SB-562, The Healthy California Act
California Legislature, Amended in Senate March 29, 2017
This bill, the Healthy California Act, would create the Healthy California program to provide comprehensive universal single-payer health care coverage and a health care cost control system for the benefit of all residents of the state. The bill, among other things, would provide that the program cover a wide range of medical benefits and other services and would incorporate the health care benefits and standards of other existing federal and state provisions, including, but not limited to, the state’s Children’s Health Insurance Program (CHIP), Medi-Cal, ancillary health care or social services covered by regional centers for persons with developmental disabilities, Knox-Keene, and the federal Medicare program. The bill would require the board to seek all necessary waivers, approval, and agreements to allow various existing federal health care payments to be paid to the Healthy California program, which would then assume responsibility for all benefits and services previously paid for with those funds.
The bill would state the intent of the Legislature to enact legislation that would develop a revenue plan, taking into consideration anticipated federal revenue available for the Healthy California program. The bill would create the Healthy California Trust Fund in the State Treasury, as a continuously appropriated fund, consisting of any federal and state moneys received for the purposes of the act.
Sec. 1 (b)
(2) It is the intent of the Legislature for the state to work to obtain waivers and other approvals relating to Medi-Cal, the state’s Children’s Health Insurance Program, Medicare, the PPACA, and any other federal programs so that any federal funds and other subsidies that would otherwise be paid to the State of California, Californians, and health care providers would be paid by the federal government to the State of California and deposited in the Healthy California Trust Fund.
(3) Under those waivers and approvals, those funds would be used for health coverage that provides health benefits equal to or exceeded by those programs as well as other program modifications, including elimination of cost sharing and insurance premiums.
Sec. 2 TITLE 22.2. The Healthy California Act
Chapter 7. Funding
Article 1. Federal Health Programs and Funding
(1) The board shall apply to the United States Secretary of Health and Human Services or other appropriate federal official for all waivers of requirements, and make other arrangements, under Medicare, any federally matched public health program, the Affordable Care Act, and any other federal programs that provide federal funds for payment for health care services that are necessary to enable all Healthy California members to receive all benefits under the program through the program, to enable the state to implement this title, and to allow the state to receive and deposit all federal payments under those programs, including funds that may be provided in lieu of premium tax credits, cost-sharing subsidies, and small business tax credits, in the State Treasury to the credit of the Healthy California Trust Fund, created pursuant to Section 100655, and to use those funds for the program and other provisions under this title.
(2) To the fullest extent possible, the board shall negotiate arrangements with the federal government to ensure that federal payments are paid to Healthy California in place of federal funding of, or tax benefits for, federally matched public health programs or federal health programs.
Article 2. The Healthy California Trust Fund
100655. (a) The Healthy California Trust Fund is hereby created in the State Treasury for the purposes of this title.
Article 3. Healthy California Financing
100657. (a) It is the intent of the Legislature to enact legislation that would develop a revenue plan, taking into consideration anticipated federal revenue available for the program. In developing the revenue plan, it is the intent of the Legislature to consult with appropriate officials and stakeholders.
By Don McCanne, M.D.
Now we have the full text of California’s new single payer bill – SB 562. It calls for comprehensive health care coverage for all residents of California with no premium, copayment, coinsurance, deductible, nor any other form of cost sharing, for all covered benefits. “Resident” means an individual whose primary place of abode is in the state, without regard to the individual’s immigration status. It’s the real thing.
Last week, Gov. Jerry Brown seemed to dismiss the idea of a single payer system with this response to reporters, “Where do you get the extra money? This is the whole question.”
Of course, the money is already there and being spent on health care. Current government and private spending combined is enough to pay for a comprehensive system for all residents wherein the administrative savings and other efficiencies frees up enough funds to pay for those currently uninsured and underinsured.
There are two issues that may have prompted the governor’s response: transferring current federal health care funds to the state, and establishing a state tax system to replace current private spending.
The excerpts from SB 562 posted above indicate that it is the “intent” to obtain “waivers and other approvals” that would enable the federal government to transfer to the state funds from Medicare, Medicaid, Chip, ACA, and other federal programs. The problem is that current waiver programs are inadequate to fully accomplish that, and new federal legislation would be required. Considering the composition of the current Congress, that could be a difficult task (a comment that does not require a mastery of understatement).
Health care spending through the private sector is relatively inefficient compared to spending in government programs such as Medicare. Yet when the taxes that would replace private spending are spelled out specifically, they seem overwhelming to the average individual with an aversion to taxes in general. It is difficult for them to see what they are already paying for our health care system that is not particularly transparent such as the component of employer-sponsored health plans that are only nominally paid by the employer, the tremendous tax expenditures for employer-sponsored plans that go disproportionately to higher income individuals, the huge spending for government employee health plans on the federal, state, and local level, and the costs of health care built into the prices of services and products to pay for employee coverage, worker’s comp, liability coverage, and the like. When that spending goes away and is replaced by government spending, the taxes to pay for that can look formidable. Just ask former Gov. Peter Shumlin of Vermont. Then try to sell that to the residents of California. When you try to explain to them that the tax system would be more equitable and efficient, and most would actually pay less overall, they are already blinded by the proposed tax increases that they do see (but are not yet spelled out in SB 562).
What we need is a well designed, national single payer health program. We should continue to pull all stops toward that goal, though it is difficult to see when we will reach the political threshold that will make that possible. Until then we should also support state efforts to relieve the physical suffering and financial hardship that is being wrought on our people by our dysfunctional health care financing system.
Thus we should strongly support SB 562. We should make every effort to obtain “waivers and other approvals,” as difficult as that will be. We should increase our efforts to educate the public on what a really good deal this would be for them, otherwise our efforts could be sunk by a few soundbites from the industries that profit excessively from our sick system (as they were in prior ballot measures in California, Oregon and Colorado).
But while we do this, we cannot let up the least in our advocacy for a national health program. Our brothers and sisters in other states desperately need our help.