing a wide variety of citizens and representatives of various medical fields.
The political will needed, and fight to get this passed, will be formidable. Conservatives hate any government control of the market, even for essential services like health care. And conservative Democrats are reluctant to go too far, and risk losing support of the insurance and medical industry. While many organizations, like the California Nurses Association, labor unions, and many more support the idea, many doctors may fear losing income under this system.
But there is a lot to recommend it too, even to conservatives. Imagine the boon to businesses large and small if they no longer need to worry about providing health insurance benefits to attract good employees, and for the larger companies who are compelled to provide some form of coverage by law. Workers will have more choice to choose better jobs without worrying about losing or interrupting their health coverage. And entrepreneurs will be free to follow their dreams without the threat of bankrupting their families to buy insurance while they try to launch a small business. Is it worth paying somewhat higher income tax and potential business tax, if the payoff is so great? After eliminating the cost of health benefits for both employees and retirees, businesses will have a huge surplus of cash to help them chip in. And individuals who have insurance costs deducted from their paychecks today may not even notice a tax increase. A successful launch of this system will no doubt draw more businesses to California once it has proven it works.
The plan was designed following the model of developed countries around the world who provide better health care to their citizens than the U.S. does today. And as the bill progresses through the legislative process it will no doubt evolve further, especially the funding process. But the time to strike is now, with Democratic majorities and a Democratic Governor, (but one who still needs to be convinced.) For more information about this bill, see Healthy California.org, and let your representatives know you are behind it, especially those who may be on the fence, like Assembly Members Cooley and Cooper, and State Senator Pan.
Ken Kiunke, Communications Secretary