California Could Be on the Verge of Passing Single-Payer Health Care

Yves here. I really hope that Sonali Kolhatkar is right and single payer will become law and launch in California. But other promising California initiatives have hit the wall in the past, like a bill outlawing surprise billing. From a 2018 post, Hospitals Block ‘Surprise Billing’ Measure In California:

This article demonstrates the power of health care industry incumbents. “Surprise billing” is pure and simple price gouging, particularly since hospitals routinely game the system, such as by scheduling doctors who are not in a patient’s network on his operation, even when the patient has gone to considerable lengths to try to prevent that.

All these hospitals did was the equivalent of yelling “Boo” at the legislature, and the legislation to combat surprise billing was yanked, even though there has been a great deal of deservedly critical press coverage of this abuse.

Now to today’s offering.

By Sonali Kolhatkar, the founder, host and executive producer of “Rising Up With Sonali,” a television and radio show that airs on Free Speech TV and Pacifica stations. She is a writing fellow for the Economy for All project at the Independent Media Institute. Produced by Economy for All, a project of the Independent Media Institute

Imagine living in a society where a medical diagnosis does not trigger crippling fears of the cost of treatment and prescription drugs, where switching jobs or being laid off didn’t include considerations around health insurance coverage, where trips to the emergency room don’t generate thousands of dollars in bills, and where the out-of-pocket cost of seeing a doctor is zero.

If two-thirds of California’s state legislators choose to cast votes in favor of Assembly Bill 1400, they could soon make such a society a reality for the residents of the nation’s most populous state.

The bill, introduced by State Assemblyman Ash Kalra in early January and sponsored by the California Nurses Association, would establish a publicly funded system in California guaranteeing free-of-charge health care to all residents, including immigrants. The system, dubbed CalCare, would cover medical, dental, and vision care, as well as mental health care. There would be no monthly premiums, co-pays or deductibles. Health care providers would simply bill the state government rather than insurance companies or patients.

If it sounds too good to be true, it’s because we have simply not allowed ourselves to imagine such a streamlined health care system could be possible in the United States. Most of us perhaps assume it is entirely normal to live in a society where corporations and the wealthy elites who run them can profit off our health care.

Kalra had introduced the same bill a year ago, but because of the usual objections based on funding the costs of a publicly run health care system, 1400 failed. This time around, the assemblyman introduced an accompanying amendment, ACA 11, outlining how to pay for CalCare.

His plan is relatively simple: a fairly progressive taxation plan, requiring a modest 2.3 percent tax on companies that make more than $2 million a year, payroll taxes of 1.25 percent on businesses employing 50 or more people (which would naturally replace the costs to businesses of covering health insurance premiums for those same employees), and a 1 percent tax on those individuals earning between $49,900 and $149,509 a year. Those making more will “pay an additional income tax based on specified marginal tax rates and adjusted for inflation,” as per Kalra’s fact sheet on ACA 11.

This sounds imminently reasonable. Take a Californian making a comfortable salary of $100,000 a year. Their typical monthly health insurance premiums for themselves and/or any dependents is likely no less than $500 a month—a low estimate—amounting to 6 percent of their salary. In comparison, under CalCare, this hypothetical member of the taxpaying public would be spending only 1 percent of their annual salary, or $1,000 per year, in health care costs via taxes.

The reason for such a stark difference is twofold: the current system’s high administrative costs, and the profits that insurance companies insist are essential to providing excellent care. AB 1400 would eliminate both the bureaucracy of complicated billing systems, and the bounty that CVS/Aetna, Anthem, and the like siphon off in profits.

According to one estimate, California currently spends a whopping $400 billion a year in total health care costs—this, even with an estimated 2.7 million Californians lacking health insurance. Compare this to the state Assembly Appropriations Committee’s cost estimatefor AB 1400 of $314 billion to $391 billion, which would cover all Californians.

