Last week’s decision by the California Senate to approve a single-payer health care bill (SB 562) was ridiculed by our local daily newspaper, which editorialized on June 6 that “Single-payer health vote just a political stunt.” The editorial concluded SB 562 “is a glorified political stunt which, if it proceeds with the same thoughtlessness shown to date, could do real harm to the state of California.”
That’s a bit insulting to Mark Stone, our local Assembly member who is co-sponsoring SB 562, and to Bill Monning, our local Senator who voted in favor. Furthermore, it’s contrary to the only comprehensive economic analysis of SB 562 available so far, the 82-page economic analysis by Robert Pollin, cistinguished professor of economics at University of Massachusetts/Amherst, who was economic spokesperson in Jerry Brown’s 1992 campaign for U.S. President. Pollin’s analysis concludes “establishment of the Healthy California single-payer system [SB 562] will generate financial benefits for both families and businesses at all levels of the California economy.”
The editorial argues the approval vote “was a proposal lacking crucial details without which a responsible vote in favor is impossible.” That’s correct on the minor point that SB 562 does not lay out the specific tax structure it would establish nor does it offer supporting calculations about how that structure would fund its implementation. However, the major point is that SB 562 commits California to a single-payer system that will provide coverage to all Californians at a lower total cost than what we pay now. Pollin’s study explains specifically how SB 562 would reduce California’s total health care costs while expanding coverage (9% increase in costs to cover uninsured and underinsured, 19% reduction in health care costs due to a variety of savings measures such as lower cost prescription drugs by negotiating directly with Rx companies) equals 10% net savings.
Thus, SB 562 meets the financial test (we would get more for less) and the moral test (we would cover all of California’s citizens regardless of income). Moreover, the exact funding structure must be established before the system becomes operational (SB 562 states it will not become operative until the secretary of California Health and Human Services certifies there is revenue to fund costs of implementation).
The major point is that health care costs would go down by 10% even after moving to universal coverage; the minor point is that the exact details of the funding mechanism have not been determined at this stage.
The editorial also argues SB 562 should be voted down because it will raise taxes. However, the issue is total health care costs, not labels for how these costs are paid. California businesses and citizens currently pay roughly $200 billion per year for health care. They pay this through something called “premiums” and “out of pocket costs,” and in return for these payments they cover 90% of the state’s population. Under SB 562, California businesses and citizens will pay less than what they pay now through something called a “tax” and for this they will get 100% of the state’s population covered. In other words, Californians will get more for less because we can either pay something called a “premium”’ and “out of pocket,” or we can pay something called a “tax.”’ The important point is not what you call it; what’s important is how much you pay and what you get for that.
The editorial overlooks some of SB 562’s honest-to-goodness problems. For example, before SB 562 becomes operational, it must still must be approved by the California Assembly and, eventually, by Governor Brown and ultimately by the voters, because it would need to be exempted from spending limits and budget formulas in the state Constitution. Additionally, the Trump administration would need to allow federal funding currently directed to Medicaid, Medicare and Obamacare (among others) to be re directed in California. Significant transitional issues will occur as California moves to this new system, and details about deductibles, copays and similar cost sharing measures must be worked out, as must the final payment/contribution structure for businesses and individuals, plus near-term health costs are likely to surge as the uninsured and under insured immediately receive care they have delayed.
However, those real problems are minor points compared to the major point that by passing SB 562, California will commit itself to a path where it receives more for less. The editorial’s concerns are akin to objecting to JFK’s first call for the U.S. to put a man on the moon by saying “that is just a political stunt, he has not even figured out how phase three, sub procedure six of the re entry procedure will work.” It is true that phase three, sub point six had not been worked out at that time, but that was a minor point that paled in comparison to the major point of whether the U.S. should commit to send a man to the moon.
I am not proposing we send a man to the moon; I am proposing Partisan readers not be fooled by one-liners and take seriously that SB 562 is California’s chance to provide health coverage to all Californians at a lower total cost than what we pay now.
Jane Haines is a retired lawyer who lives in Pacific Grove. She has previously written for the Partisan on housing issues and development issues.