California’s single-payer health care proposal is a disaster

OCRegister Lifestyle 6 months ago

Senate Bill 562, the single-payer health care proposal passed by the California state Senate in the summer of 2017, and never heard by the California Assembly, is a recipe for the collapse of health care in California. The scheme would produce deficits that could make the unfunded governmental pension liabilities look like child’s play.

The California Nurses Association drafted the bill as well as commissioning the economic analysis, which has had no independent review. The two California Senate Committee hearings on SB562 were not serious attempts to understand the proposed legislation.

Now, the nurses’ association is attempting to resurrect SB562 by attacking the insurance industry as well as Assembly Speaker Anthony Rendon, D-Lakewood, who referred to the proposal as “woefully incomplete” and former Los Angeles Mayor Antonio Villaraigosa, who said SB562 would “take everybody off Medicare.” Both Rendon and Villaraigosa were absolutely correct in their comments against the proposal.

SB562 adds a minimum of 2.7 million citizens and undocumented California residents to the number of currently insured Californians and projects health care costs in the state would be reduced by 18 percent. It effectively eliminates oversight over health care usage and provides for many new services to be delivered under Healthy California that are not currently provided without limitation by current medical insurance. There is a greater chance SB562 will make health care cost 18 percent more rather than 18 percent less for Californians.

Neither California Senate committee inquired into the ability of California to implement SB562. SB562 would be the largest start-up business in the history of the planet.

SB562 does not consider or discuss start-up timing or costs (which could be so long as a decade and easily cost tens of billions of dollars), necessary reserves at day one (perhaps $50 billion), issues about health insurance in California during the period it takes California to develop and implement long-term capital improvements or medical personnel shortages, the loss of perhaps nearly 400,000 jobs in the insurance industry, the loss of local control of any aspect of the health care system, the costs of what is referred to as care coordinators, or many other issues.

Neither the Senate Health Committee nor the Appropriations Committee delved into Kaiser Permanente’s presentation that as the insurer of 20 percent of Californians that they would be unable to continue to provide health care services under SB562.

The economic plan needs an independent review as it appears to be very, very optimistic in many areas and may not correctly interpret a key UCLA study on funds actually spent by the federal government.

After reviewing these issues with the proposal, Rendon did misstate one thin: SB562 isn’t just woefully incomplete. It’s actually very, very woefully incomplete. Villaraigosa is correct when he says that California Medicare recipients would be taken off Medicare and included in the new California health care system. And indeed their federal protections would be lost. What Villaraigosa did not mention is that in a statewide “free” health care system, only Medicare recipients would be required to pay for a portion of their medical care. SB562 says “as a condition of continued eligibility for health care services under the program, a member who is eligible for benefits under Medicare shall enroll in Medicare, including Parts A, B and D.” (There is an exception for low-income benchmark Medicare recipients.) So, actually, SB562 is worse for Medicare than reported by Villaraigosa.

Finally, does anyone really believe that the federal government would even consider working with California to facilitate a single-payer system? Isn’t California the state that provides no cooperation to the federal government on virtually anything emanating from the Trump administration?

Hank Adler is associate professor in the George Argyros School of Business & Economics at Chapman University.

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