Two Parties, One Trough: How Weasels Sell California Out: #SinglePayer in #California
As the nation focuses on the U.S. Senate and the horrifying healthcare bill that was drafted in secret, California appeared to be headed for the passage of its own healthcare legislation. I write appeared, because for all the debates, new studies, and vigorous activism, California’s Assembly leader decided to pull the plug on SB562 on his own, without so much as a debate. The state Senate passed the bill by 24-13 votes two months earlier. The Los Angeles Times reported on its passage on June 1st:
“A proposal to adopt a single-payer healthcare system for California took an initial step forward Thursday when the state Senate approved a bare-bones bill that lacks a method for paying the $400-billion cost of the plan.
The proposal was made by legislators led by Sen. Ricardo Lara (D-Bell Gardens) at the same time President Trump and Republican members of Congress are working to repeal and replace the federal Affordable Care Act.
“Despite the incredible progress California has made, millions still do not have access to health insurance and millions more cannot afford the high deductibles and co-pays, and they often forgo care,” Lara said during a floor debate on the bill.
The bill, which now goes to the state Assembly for consideration, will have to be further developed, Lara conceded, adding he hopes to reach a consensus on a way to pay for it.”
Economist, Dr. Robert Pollin of University of Massachusetts Amherst completed an economic analysis of the costs involved in California’s single payer proposal. From the overview of his analysis:
“Assuming that universal coverage is achieved under Healthy California and that cost savings are also achieved to the extent we have estimated, the net impact will be to create a single-payer health care system in California that guarantees universal coverage for all California residents, while the overall costs of the full-coverage system will be about 10 percent less than the existing system. The overall annual costs of this single-payer system for California would be $331 billion as of 2017.
Financing Healthy California
There will be two sources of financing for Healthy California. The first is the same public health care revenue sources that are presently providing about 71 percent of all health care funding in the state. These include Medicare and MediCal, which together provide nearly 50 percent of all health care funding in California at present. It also includes tax subsidies for health care expenditures by individuals and households in the state, which provide about 9 percent of the state’s total health care funding. The Healthy California bill is explicit in stating that the State will work to obtain waivers in all of the present areas of public health funding, so that these present funding sources will continue to finance Healthy California.
Assuming the state is successful in obtaining these waivers, these funds will provide $225 billion in funding for the state’s single-payer program. That means that the remaining $106 billion to fund Healthy California will need to be provided by new revenue sources in the state. We propose two new taxes to generate the required $106 billion in additional funding as of 2017:
1) A gross receipts tax of 2.3 percent. This tax will be applied to all businesses in California. It will include an exemption for the first $2 million in receipts for all businesses. Through this exemption, firms that average up to 9 employees will have no gross receipts tax obligation. Firms with up to 19 employees will pay taxes on only about one-third of their gross revenue.
2) A sales tax of 2.3 percent. The sales tax will exempt all spending on housing, utility and food at home. To be consistent with the existing California tax code, it will also include exemptions on a broad range of service expenditures. It further includes a 2 percent income tax credit for families currently insured through MediCal, to fully offset their 2.3 percent sales tax spending.
These two taxes, set at the rates and under the specific provisions stipulated, will raise roughly $106 billion in the current California economy.”
Raise taxes? Given that, under a single payer plan, Californians would no longer have to pay copays, coinsurance, or deductibles, this proposal offers not only peace of mind, but cost-savings and not just a mere offset. California is a state that has a track record of voters who approve new taxes when they are placed on ballots. Californians overwhelmingly approved new taxes for education. With a higher than 60% approval rate for single payer, there is absolutely no reason to believe that Californians will balk at the taxes proposed here, especially when accounting for the costs they will no longer be required to bear for healthcare.
The Los Angeles Times published a Q&A entitled “What Would California’s Proposed Single-Payer Healthcare System Mean For Me?” What voters should understand, when it comes to how the proposal gets its funding, is this:
“What about overall healthcare costs for the state?