Yet the naysayers are up in arms with utterly depressing predictability. Los Angeles Times columnist George Skelton, who has a history of excoriating single-payer health care policies, wrote yet another screed, dubbing AB 1400 “contentious” and complaining on behalf of for-profit corporations that “[i]nsurance companies would be shoved aside” if CalCare were to become a reality.

Skelton engaged in the standard bait-and-switch logic that critics of universal publicly funded health care resort to, in comparing current government health care costs to future costs without factoring in the savings to individuals and employers who would no longer be paying premiums, and without accounting for the savings from transforming complicated administrative billing into a streamlined system.

Skelton also resuscitated a standard fearmongering tactic, saying that “[p]eople would be switched from their current coverage—whether private, federal Medicare or Medi-Cal for the poor—to a new state-run plan called CalCare.” In fact, Californians who are currently lucky enough to have overpriced for-profit health care would remain with their current providers, minus all the onerous out-of-pocket costs. Those providers would simply bill the state rather than insurance companies.

Also joining Skelton in opposition to AB 1400 is the California Chamber of Commerce, which sent a letter festooned with corporate logos and the logos of local chambers of commerce, claiming that AB 1400 would be a “job killer,” the go-to excuse for businesses seeking to preserve their bottom line. The signatories, like Skelton, also make wild claims about the tax increases needed to pay for CalCare without accounting for the cost savings from ending premiums, co-pays, deductibles, administrative overhead and corporate profits.

In spite of the barrage of anti-single-payer propaganda that we are steeped in, support for a bill like AB 1400 remains strong. A May 2021 poll found 60 percent public support in California. Imagine how much bigger that number would be if Californians weren’t constantly exposed to the sort of misleading analysis that corporate media outlets like the Los Angeles Times print.

On January 20, the Assembly Appropriations Committee passed AB 1400, clearing the way for a floor vote on the bill by the end of the month. In spite of the California Democratic Party’s stated support of single-payer health care on its platform, not all Democratic Assembly members support AB 1400 (predictably California Republicans strongly oppose it). Most worryingly, California’s Democratic governor Gavin Newsom, who campaigned on single-payer health care, is wavering. Grassroots supporters like the California Nurses Association and Public Citizen are campaigning to push state lawmakers and Newsom to do the right thing.

Even though AB 1400 is a California-based effort, it has national significance. If CalCare becomes a reality, it would offer a critical precedent for similar single-payer bills in states across the nation, unleashing momentum behind the undeniable importance of ensuring free, publicly funded health care for all.

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  1. Oh

    Skeleton the shill for insurance companies is qoted as saying “… complaining on behalf of for-profit corporations that “[i]nsurance companies would be shoved aside” if CalCare were to become a reality.”

    Yup! That’s the idea. Let’s get rid of the scum.

    1. JBird4049

      All levels of government along with some debt collectors can just garnish the money in your bank account. Any debt strikes would have work arounds for them, which is why the creeps are pushing electronic money only while trying to squeeze out physical cash.

  2. Sawdust

    The vaccine mandate has lowered my enthusiasm for this sort of thing. It’s gotten harder to imagine our benevolent rulers not using it as a carrot/stick to bring us into compliance with whatever cool new idea they have. Today people are unwilling guinea pigs for Pfizer. Will they be guinea pigs for Neuralink tomorrow?

    1. Arizona Slim

      I’m with you on that one, Sawdust.

      However, there’s that pesky little issue called freedom of choice. There’s a bunch of Canadian truckers who are being rather vocal about that one right now. And Canada has what we Americans would call Medicare for All.

      1. Frank Miata

        Gee Slim, that settles then, Canadian truckers are unhappy with their medical system in Canada. Any idea why? Nice to know.

      2. PCM

        No, Canada does not have what we Americans would call “Medicare for All.” American Medicare is a federal, national program that provides basic coverage to seniors, kidney patients, and a smattering of others. Medicare for All is a federal, national, single-payer program that would cover virtually everything for virtually everyone, equally. What Canada has is a provincially/territorially based 15-plus-payer program: 10 different government-run systems for each of the provinces; 3 different government-run systems for each of the territories; 1 government-run system for the military; 1 government-run system for federal prisoners; and numerous private insurance programs for dental care, vision care, out-patient pharma, long-term care, and (in Quebec, at least) ambulance service.

