Single-payer health care bill introduced in California Senate

Legislation introduced in the state Senate Friday would set California on a path toward the possible creation of a single-payer health care system ― a proposal that has failed to gain traction here in the past.

The bill, which is a preliminary step, says that it is the “intent of the Legislature” to enact a law that would establish a comprehensive, single-payer health care program for the benefit of everyone in the state. The legislation, introduced by state Sens. Ricardo Lara (D-Bell Gardens) and Toni Atkins (D-San Diego) does not offer specifics of what the plan would look like, nor does it mention a timetable.

A single-payer system would replace private insurance with a government plan that pays for coverage for everyone. Proponents argue that single-payer systems make health care more affordable and efficient, but opponents say they raise taxpayer costs and give government too much power.

Medicare, the federally-funded health coverage for the elderly, is often held up as a model of what a single-payer system might look like.

The U.S. Centers for Disease Control and Prevention reported that California’s uninsured rate dropped from 17 percent in 2013 to 7.1 percent in 2016, a record low for the state. The national uninsured rate is at an all-time low of 8.8 percent, down from 14.4 percent in 2013.

“In light of threats to the Affordable Care Act,” Atkins said in a prepared statement, “it’s important that we are looking at all options to continue to expand and maintain access to health care. The Healthy California Act is an essential part of that conversation.”

Lara said in an interview Thursday that the state needs to be prepared in case the Affordable Care Act is repealed, as President Donald Trump and Congressional Republicans have promised.

“The health of Californians is really at stake here and is at risk with what is being threatened in Congress,” Lara said, as the debate continued in Washington about the future of President Barack Obama’s signature health law. “We don’t have the luxury to wait and see what they are going to do and what the plan is,”

Lara noted that while the Affordable Care Act expanded health coverage for many Californians, it left others uninsured or underinsured. He said the single-payer bill builds upon his “health for all kids” legislation, which resulted in coverage beginning last May for 170,000 immigrant children here illegally.

“I’ve met many children who have asked me point blank, ‘What about my mom? What about my dad?’” Lara said.

He recently withdrew a request to the federal government, based on a bill he had introduced, that would have allowed adult immigrants here illegally to purchase unsubsidized health plans through Covered California, the state’s insurance exchange.

According to the text of the Lara’s bill, a single-payer system would help address rising out-of-pocket costs and shrinking networks of doctors.

No state has a single-payer health system. Perhaps the best-known effort to create one was in Vermont, but it failed in 2014 after the state couldn’t figure out how to finance it. Last year, Colorado residents rejected a ballot measure that would have used payroll taxes to fund a near universal coverage system.

In California, voters rejected a ballot initiative in 1994 that would have established a government-run universal health program. Gov. Arnold Schwarzenegger later vetoed two bills that would have accomplished the same goal.

It’s difficult to create consensus on single-payer plans because they dramatically shift how health care is delivered and paid for, said Larry Levitt, a senior vice president at the Kaiser Family Foundation (California Healthline is produced by Kaiser Health News, an editorially-independent program of the foundation.)

“Single-payer plans have lots of appeal in their simplicity and ability to control costs,” Levitt said. “But what I think has always held back a move to single-payer is the disruption they create in financing and delivery of care.”

The problem, Levitt said, is that even if they end up costing less overall, single-payer plans look to the public like a “very big tax increase.”

The California Nurses Association, the primary sponsor of the new bill, is planning a rally in Sacramento next week in support of a single-payer system. Bonnie Castillo, the group’s associate executive director, said the goal is to create a system that doesn’t exclude anyone and helps relieve patients’ financial burdens.

“Patients and their families are suffering as a result of having very high co-pay and premium costs,” she said. “They are having to make gut-wrenching decisions whether they go to the doctor or they stick it out and see if they get better on their own.”

Castillo said that with so much uncertainty at the national level, California has the ability to create a better system. “We think we can get this right,” she said.

Charles Bacchi, president and CEO of the California Association of Health Plans, said he hadn’t yet seen the bill, but the trade group has opposed single-payer proposals in the past.

“It’s hard to tell until you know the details,” Bacchi said. “But past studies have shown [single-payer systems] are incredibly expensive and would be disruptive.”

He said health plans, doctors, hospitals and others are “laser-focused on protecting and enhancing the gains we have made in coverage” under the Affordable Care Act and ensuring that California continues to receive critical funding. “We think that’s where the focus should be,” he said.

Sen. Toni Atkins (D-San Diego)

One possible concept of a single-payer system in California would be to bring together funding from several sources under one state umbrella: Medi-Cal, which covers the poor; Medicare, the federal program that covers older adults, and private insurance.

Lara said he has not yet figured out the financing, saying that it is still early in the legislative process. But he said that even as California continues to defend the Affordable Care Act, it is time to put forward an alternative.

“I think we’ve reached a tipping point now that we haven’t had before,” he said.

Late Thursday night, a spokesman for Gov. Jerry Brown declined to comment on the pending legislation.

One big issue is that the state relies on about $22 billion in federal funding annually to cover private insurance subsidies linked to plans purchased through the state’s health insurance exchange. It also pays for a provision of the law that greatly expanded Medicaid — a health care program for the poor (called Medi-Cal in this state) that is paid for by states and  the federal government — to include adults without dependent children. What would happen to those funds is unclear.

But Brown, who decades ago supported switching to a single-payer system, may be able to lean on public opinion for support for a single-payer system.

A Pew Research report last month showed that 60 percent of Americans — up from 51 percent last year — say the government should be responsible for ensuring health care coverage for all Americans, compared with 38 percent who say it should not be the government’s responsibility.

The belief that the government should shoulder that responsibility has particularly spiked among low- and middle-income Republicans, the report said.

A woman has her blood drawn at a free clinic for the uninsured held April 27, 2016 at the Los Angeles Convention Center/FREDERIC J. BROWN/AFP

Currently, the Pew researchers found, 52 percent of Republicans with family incomes below $30,000 say the federal government has a responsibility to ensure health coverage for all, up from 31 percent last year.

Making the switch to a single-payer system would involve countless moving parts, from negotiating with doctors and hospitals to making major changes in the tax code, said Lawrence Baker, a professor of health research and policy at Stanford.

“While there are certainly ways that single-payer plans can be successful,” Baker said, “there would be lots of things that would have to be worked out.”

Used by permission, this story was produced by Kaiser Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation. For more, visit California Healthline.