California’s Single-Payer Healthcare Insurance Proposal (Senate Bill 562)
Single-Payer Healthcare Insurance — known to many as “Medicare for All” — continues to be debated in the California Legislature. State Senate Bill 562, now pending, would initiate a massive change in how healthcare insurance works in California, a state that rivals France in size and complexity. It’s important to remember that while the Single-Payer legislation now pending before the State Legislature is complicated, its central aim is to dramatically change the way healthcare insurance is financed and delivered. Presumably, there would be minimal change in how medical care, itself, is provided.
Paying for Single-Payer Healthcare Insurance
A great debate has begun in California: How to pay for an efficient Single-Payer Healthcare Insurance system.
Single-Payer Healthcare Insurance would effectively eliminate private healthcare insurance companies and their costly premiums; reduce administrative costs; capture these billions of dollars in profits and savings to improve healthcare insurance for everyone; and, insure the currently uninsured in California.
A University of Massachusetts-Amherst study, Economic Analysis of the Healthy California Single-Payer Health Care Proposal (SB-562),* proposes to replace the healthcare insurance premiums paid by employers and individuals (either through their employer, Covered California, or privately), with two statewide compensating taxes: 1) a 2.3% sales tax would be paid by everyone, with exemptions for housing, utilities and food; and, 2) a 2.3% gross-receipts tax would be paid by all businesses, exempting the first $2 million in receipts. Further, to fully offset the additional sales tax for lower-income families insured through Medi-Cal, there would be a 2% State income tax credit.
The result of that study’s proposed tax rates is that most people and most companies would pay less for healthcare insurance than they are currently paying. In fact, for individuals, only the wealthy would be paying more. And the level of care everyone receives would be at least as good as what they’re receiving, now.
It’s expected that healthcare experiences under this new system would be similar to those of Medicare. My own experience as a Medicare beneficiary has been great. I’ve never been denied any medical service, and I’ve never run into a provider who didn’t accept Medicare. I doubt many would object to such a system if it could be applied to everyone, which is what SB 562 seeks to do.
The current system of healthcare insurance — with each business or organizational group negotiating with an insurance company to provide widely varying levels of service — is chaotic. Compare this with a universal single-payer system designed to apply uniformly to everyone, so everyone is insured, and everyone receives the same high level of services.
The total amount currently being spent in California for healthcare services is $368.5 billion.* Nonetheless, 2.7 million people in California are uninsured, and 12 million people have policies with high deductibles and/or excessive co-payments.
What the U. Mass-Amherst study* doesn’t cover is what happens to the healthcare insurance companies and their employees — a very important consideration. Clearly, they will be severely impacted, since their current mode of operation would be mostly replaced. These businesses could be re-invented to provide services required for a single-payer system, or could be purchased by the State and rolled into an agency to become something like the Federal Centers for Medicare & Medicaid Services.
A single-payer system is also intended to advance social justice by providing everyone with health insurance regardless of their state of health or ability to pay. However, there are some who are opposed to providing healthcare insurance to those who can’t afford it, or to those who have pre-existing conditions, or who are deemed to have self-inflicted medical ailments.
Nonetheless, just as everyone is entitled to a “free and equal” K-12 education in California, Single-Payer healthcare insurance could be considered a similarly important basic public benefit — a protected right.
Providing healthcare insurance for all in California is fraught with many problems, some of which will remain unsolvable, just as in our current system. However, to have a rational discussion it is essential to separate facts from philosophy, personal beliefs, anecdotal horror stories, rampant propaganda and political funding from the healthcare insurance industry and others.
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* Economic Analysis of The Healthy California Single-Payer Health Care Proposal (SB 562), May 2017, by Pollin, et al, Department of Economics and Political Economy Research Institute (PERI), University of Massachusetts, Amherst
At now 75, I have a decade of Medicare behind me; thank you very much. “For all” sounds excellent. Profit has no legitimacy in health care.
— Pam Reagor
Absolutely not! Government control over our health care means loss of freedom.
— Mel Creighton
I had an opportunity to visit and work in Canada and Singapore in the last couple of years. After talking with the citizens there and seeing the healthcare system in action first hand and comparing it with our healthcare “mess,” I am convinced that single-payer is the way to go. Hope we get there soon.
— [Name withheld upon request]
I have lived in Germany and the UK, and have seen first-hand the poor healthcare and mismanagement of public funds towards single-payer healthcare. This is something that the USA DOES NOT need!
— Trenton Wozniak
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