        Much of the dissatisfaction with the Canadian system stems from the fact that it is not a comprehensive national program:

        • The federal government has been massively welshing on its original commitment to fund 50% of provincial healthcare costs, leaving the poorer provinces scrambling to provide minimally adequate care.

        • Similar to their American colleagues, Canadian healthcare professionals are organized in provincial/territorial cartels that severely restrict the supply of physicians, generating artificially high provider incomes (the goal) and artificially long treatment delays (the “regrettable” side effect). If one province or territory threatens to squeeze provider incomes, the cartels can respond with a brain drain (providers moving to a different province that doesn’t squeeze their incomes). [This, by the way, is the reason so many American physicians have abandoned Medicare for All and flocked to state-by-state “single”-payer — meaning 50-plus-payer — as an alternative: they get to keep their ugly little state-based cartels’ power to play states off against each other in a race to the top in compensation.]

        • The Canada Health Act only contemplates hospital, physician, and in-patient-pharma coverage in the provincial and territorial systems. If a province or territory were to expand coverage to include out-patient pharma, dental, vision, and/or long-term care, it would find itself facing a free-rider problem — an influx of poor domestic migrants who haven’t “paid into” the system coming to claim benefits — and it would run up against federal-system race-to-the-bottom constraints in designing a funding system to pay for the new benefits. (If the tax structure is too progressive, corporations and rich people move to a province where the structure is less progressive. We see this dynamic in the US all the time.) Realistically, there can be no significant expansion of benefits in Canada’s provincially/territorially based system in the absence of a federal mandate.

        There are a lot of lessons Americans can learn from the Canadian healthcare system’s shortcomings, but in the interest of brevity I’ll stick with just one: if you support reasonably egalitarian, reasonably cost-effective universal healthcare, do not under any circumstances call state-based efforts like CalCare “single-payer” or “Medicare for All.” State-based efforts may seem to work for a while and may actually end up costing no more than the current fragmented mish-mash of public and private plans in the big states, but they will never be viable in one- and two-horse states (Wyoming, Alaska, Vermont, the Dakotas, etc.), they will face severe free-rider, race-to-the-bottom, and brain-drain constraints, and they will contract, crash, and burn in the wake of the first serious economic recession, when tax revenues fall. (States can’t “print money” and most of them can’t run budget deficits. Funny how everyone seems to have forgotten this.) National single-payer is the only solution that can both provide comprehensive universal care and significantly curtail how much Americans are being ripped off for it, and you don’t want to queer its long-term prospects by associating it with doomed-to-fail ersatz substitutes.

    2. Deb Pasoto

      That is exactly my feeling. I was a strong proponent for universal healthcare and abolishing insurance companies, but the pandemic and vaccine campaign have shown that there is negative integrity (like negative efficacy of vaccines) that makes healthcare other than beneficial. I assume it would be a tool of our owners.

      1. Left in Wisconsin

        So you all (Sawdust, Slim, Deb) are now opposed to Medicare?

        The biggest win of the neoliberal era has been convincing people that government is incapable of doing good. And yet the country would be (even more) completely dysfunctional if there weren’t millions of public employees doing good work day in and day out. Just because gov’t can be sh1tified doesn’t mean it has to be sh1tified.

        1. Sawdust

          No, I’m not opposed to Medicare or socialized medicine in general. My point is that recent events show an increase in the probability that our corporate-captured goverment will make our lives worse by promising us something good.

          1. Teri

            I fail to see your logic. Can you elaborate?

            What system could be worse than the current: everyone wildly overpaying for poor outcomes, people trapped in terrible jobs just to have access to some semblance of healthcare, and some foregoing treatment through insolvency altogether?

