California’s Proposed Single Payer Health Plan: Questions That Our Lawmakers Need to Answer

Patrick Casinelli, RHU, REBC, CHRS
Patrick Casinelli - resized Adopting a “single-payer” system means the State of California would run and regulate the healthcare of the state’s residents using taxpayer money. The cost estimate for this plan is between $330 and $400 billion per year. To put it in perspective, California’s entire annual state spending budget is $190 billion. This additional money has to come from somewhere.

The plan to fund the bill is to repurpose $200-$225 billion of existing Medicare (this would require a Federal waiver) and Medi-Cal funds. The other $105-$200 billion would come from new tax revenue.  Proposed new taxes are a 15% increase in payroll tax and/or 2.3% gross receipts tax on businesses plus additional 2.3% sales tax increase.

The single payer bill (dubbed the “Healthy California Act”) is proposed by State Senators Ricardo Lara (D-Bell Gardens) and Toni Atkins (D-San Diego). Governor Brown has not been keen to the idea of single payer, but Lieutenant Governor (and front runner to replace Gov. Brown) Gavin Newsom is very much in favor of a single-payer plan.

What Does the “Healthy California Act” Look Like?

Simply put, the State of California would cover all costs for its residents’ healthcare. Effectively, the government would step into the role that insurance companies play now, paying for all “medically necessary” care. Whether you’re insured through an employer, through Covered California or on public programs such as Medicare and Medi-Cal, if you’ve established California residency — regardless of legal immigration status — you would be enrolled in the one and only plan available.  As proposed in the “Healthy California Act”, employer-provided and outside commercial options would be illegal and not allowed.

The plan would have no premiums, no deductibles, no copays and zero out of pocket costs for any “medically necessary” care.  The benefits would include all inpatient and outpatient care, dental and vision care, mental health and substance abuse treatment, and prescription drugs. Patients would be able to see any healthcare provider of their choosing.

Reality Check: Questions That Must Be Answered

  • What will the future cost of this “free” healthcare be to California?
  • How long do you have to be an established resident to receive free care?
  • Who determines “medical necessity”?
  • Who approves care and treatment plans?
  • Will the best doctors want to practice in the State of California?
  • How will doctors and hospitals be paid?
  • Who will determine the allowed amount to be paid for care?
  • Will doctors and hospitals be rewarded for quality care?
  • Will the plan incentivize and promote wellness?
  • Would all public employees be required to be on the “Healthy California Act”?
  • Will there be any waivers for unions or large multi-state employers?
  •  Who will oversee the “Healthy California Act”?

Closing Thoughts

Quality of care and access to great doctors will greatly diminish in a single-payer system. I cannot see the best doctors in the United States wanting to work for the State of California, or hospitals investing in the best technology or quality care systems when the return on investment is unachievable.  Wait times for surgeries will likely increase to ten times what they are now, similar to other countries who have adopted this system.  Corners will be cut, quality will suffer, and the patient advocates will be the same people that implemented the single payer plan in the first place.

Single-payer is not the answer for California.

My next blog will discuss how we fix our current healthcare system. We do not need to “throw the baby out with the bath water.”  We can fix and eliminate what is wrong with our current system, while keeping and improving all that is great.