California Can Look Forward to Socialized Medicine If Single-Payer Returns


It’s been five years since California Democrats tried and failed to bring socialized medicine to the Golden State. But with the new year comes a renewed attempt to abolish private health insurance and force all of the state’s 39 million residents into a new government-run plan.

AB 1400 passed the state Assembly’s Health Committee earlier this week.

The bill would install a single-payer healthcare system called CalCare, in California. The full Assembly must approve the bill by January 31 to keep it alive.

To pay for CalCare, lawmakers hope that voters will approve an amendment to the state constitution that will allow them to impose unprecedented tax hikes on businesses and individuals.

As evidence from other countries shows, single-payer invariably leads to rationing, subpar care, physician shortages, and unnecessary suffering often caused by the long waits endemic to government-sponsored care.

And yet, this new legislative push actually stands a chance of succeeding

The landscape is different now than it was the last time Democrats made a run at single-payer.

For one thing, Gavin Newsom was elected governor in 2018. He came to office championing single-payer. In 2019, he launched the Healthy California for All Commission, a collection of experts tasked with exploring new healthcare financing systems, “including, but not limited to a single payer financing system.”

Perhaps more importantly, he survived last year’s recall attempt thanks in part to the support of the California Nurses Association, a powerful union and one of the state’s most strident proponents of socialized medicine.

The nurses no doubt expect Newsom to return the favor by backing their latest bid for single payer.

The election of Joe Biden to the White House — and his appointment of former California Attorney General and longtime single-payer supporter Xavier Becerra as Secretary of Health and Human Services (HHS) — also bodes well for California Democrats.

The Department of Health and Human Services would have to approve waivers to allow California to use federal healthcare dollars from the likes of Medicare and Medicaid to help fund the plan.

Becerra might do so; his predecessors in the Trump administration never would have in 2017.

Finally, Democrats for the first time have detailed how they intend to pay for their plan.

Their funding proposal would effectively double the state’s tax burden. It would levy a new 2.3% tax on all businesses after the first $2 million in gross receipts. It would saddle businesses with 50 or more employees with a new 1.25% payroll tax.

Workers earning more than $49,900 would face higher payroll taxes of their own. And it would raise marginal income tax rates by as much as 2.5%.

All told, the Democrats’ single-payer financing plan would increase taxes by $163 billion, according to the California Taxpayers Association. That’s the largest tax increase in the state’s history.

And by making it more expensive to do business, hire workers or simply live in the Golden State, it is certain to have a crippling effect on California’s economy.

But the financial cost of a statewide single-payer system is just one of the reasons to fear such an overhaul. By putting the government in charge of financing the provision of medical care, lawmakers are guaranteeing a future in which disruptions in healthcare access are endemic, wait times excessive and resources forever stretched thin.

That’s precisely what has happened everywhere socialized medicine has been tried.

For example, in my native Canada, patients wait a median of nearly 26 weeks for treatment from a specialist following referral by a general practitioner; this is according to the Fraser Institute, a Vancouver-based think tank.

In the United Kingdom’s government-dominated system, lengthy delays for treatment are similarly common. Recently leaked documents reveal that hundreds of patients waited 12 hours or more for transfers from emergency rooms in England during the first week of 2022.

This is the kind of healthcare rationing California patients have to look forward to if Democrats bring single payer to the Golden State.

Sally C. Pipes is president, CEO, and the Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute. Her latest book is “False Premise, False Promise: The Disastrous Reality of Medicare for All,” (Encounter Books 2020). Follow her on Twitter @sallypipes. Read Sally Pipes’ Reports — More Here.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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