While Washington Fiddles, California Leaders Forge Ideas for Universal Health Care

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As the nation’s Republican leaders huddle to reconsider their plans to “repeal and replace” the nation’s health law, advocates for universal health coverage press on in California, armed with renewed political will and a new set of proposals.

Organized labor and two lawmakers are leading the charge for a single, government-financed program for everyone in the state. Another legislator wants to create a commission that would weigh the best options for a system to cover everyone. And Democratic Lt. Gov. Gavin Newsom, who hopes to become the next governor, has suggested building on employer-based health care to plug holes in existing coverage.

The proposals are fueled both by a fear of losing gains under the Affordable Care Act and a sense that the law doesn’t go far enough toward covering everyone and cutting costs.

But heath policy experts say that creating any type of universal health plan would face enormous political and fiscal challenges — and that if it happens at all, it could take years.

“There are different ways to get there,” says Jonathan Oberlander, professor of social medicine and health policy at the University of North Carolina. “None of them is easy.”


The most specific California proposal comes from state Sens. Ricardo Lara (D-Bell Gardens) and Toni Atkins (D-San Diego), co-authors of legislation that would take steps toward creating one publicly financed “single-payer” program.

The bill, co-sponsored by the California Nurses Association, would aim for something like a system of “Medicare for all” in which the government, not insurers, provides payments and sets coverage rules.

"It's the right moral thing to do," Lara says. "We live in the United States of America. We live in the most powerful state in the union. It is the right thing for us to make sure that we fight to ensure that everyone has coverage.”

Lara’s bill contains a long list of benefits the statewide program would cover. Not just doctors and hospitals, but also prescriptions, vision and dental care, hospice and rehabilitative therapies, and more.

California Health and Human Services Secretary, Diana Dooley, understands the appeal.

“I think in California there continues to be a great deal of interest and enthusiasm around single payer," she says. "It is very easy to talk about and it certainly takes advantage of the anxiety people have about health insurance companies.”

Lara’s plan does away with premiums, deductibles, co-pays — all those pesky out-of-pocket expenses. So where would the state get the money? Past proposals – here and in states like Vermont and Colorado – have suggested new payroll taxes.

"We know that single payer will be expensive," says Assemblyman Jim Wood, chairman of the Health Committee. "Some estimates from a few years ago, the analysis showed $200 billion plus."

"I believe in universal coverage and I’d love to see that happen in the future, but the devils in the details,” he added.

Roughly half of coverage in California is sponsored by employers.

If “you’re going to take health insurance largely out of the market, you’re going to disconnect it from employers,” Oberlander says.

Currently, premiums paid by both employer and employee fund private health insurance plans. Single-payer would change that: instead of paycheck deductions for premiums,  workers would see new taxes on their wages  to pay for the state plan. It would be controversial and disruptive, Oberlander says. "A lot of people are satisfied with what they have."

But Lara thinks it can be done, slowly and methodically. He is traveling this week in Canada, along with Bay-Area state senators Nancy Skinner and Scott Wiener. They’ll be learning about Canadian medical care and how it’s financed.

Lara takes heart from the fact that Canada’s system began in just one province, and then spread to others.  It did so despite resistance, over many years.

"We envision California being the first state to implement a universal healthcare program, and then having that then be the model for the rest of the other states.”

Lara says everyone should withhold judgment until he can provide more detailed funding plans in a month or two. His goal is to get the bill at least through the Senate this year, and then push it farther forward in 2018.

The trade group for insurers in California does not support the single-payer idea.

“A single-payer system would make the quality of our health care worse, not better,” says Charles Bacchi, president and CEO of the California Association of Health Plans. “We’ve made substantial progress in expanding and increasing access to and quality of care — this step backwards would be particularly devastating for Californians.”

Many conservatives oppose the single-payer approach. “We have come to value and expect a health care system that has private-sector market elements,” said Lanhee Chen, a fellow at the Hoover Institution and former chief policy adviser to former Massachusetts governor Mitt Romney.

A single-payer system would need federal approval, essentially giving California permission to take the money meant for Medicare and Medicaid, and distribute those funds in a totally new way.

"I’m not sure under what construct that could even occur," says Jennifer Kent, director of the Department of Health Care Services, which operates the state’s Medicaid program, known as Medi-Cal.

"The federal government would have to essentially turn those funds over to a state," she says.

As it stands, no state has a single-payer system. Perhaps the best-known effort to create one was in Vermont, but it failed in 2014 after officials there couldn’t figure out how to finance it.

Single-payer proposals have been put forth many times in the California Legislature since 2003, and all have hit roadblocks.

One bill, carried by former state senator Sheila Kuehl several years ago and passed by the state Legislature, would have created a payroll tax to help fund a program costing  $200 billion a year or more. That measure and a similar bill were vetoed by then-governor Arnold Schwarzenegger, who cited financial concerns.

Kuehl, now a Los Angeles County supervisor, said the time is as good as ever to reintroduce a proposal like single-payer because many people fear losing coverage under Republican proposals being discussed in Washington, D.C.

“The ACA created more familiarity with being insured,” said Kuehl. “They’ve recognized the value.”

Other observers say attempts to expand access should not undermine efforts to preserve insurance gains under Obamacare. The threat to Medicaid or private insurance access is still real, they say.

“California should explore all options, [but] we should not do that if it means withdrawing support for protecting the ACA,” said Jerry Kominski, director of the UCLA Center for Health Policy Research. “It would take decades to get back to where we are now,” he said.

In an interview with California Healthline, California Gov. Jerry Brown emphasized that financing a single-payer system would be a major challenge. Although he said he would entertain a conversation about a single-payer system, he did not say whether he would endorse creating one.

For one thing, it would require a new tax, which would have to be approved either by a two-thirds majority vote in the state Legislature or a simple-majority popular vote, he said. Even with the current Democratic supermajority, Brown said, there are always a few “outliers” who wouldn’t support raising new revenues.

Brown leaves office in 2018, however, and Newsom, who hopes to succeed him, is looking into a creating a plan for universal coverage that would be an alternative to a single-payer system.

One option, according to Newsom’s office, would be to use as a model the Healthy San Francisco program he introduced in 2007 as mayor. The city has used a combination of public money and contributions from employers and enrollees to plug holes in coverage and make primary care accessible to nearly everyone.

Newsom has acknowledged, however, that the San Francisco approach would not necessarily work in every county, and said he is open to other possibilities.

Using that model to expand health care statewide has some political advantages, Oberlander said, because it builds on the “status quo rather than radically restructuring” the current system.

Another California lawmaker proposes to keep the conversation going about universal health care, at least, by creating a commission that would make various recommendations to policymakers.

“We have to be able to move on multiple tracks at once,” said Assemblyman Rob Bonta (D-Oakland), who is carrying the bill to create the Health Care for All commission, which would convene in 2018.

The debate in Washington could actually produce some surprising opportunities for California and other states. The feds might, for instance, approve waivers to allow other types of experimentation within states. Some Republicans favor an approach in which each state decides on its own coverage system, within certain limits.

That could mean a retraction of coverage in some states, but in California it might open the door to a new model.

“It is possible that some liberal-leaning states are going to do things that we didn’t think  possible before,” Oberlander said.


This story was produced by Kaiser Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.