Coastal
Post Online
January,
2004
California's Single-Payer Health Care Bill Moving
Forward
By Louis Nuyens
A state bill introduced last year to create a universal-care,
single-payer health insurance system for California is still alive and moving
forward.
Senate Bill 921 (SB 921), also known as the "Health Care
for All Californians Act," is authored by California Senator Sheila Kuehl.
The bill has steadily gained co-authors in both the senate and the assembly and
has long list of endorsing organizations from around the state.
If successful, SB 921 would provide medical insurance coverage
for all California residents in a publicly financed insurance system
administered directly by the state. The system would cover the vast majority of
health care needs, and offers to do so at a substantial savings when compared
to existing public and private insurance programs.
The system would be funded by a mix of revenue sources including
a low percentage payroll tax on all employers and employees, on the
self-employed and on recipients of unearned income, as well as a small tax on
tobacco products and alcohol. These sources would be consolidated with federal,
state and county money currently expended on health care into a state health
fund that would replace private health insurance premiums.
SB 921 would not create a socialized medical system, i.e. a
system in which medical personnel are employees of the state. Private sector
medical practices and companies would continue to operate as private entities.
In addition, the program permits private insurers to continue to operate in the
state, allowing the private sector to render competitive and complementary
insurance services..
Key Elements
According to legislative analysis of its latest version, SB 921
intends the following goals:
¥ Universal Coverage: Everyone would have the ability to choose
his or her personal health provider. Eligibility is conferred based on
residency, instead of randomly by employment. Residents traveling out of state
are covered for up to 90 days. California retirees with vested benefits and/or
paying applicable California health taxes are covered.
¥ All care would be compensated.
¥ All California licensed and accredited providers, group
practices, HMOs and integrated health care systems may participate, subject to
best medical practice and cultural and linguistic standards.
¥ The plan would create financial incentives to provide high
quality care, to encourage practice in under-served areas, to promote the
formation of comprehensive group practices and to encourage general
practitioners, internists and pediatricians (i.e.) to serve as primary care
doctors.
¥ There would be special programs to educate, recruit and retain
nurses.
¥ The plan would utilize a two-year transition period, overseen
by both a transition commission (to be appointed by the Governor) and a public
commission composed of representatives for consumers, healthcare providers,
policy experts, businesses, labor, the public health community, the health care
industry, hospitals, clinics, health researchers and educators.
SB 921 Background
The main motivations for the bill are that existing publicly
financed healthcare programs require an immense bureaucracy in order to support
over 2,500 different private health care plans and that the existing system
wastes healthcare dollars by supporting the additional 'overhead' of profits
required by private industry. While the SB 921 creates a "new"
governmental spending program, it would consolidate and replace less efficient
existing programs, resulting in a net savings.
Arguments that private-sector economic efficiency is largely
mythological when it comes to healthcare have been put forward based on
"common sense" for several decades. However, recent studies have supported
those assertions. In one 2000 study focusing specifically on California, a
bi-partisan report commissioned by the Universal Health Care Technical Advisory
Committee (UHCTAC) of the California Senate Office of Research modeled and
analyzed alternate various approaches to health care in California, ultimately
focusing on nine different models, three of which were 'single-payer' models.
The single-payer models resulted in higher degrees of coverage while yielding
savings of several billions per year.
A program of this magnitude requires an immense degree of
fine-tuning in order to avoid vulnerability to arguments from those opposed,
and to ensure smooth, economical operation once in effect. The architects of SB
921 learned from the defeat of 1994's Proposition 186 -- a single-payer ballot
initiative whose opponents outspent proponents 2-to-1 -- and have carefully
crafted SB 921 to avoid criticisms associated with 186 and with healthcare
insurance programs in other countries. What has emerged is a highly refined,
well though-out bill.
Recognizing that the burden of proof lies with SB 921
proponents, Senator Kuehl has refined the bill on numerous occasions and is
currently seeking a thorough analysis of the bills potential effects as
currently written. Results of that analysis should be available by Spring 2004.
SB 2
In the meantime another 2003 bill, SB 2 ("Health Insurance
Act of 2003"), authored by Senators John Burton and Jackie Speier, passed
through the legislature and is due to go into effect by January 2006 for large
businesses (200 or more employees) and in January 2007 for medium-sized
businesses (20 to 199 employees). SB 2 creates a "Pay or Play" system
for California, in which employers will be required to provide medical benefits
or pay taxes toward creation and/or operation of a publicly subsidized plan.
In some ways, many single-payer supporters view SB 2 as a first
step to an improved system. SB 2 increases coverage for employees and some
dependents. However SB 2 puts most of the burden of cost on employers, and it
does not attempt to extend coverage to all state residents.
Outlook for SB 921
While the potential for savings and increased coverage is a
strong inducement for a close look at a well-designed single-payer program, a
confluence of trends may promote discussion of SB 921, improving the possibility
of its adoption.
During the last two years, employers nationwide have experienced
double-digit increases in health-care costs, with even higher jumps in
California. For example, according to a survey released by one human-resource
consulting firm, Northern California companies with over 500 employees saw
average health care costs rise 12.3 percent in 2003 with projections of 15.4
percent next year. Employers may see a system that spreads costs like SB 921 as
welcome relief.
In addition, ongoing state budget woes may provide additional
incentives to look at the potential for cost savings under SB 921.
Economic and administrative benefits for employers may bring a
supportive nod from the business sector, which is deemed crucial by many observers.
Supporters include a long list of local governments, progressive
organizations, and healthcare advocacy organizations. Thus far, opposition is
limited and is put forth mainly by insurance companies who have a vested
interest in perpetuating the existing system.
For more information, see http://www.leginfo.ca.gov and the
March 2003 issue of the Coastal Post.