A proposal considered by California lawmakers would substantially remake the health care system by eliminating insurance companies and guaranteeing coverage for everyone.
After more than two hours of debate, the Senate Health Committee cleared the State’s latest attempt at adopting universal health care despite key concerns as to how the system will be paid for.
Senate Bill 562 passed the Senate Health Committee 5-1. It now advances to the Senate Appropriations Committee to face tough questions about how Californians would fund a single-payer health care system.
The legislation would create a single-payer health care system, provide health insurance to all California residents regardless of immigration status and allow state regulators to negotiate drug costs with the pharmaceutical industry. Under SB 562, every one of the 39 million residents would be eligible to receive all covered benefits without deductibles or co-payments. Users would be able to choose from any provider signed up for the government-run system.
The program would be managed by a 9-member board appointed by the Legislature and governor, as well as a 22-member public advisory committee. The board would be tasked with securing providers, negotiating reimbursement prices and establishing standards for “safe, therapeutic care for all residents of the state.”
Currently, 56 percent of Californians obtain health care through their employer, while 39 percent are enrolled in some form of Medi-Cal or Medicare. The cost of California’s health care is staggering: in 2016, health care expenditures totaled more than $367 billion.
Critics say the plan is a “job-killer” and have questioned the timing of transforming the state’s health care system with Congress also plotting large-scale health care reforms.
“It’s an inherently flawed system lacking competition and important cost-containment mechanisms which will result in lower quality and higher cost health care for all Californians,” testified Karen Sarkissian of the California Chamber of Commerce. “It should be called Medi-Cal for all.”
The health insurance sector has predictably lined up against the bill, including Anthem Blue Cross, Kaiser Permanente and Blue Shield of California.
Gov. Brown also expressed skepticism last month about how the single-payer system would be funded and implemented.
Supporters will need to figure out how to comply with California’s Proposition 98 if they want to raise taxes to pay for universal health care. Proposition 98 requires 40 percent of revenues from new taxes to go to education. They will also have to attain a federal waiver in order to receive federal health care support. Lara said if the waiver is denied, he has identified other ways around the denial – including a potential lawsuit.
No state currently has a single-payer system, but California lawmakers have been kicking around the idea for decades. Voters rejected a universal health care initiative in 1994 and five separate bills have been proposed since 2003, including a 2007 effort vetoed by Arnold Schwarzenegger.