Single-Payer Plan Advances in California

The Left Coast let out a roar yesterday that managed to escape the attention of the national media.

The Democratic-controlled California Assembly passed a single-payer health care bill by a 45-33 margin. The “Health Care for All Californians Act” would scrap corporate-sponsored insurance plans, Medicare and Medi-
Cal (the state’s Medicaid program) and cover everyone under a single plan. Insurance companies could sell policies to individuals and/or firms if they wanted coverage over-and-above the statewide plan.

The bill had already passed the Senate last May, also in a party-line vote. The core financing of the plan rests on an expanded payroll tax. Employers who provide health care insurance would be relieved of nearly $50 billion in annual premiums for workers and their retirees. All employers would instead pay an expanded 8.17 payroll tax, which would raise about $56 billion, according to a Lewin Group analysis of the bill conducted last year.

Individuals would be relieved of all deductibles and co-payments under the program, which would provide coverage for medically appropriate hospital inpatient and outpatient care, emergency room visits, physicians services (including preventive care), prescription drugs, lab tests, mental and substance abuse treatment, eyeglasses and dental services, and home health and adult daycare for the aged and infirm. In exchange, workers would pay a 3.78 percent payroll tax (on top of their current Social Security and Medicare payroll deductions).

In its analysis, the Lewin Group estimated that the total health care spending would actually decline by about 4 percent despite providing more extensive services for the nearly 5 million Californians without health insurance. “An increase in health services utilization . . . would be more than offset by savings due to administrative simplifications and bulk purchasing of prescription drugs and medical equipment,” the report said.