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Single-Payer Bill Passes California Senate

Thursday, June 8, 2017  
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California's universal health care bill, which would create a state-run, single-payer-style system and completely overhaul health care in the state, passed the California Senate Thursday. It now moves on to the Assembly, despite lacking a funding mechanism.

Lawmakers debated the legislation, S.B. 562 - dubbed the Healthy California Act — for about two and a half hours before passing it on a 23-14 vote. It promises to cover all Californians, regardless of immigration status, under a state-run system with no insurance premiums, out-of-pocket costs for drugs or deductibles. Annual cost estimates for the plan run as high as $400 billion.

The bill's author, state Sen. Ricardo Lara, acknowledged that the 38-page bill was a work in progress, but said he would work on the financing structure and even bring it back through the Senate committee process. He believes the concept will work: "By pooling the health funds in a publicly run fund, we get the bargaining power of the sixth largest economy in the world."

In Thursday's floor discussion, the bill's Democratic supporters agreed that while it wasn't "fully cooked," the legislation needed to move forward in light of the debate in Washington, D.C., to repeal Obamacare, which could jeopardize coverage for millions. The bill faced a Friday deadline to pass the Senate.

Lawmakers opposed to the bill — mostly Republicans — feared the plan could bankrupt the state and cause nonresidents to flock to California for "free" care. Sen. Ted Gaines (R-El Dorado Hills) argued that the bill would force the state to "pay through the teeth" for what he called a fantasy.

"I can't think of a more effective way to cripple the state financially than to charge ahead with what looks to be a reckless plan," Gaines said.

A few Democrats, including Sen. Ben Hueso of San Diego, said the bill just had too many unanswered questions for them to feel comfortable sending it to the Assembly. While Hueso said he supports a single-payer system, he said he couldn't vote for S.B. 562. "I don't know what I'm voting on," he said.

Even if it passes the state Assembly, the bill's fate before Gov. Jerry Brown — who has expressed concerns about the bill's costs — is uncertain. Ultimately, it will likely go to the voters in the form of a ballot proposition.

Two fiscal analyses of the bill have recently been released. Last week's fiscal committee staff report estimated California's total annual health care expenses at $400 billion. The report suggested half of the bill's costs could be covered by existing funds used to pay for Medicare and Medicaid, with the remaining $200 billion to be covered by a payroll tax of 15 percent.

A study released Wednesday, funded by the California Nurses Association, pegged the annual cost of running a universal health system at $331 billion. It proposed paying for the $106 balance with a 2.3 percent consumer sales tax and another 2.3 percent business tax on gross sales revenue, with exceptions that generally exempt small businesses.

Many state-based groups are opposed to the bill, including the California Chamber of Commerce, the California Association of Health Underwriters and the California Association of Health Plans.


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