Sacramento, Calif. (Associated Press) – California Democrats on Tuesday took their first step toward eliminating the private health insurance market in the country’s most populous state and replacing it with a government-run plan they promised would not deprive anyone of the care they need.
But the motion that passed a state legislature committee is still far from becoming law. It faces strong opposition from powerful business interests who say it will cost too much. And even if it becomes law, voters will have to agree to a massive income tax increase to pay for it — a vote that may not happen until 2024.
Still, Democrats hailed Tuesday’s vote for leapfrogging one of their long-stalled political goals, and indicated they would not back down from the fight even during an election year. In a hearing that lasted for hours, some lawmakers and advocates attacked the healthcare industry that they say has benefited corporate interests at the expense of consumers.
Adi Barkan, 38, a married father of two, was diagnosed with amyotrophic lateral sclerosis six years ago and is now mostly paralyzed. He testified at Tuesday’s hearing with the help of a computerized voice that spoke as he typed using technology that tracks the movement of his eyes. Berkan said he fought his insurance company to get the treatment he needed, including suing them to get the ventilator that keeps him alive.
“Even the good health insurance I have, doesn’t cover the cost of the care I need to survive,” he said.
To pay for everything, Democrats introduced a separate bill that would raise corporate and individual taxes by about $163 billion annually, according to an analysis by the California Taxpayers Association, which opposes the bill. Voters will have to agree to the tax increases. Assembly member Ash Clara, a San Jose Democrat and author of the proposal, said Tuesday that it could be 2024 before that proposal goes to the polls.
The bill introduced Tuesday would create a comprehensive health care system and set its rules. The Assembly’s Health Committee cleared 11-3. Republicans voted “no,” arguing that the bill would cost too much and reduce doctors’ and nurses’ salaries, potentially exacerbating a shortage of health care workers.
“If government-run health care becomes a law, millions of Californians will flee the state — either to avoid $163 billion annually in new taxes or to escape the long waits for care that will become the norm,” said Mary Waldron, the Republican leader in the assembly. .
Even some Democrats who voted for the bill have come under fire for the proposal. Assembly member Outum Burke, a Democrat from Englewood, said presenting the bill without a source of funding made the process a mockery.
“This bill has been sold to my community that it will change thigs now and it’s free. None of those things are true,” she said.
Business groups, led by the California Chamber of Commerce, said the government-run health care system would be so costly that the tax increase would still not be enough to pay for everything. In 2018, California’s health care expenditures totaled $399.2 billion, accounting for 13.2% of the state’s gross domestic product, according to an analysis by the Committee on Healthy California for All.
“To completely abolish the current system in the face of the unrelenting epidemic by taxing Californians annually by hundreds of billions of dollars is not the answer,” said Preston Young, a policy advocate with the California Chamber of Commerce.
Clara, the San Jose Democrat and author of the proposal, said he knows opponents will focus on the cost of the plan. But he said that argument distracts from the fact that Californians already pay “the world’s highest health tax.”
“You can refer to it as premiums, deductibles, co-pays, and denial of care,” Kalra said, adding that none of those costs would exist under a universal healthcare system. “They are clearly being cheated today and a lot of them feel helpless about it for understandable reasons.”
California’s health care system is paid for by multiple entities – patients, insurance companies, employers, and governments. But the universal healthcare system will pay one entity – the government, or “single payer”.
The single-pay system has been a staple of progressive political discourse in California for decades. But it has not been easy to achieve in a country where most people pay for private health insurance through their jobs. In 1994, voters overwhelmingly rejected a ballot initiative that would have created a universal health care system. Another attempt passed in the state Senate in 2017, but it did not get a vote in the state assembly.
Questions about how to pay for a single payer system doomed previous plans to fail. In 2011, Vermont enacted the nation’s first universal health care system. But state officials abandoned it after three years because they said they could not pay for it.
Governor Gavin Newsom promised to do so when he ran for governor in 2018, and voters elected him by an overwhelming majority. But in his first three years in office, Newsom focused more on making sure everyone in California had health insurance — a strategy he said contained the “spirit” of a single payer system.
“When you’re a governor, you have to be in the ‘how’ business,” Newsom said. “I believe in a single payer financing model. “How” at the state level is a question that needs a thoughtful answer.