            The US system is the laughing stock of the developed world.

    3. CostcoPizza

      What’s the alternative for folks like me (us?) who absolutely abhor the current “healthcare” system, but are also skeptical of a giant state run system as well?

      1. howseth

        Let’s try it. See if your skepticism was warranted. What’s to lose?
        This new proposal seems so promising – and sane – that it has little chance to be passed.
        That’s where we’ve – I – have come to regarding policy and governance in the United States.

  3. Jeff N

    MMT says this would be better done at the federal level, but tell that to the California guy who needs medical care now.

    1. Left in Wisconsin

      I think for a big state like California, there isn’t the same degree of concern. The issue is that health care is expensive and in a gov’t unit that can’t print its own currency, a downturn that saw pressure on state (balanced budget) finances would put high-quality universal coverage at risk.

      But over a large population, there shouldn’t be much year-to-year fluctuation in cost (unlike, say, unemployment compensation or Medicaid today, in which costs are counter-cyclical precisely because people lose health insurance when they get laid off). So it would be more like the situation with public K-12 schooling, which is subject to some degree of budget pressure when finances are tight but is more or less protected by strong public backing. (Cue outrage over education funding cuts, which do occur from time-to-time but are often smaller-than-desired increases rather than outright cuts, and which at any rate are at least partly driven by out-of-control health care costs charged to the public sector.)

      In other words, the same argument could be made about K-12 education: It would be better to fund it nationally because the ability to deficit-spend would make it more immune to budget pressures. But most places have been able to make local/state financing for public schooling work and there is no reason to think that it couldn’t be the same for health care. The really devastating math is for state-level “public options” that would compete with private insurance. In that circumstance, the counter-cyclicality of demand for the public option really would be a big problem for a state-level program.

      So, no excuse for California not to get on with it.

      1. JBird4049

        What made the New Deal effective was the federal government did not tell whatever local government how to spend the money given to them. IIRC, here is X dollars for Y thing. Spend it the way you think it should be spent on Y. Simple. I think only some auditing was done so it was not spent on Oldsmobiles or pork futures.

        I do see a problem with using the same system today as some local governments have taken to using the money as a replacement, not a supplement. For schools or welfare for example. Tax cuts or special projects for important people are funded by removing the local funding.”

        Add to the insistence of either the Democratic Party’s managerial class to micromanaging ( It’s their jobs program) and the Republican Party of triple auditing everything because some poor person, not a rich one, might be getting away with something and the block funding of the New Deal is going to harder to do this time.

  4. Felix_47

    One can only hope. If they can establish utilization rules they could dramatically cut costs. Half of surgeries in the US are thought to be unnecessary. Even better put all the doctors on salary. Fee for service is the cost driver.

  5. Jeff W

    Given the headline of the piece, I was expecting—and would have preferred—a more “inside baseball” view of just how, exactly, California is “on the verge” of passing single-payer legislation, if it is, rather than simply an overview of the legislation, a recap of its advantages, and a description of the dishonest, tired old tactics of its critics like Los Angeles Times columnist George Skelton. Given the opposition of the usual suspects, e.g., obviously the insurance companies and the Chamber of of Commerce, but also that of Governor Gavin Newsom and some Democratic Assembly members, what are the chances of the legislation actually becoming law? How is this time politically more promising?

  6. ALM

    Single payer healthcare is never going to happen in California, at least not until hell freezes over and maybe not even then because Sacramento is awash in pharmaceutical and health insurer money. Despite the fact that California has super Democratic majorities in both houses of the state legislature, it was the Democratic Speaker of the Assembly who killed a single payer healthcare bill in 2017 after it had passed the state Senate. One year earlier, a modest effort to discipline drug prices (Proposition 61) failed due to aggressive, well funded opposition by Pharma and the deafening silence of Democratic leadership.