- A legislative analysis estimated overall costs would be $400 billion per year.
- Proponents of the plan are touting savings from the single-payer system and have come up with a lower annual price tag: $330 billion.
The Senate analysis pegged the total cost for the plan at $400 billion per year. Half of that would come from existing money, the other half from new revenues such as a payroll tax. Because the plan would eliminate the need for California employers to spend money on their workers’ healthcare (an estimated $100 billion to $150 billion annually), the total new spending on healthcare shouldered by the state under the bill would range from $50 billion to $100 billion yearly.
The $400-billion price tag is more or less in line with what Kominski and other researchers at UCLA estimated was the total healthcare spending in California in 2016: around $370 billion. Around 70% of those expenditures were paid by taxpayer dollars, the study found.”
Yes, additional funding will be needed but what one must remember is that the distance between what we currently are paying and what single-payer would cost is a very short hop, relatively speaking, and absolutely everyone would be covered in full, at no additional cost whatsoever, in a simplified system in which there is no middleman who syphons off billions of dollars in profits. Those dollars would be spent on caring for Californians.
While there’s been very little public commentary by California Democrats since Assembly Leader Rendon deep-sixed SB562, the media has been rife with anti-SB562 talk. For example, the guest host of Southern California’s very popular call-in show, Air Talk, just couldn’t contain her disdain for single-payer healthcare during the 45-minute segment aired on June 27th, allowing the conservative participant, Sally Pipes, to get away with outrageously inaccurate statements.
This is almost par for the course for public broadcasting, as viewers and listeners are treated to a steady diet of opinionated analyses that lean toward the neoliberal, upper middle class view. I write almost, because the show’s regular host, Larry Mantle, has a reputation for really wanting to shed light on issues. Perhaps the producers should have waited for Larry’s return from vacation…
Air Talk isn’t the only venue in which SB562 was discussed. Former FireDog Lake alum, David Dayen, penned a piece for The Intercept in which he went after the California Nurses’ Association with a vengeance, accusing them of deceiving their supporters:
“Rather than committing to raising the millions of dollars that would be needed to overcome special interests and pass that initiative, they would, apparently, rather deceive their supporters, hiding the realities of California’s woeful political structure in favor of a morality play designed to advance careers and aggrandize power.
That may sound harsh. It’s gentle.”
For a moment there, I almost had to check my calendar to make sure I hadn’t been transported back to the first trimester of 2016 and the nasty ad-hominem attacks against Bernie Sanders and his policy prescriptions. Back then, everywhere you turned, there was a nasty op-ed or cable TV rant.
Dayen, a progressive, criticizes the nurses’ union for… not raising money to outspend special interests and persecuting the California Assembly leader for tabling legislation without bringing it to the floor for a debate and vote? What kind of progressive are you, Mr. Dayen?
If that’s not bad enough, Dayen wrote a lengthy piece berating the CNA for:
“Lighty is implicitly saying that SB562 can never create a single-payer system. The failsafe will always be triggered unless the state constitution gets changed at the ballot, because there will never be enough money under the current iteration of Prop 98. Saying that out loud would depress enthusiasm and lessen CNA’s perceived power. So they hide the ball.”
Huh? California voters know that come the next election, any given cycle, they will vote on slews of ballot initiatives. We know about Prop 98, and we know that we, Californians, vote directly on matters of spending. California voters approved Prop 31 and a modest tax increase for education. Another ballot measure was approved by California voters, last November, to tax cigarettes an extra $2 per pack to pay more money to Medicare providers and increase funding for education. That money could be used in a single-payer scheme to close the funding gap and maybe tax a little less.
— David Sirota (@davidsirota) July 2, 2017
This is yet another way that money in politics intervenes against public policy and the will of voters. Crass politicians like Rendon need to be called out, rooted out, and voted out.
— David Sirota (@davidsirota) July 2, 2017
— Glenn Greenwald (@ggreenwald) July 1, 2017
What the Nurses’ Association Is Doing:
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