Nicole Rice

Single-payer healthcare bill stalled for the year

By Nicole Rice, Policy Director, Government Relations

Capitol Update, June 30, 2017

The Healthy California Act, the proposed government-run healthcare program, has been stalled in the state Assembly after Speaker Anthony Rendon (D-Lakewood) announced last week that he declined to send the bill to a policy committee for consideration.  Citing that measure as “woefully incomplete,” he acknowledged that “[e]ven senators who voted for SB 562 noted there are potentially fatal flaws in the bill, including the fact it does not address many serious issues, such as financing, delivery of care, cost controls, or the realities of needed action by the Trump Administration and voters to make SB 562 a genuine piece of legislation.”  He remains a strong proponent of the single-payer healthcare concept and admits the bill is not technically “dead” believing his action “… leaves open the exact deep discussion and debate the senators who voted for SB 562 repeatedly said is needed. The Senate can use [this] time to fill the holes in SB 562 and pass and send to the Assembly workable legislation that addresses financing, delivery of care, and cost control.”  The Speaker also revealed in his remarks that a November 2018 ballot measure may be pursued as an alternative pathway to single-payer healthcare. 

Senators Ricardo Lara (D-Bell Gardens) and Toni Atkins (D-San Diego), the bill’s joint authors, immediately issued a response stating how disappointed they were that “… the robust debate about healthcare for all that started in the California Senate will not continue in the Assembly this year,” and “California will continue to lead our nation toward healthcare for all, and we will not turn our backs on this matter of life or death for families.”

SB 562 will create a new single-payer government bureaucracy to control and finance the state’s health care system at an approximate cost of $400 billion, according to the Senate finance committee.  The bill currently does not include a funding mechanism but a study commissioned by the authors from the University of Massachusetts-Amherst proposed both a 2.3 percent gross receipts tax on businesses on total gross revenues over $2 million and a 2.3 percent sales tax increase with a credit of two percent for individuals on Medicaid.  However, the numbers considered to reach this conclusion do not account for the overutilization that even proponents acknowledge is bound to occur when you offer a system with expanded coverage; increased benefits and no cost-sharing.  Nor, does it contemplate how difficult it will be to get the waivers California will need from Congress to secure nearly half of the anticipated cost.  A miscalculation on either front could demand billions of additional dollars from employers and taxpayers alike.

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