    As for California’s corrupt governor, Gavin Newsom, will never sign a single payer bill. He has been bought and paid for by Blue Shield and United Health (among other corporate interests deeply hostile to single payer) to the degree that they were both awarded non-transparent, no-bid, billion dollar contracts to perform public health services (testing, tracing, vaccine roll-out, etc.) during the pandemic which state government proved utterly incapable of delivering under Newsom’s grossly incompetent leadership.

    California is a liberal state but it is corporate Democrats who control state government, and they will never allow single payer healthcare to advance beyond performative gestures and empty rhetoric. It’s going to be incremental changes such as caps on insulin prices for the insured and nothing more.

    1. Jeff

      Most Californians don’t pay attention to anything in their state. They much prefer to yell about orange man bad. I’m not kidding. The vast majority of this state has it’s head up it’s ass. How else to explain any of the public policy failures over the last 15 years.

      The state has long been bought and paid for but the masses sure feel great about being woke. The cognitive dissonance is breathtaking.

  7. Anthony G Stegman

    Single payer health care in CA is already DOA. Sonali needs to provide an update. There are too many hoops to jump through, as well as powerful interests groups that are very effective at corrupting the state legislature and governor’s office. Lone wolf legislation such as that put forth by Ash Kalra have very little chance of becoming law.

  8. Rodger Mitchell

    California (or any state, county, or city) has to work around cost. Somewhere along the line, taxpayers will be charged.

    By contrast, the Monetarily Sovereign U.S. federal government does not need to worry about cost. (The dirty little secret of federal financing is that federal taxpayers don’t fund federal spending, and the federal government can’t run short of dollars.)

    So the federal government, which pays all its bills by creating new dollars ad hoc, could fund a Medicare for All program, covering everyone and everything, at no cost to anyone.

    The proponents of Medicare for All know this, but are afraid to mention it for fear the public won’t believe it. So we do without free, comprehensive healthcare because of the cowardice of our leaders and the ignorance of the public.

    There is a cost for cowardice and ignorance, and we are paying it.


    1. voislav

      What cost? You pay for health insurance now, except you are paying it to a private corporation rather than to the government. Would you continue to pay your private health insurance on top of the single payer government insurance? I don’t understand what is this cost that people keep talking about.

    2. JBird4049

      The plan for previous efforts was to make a deal with the federal government for all the money now spent on Medicare and Medi-Cal, which would fund most of the program. Any extra money would come out of premiums people would no longer be paying the insurers. Any increase in taxes would be less than the eliminated premiums. Anyways, California is supposed to be like the eighth largest economy on the planet. It has some resources that other states and countries do not have.

      1. drumlin woodchuckles

        if people started calling ‘premiums’ by the name ‘privataxes’, as in private taxes paid to private insurance companies, would the functional similarity of premiums to taxes be made clearer? And with CanadaCare for California, the govertaxes paid to the State would equal the privataxes no longer paid to the insurance companies.

  9. mario

    It’s a little too soon ti claim that “Californians… would remain with their current providers”; this is a mirror of the ACA claims and it did not work out that way.

    The bill also lacks any kind of cost controls to manage the crazy perk “medical care” that a lot of companies include like yoga, acupuncture, cryogenic treatments, chiropractors, …

  10. coboarts

    From water to… whatever, CA is magnificently corrupt and always has been. Quit being hopeful puppies, burn it all down – nah, it’ll all shake out anyway, then let’s see

  11. Del

    “free-of-charge health care to all residents, including immigrants”

    70% of America’s homeless have traveled to California, now to that we can add yet another inducement to the Western Hemisphere’s illegal “migrant” caravans, plus anyone who can afford a plane ticket to Mexico.

    1. Left in Wisconsin

      If it worked it California, it would soon be picked up by other states, making the unique appeal of CA transitory. If it didn’t work, no doubt it would be done away with ASAP. It’s also possible that providing free health care to the homeless (to the extent they do not currently have access to Medicaid) would be an important step toward reducing the size of the population.

