On Jan. 27, California Gov. Gavin Newsom’s new commission exploring the viability of bringing government-run, single-payer health care to the Golden State met for the first time.
As a California-based health care scholar who’s studied single-payer for more than 30 years, I hoped Newsom would ask me to join the business leaders, medical professionals and health policy experts on the commission. But my invite never came. Perhaps that’s because Newsom wouldn’t like what I’d have to say. Implementing single-payer in California is not only financially impossible – it would diminish the quality of care for patients.
California has flirted with single-payer for years. In 2017, the state Senate passed the Healthy California Act, which would have dumped virtually every Californian into a single, state-run health insurance program. Like the “Medicare-for-all” plan championed by the likes of Sens. Bernie Sanders, I-Vt., and Elizabeth Warren, D-Mass., at the national level, the Healthy California Act would have basically outlawed private insurance and made care free at the point of service.
Newsom endorsed the bill during his gubernatorial campaign, as did the California Nurses Association, one of the state’s most powerful labor unions. Despite this support, California Assembly Speaker Anthony Rendon shelved the bill in 2017, calling it “woefully incomplete.”
The bill was a disaster waiting to happen. A report commissioned by the Assembly determined it would have cost $400 billion a year – double the state’s annual budget. Analysts said half that funding would come from existing programs. Advocates proposed generating the remaining $200 billion with a 15 percent payroll tax.
A study funded by the California Nurses Association claimed that single-payer would only cost $331 billion. In that case, the state would still need to find an additional $106 billion. The report suggested generating those funds by adding a 2.3 percent sales tax on top of California’s existing 7.25 percent sales tax.
Taxes like these aren’t popular, even in famously liberal California. According to 2017 polling from the Public Policy Institute of California, support for single-payer dropped from 65 percent to 42 percent after people learned they’d have to pay new taxes.
Californians will like single-payer even less after they consider the devastation it’s wrought in other countries. Consider the experiences of British patients living under the government-run National Health Service. Some patients are denied care because they’re overweight. Some clinics won’t remove cataracts until the patient has reached a certain level of blindness.
Governments don’t have unlimited resources. They have to make decisions about whose care to pay for and who has to wait in line.
The state can scarcely afford the expansions of public health coverage the Newsom administration has already green-lit. At the governor’s urging, the state recently expanded the state’s Medicaid program, dubbed Medi-Cal, to cover low-income, undocumented immigrants up to age 26. Official estimates peg the cost of this expansion at $98 million in its first year. On Jan. 10, the governor proposed further expanding Medi-Cal to cover around 27,000 undocumented seniors at a cost of over $80 million.
Expansions like this will galvanize progressives who have called for Medi-Cal to cover all undocumented immigrants. Doing so would cost $3 billion a year, according to the State Assembly’s Appropriations Committee.
Newsom’s Healthy California for All Commission will release its preliminary report on the state of coverage in California in July 2020 – and its final verdict on how to implement single-payer in February 2021. They shouldn’t need a year, much less six months, to determine that a government takeover of California’s healthcare system would be ruinous for the state’s finances and patients.
Sally C. Pipes is president, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is “The False Promise of Single-Payer Health Care” (Encounter 2018). Follow her on Twitter @sallypipes.