      I’m curious to your source for the 70% figure. Politico says that CA is home to 28% of total US homeless of 580,000 and 51% of smaller group of 226,000 with no access to shelter, so something like 150,000, which seems like a small number compared to Cali population.

      1. JBird4049

        It probably is an undercount. San Francisco’s always seems to be. In fairness, the homeless are often hard to count being as they are often hard to find. Living deeply in Golden Gate Park or in the forest especially in the North Bay and nobody is going to find you. Also, more than a million people a year are homeless, but for many it is transitory. Live in a shelter or a vehicle for a few months, save some money, maybe get another job, and move into another apartment. Some regularly cycle in and out of homelessness.

  12. Phil in KC

    I think any state that adopts a single-payer system is going to look very attractive to many employers, who in exchange for a relatively modest tax increase would no longer have to subsidize employee medical, dental, vision, and mental health plans. My company subsidizes my health care to the tune of $8,000/year. With 2500 employees, we’re talking tens of millions in savings.

    I would be curious to know how much money California–or any one state–pays in toto for health insurance premiums and out of pocket in any given year. The I’d want to know how much health care is purchased and used during that year. The difference between the two would be the admin costs and the profit-takings. I imagine that such studies have been done, but I haven’t found any.

  13. Tom Stone

    Remember the birthday dinner at the French Laundry Governor Noisome attended?
    It was in honor of a dear friend who has supported Noisome from his start in politics.
    A lobbyist.
    For the healthcare industry.
    And who was seated on either side of our progressive Governor?
    Lobbyists for the health care industry.

    A snowball’s chance in Hell.

  14. Dunkey2830

    As an ‘educated’ MMT’er I am fully aware that M4A would be more effectively/efficiently supplied & financed by the currency issuing National (Fed.) govt.
    In reluctantly accepting that achievement of such optimum arrangement is likely impossible in such a thoroughly corrupt, corporatised, propagandised nation that is the US today I am encouraged by the $400bn current cost estimate.
    The estimates of $314bn to $391bn (or $9,775 per cap) for single payer Calcare appears to be on the high side if one takes guidance from actual cost per capita experienced by other nations with comparable single payer schemes.
    e.g. Some rough numbers – (all denominated in USD)
    Australia annual medicare budget (2020) = 69bn USD = $2,654 /capita;
    Malta annual medicare budget (2020) = 1.1bn USD = $2,750 /capita;
    England annual NHS budget 164 bn USD = $2448 /capita
    Germany & France spend approx $4,000 per capita.

    So, if Calcare achieved equivalent efficiency of Germany/France it would only cost around $160bn USD annually.
    There is hope – if sanity prevails !

  15. Mikeyjoe

    The LA Times writer opposed to single payer health care has the last name Skelton???
    Due The expense of expense of medical insurance in the US and the tragedy covis-19 is wreaking across the land, we’ll all be skeletons soon!

  16. Ep3

    But here’s problem number one. Say u have cancer, and there’s a specialized treatment that costs $40 million. The medicine takes 4 years to make. Then governor Arnold gets the same cancer. Due to the high cost of production, and rarity of the cancer, there is only enough medicine to treat one person. Who gets the medicine? Who decides who lives and dies? With insurance, the insurance companies can decide for us. If u don’t work hard & pay for the good insurance, then u don’t get the medicine. If ppl don’t have the incentive to work hard, then no one will. It’s not fair for a lazy person to get sick & get treatment while someone else works hard (which is code for having more money) doesn’t get treatment. Dick Cheney deserves to have multiple heart procedures. Some little kid in Detroit who breaks their leg, what have they done for the world? If everyone got the same treatment as Dick Cheney, then what makes Dick Cheney so special?
    Insurance helps to separate out different ppl into different classes. A doctor doesn’t have to decide who lives and dies. That question can be answered by some unknown entity on the other side of the world.
    I just want the govt out of my doctor/patient/insurance company relationship. By god, if the govt starts paying the bills, who will stop me from getting the insulin I need?

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