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Could California Actually Pass Single-Payer Health Care?

Sonali Kolhatkar: If passed, a new bill would establish a streamlined, publicly funded single-payer health care system in California, paid for by progressive taxes—in the face of dogged opposition from corporate profiteers.
Pass Single-Payer Health Care

Imagine living in a society where a medical diagnosis does not trigger crippling fears of the cost of treatment and prescription drugs, where switching jobs or being laid off didn’t include considerations around health insurance coverage, where trips to the emergency room don’t generate thousands of dollars in bills, and where the out-of-pocket cost of seeing a doctor is zero.

If two-thirds of California’s state legislators choose to cast votes in favor of Assembly Bill 1400, they could soon make such a society a reality for the residents of the nation’s most populous state.

The bill, introduced by State Assemblyman Ash Kalra in early January and sponsored by the California Nurses Association, would establish a publicly funded system in California guaranteeing free-of-charge health care to all residents, including immigrants. The system, dubbed CalCare, would cover medical, dental, and vision care, as well as mental health care. There would be no monthly premiums, co-pays or deductibles. Health care providers would simply bill the state government rather than insurance companies or patients.

If passed, a new bill would establish a streamlined, publicly funded single-payer health care system in California, paid for by progressive taxes—in the face of dogged opposition from corporate profiteers.

If it sounds too good to be true, it’s because we have simply not allowed ourselves to imagine such a streamlined health care system could be possible in the United States. Most of us perhaps assume it is entirely normal to live in a society where corporations and the wealthy elites who run them can profit off our health care.

Kalra had introduced the same bill a year ago, but because of the usual objections based on funding the costs of a publicly run health care system, 1400 failed. This time around, the assemblyman introduced an accompanying amendment, ACA 11, outlining how to pay for CalCare.

His plan is relatively simple: a fairly progressive taxation plan, requiring a modest 2.3 percent tax on companies that make more than $2 million a year, payroll taxes of 1.25 percent on businesses employing 50 or more people (which would naturally replace the costs to businesses of covering health insurance premiums for those same employees), and a 1 percent tax on those individuals earning between $49,900 and $149,509 a year. Those making more will “pay an additional income tax based on specified marginal tax rates and adjusted for inflation,” as per Kalra’s fact sheet on ACA 11.

This sounds imminently reasonable. Take a Californian making a comfortable salary of $100,000 a year. Their typical monthly health insurance premiums for themselves and/or any dependents is likely no less than $500 a month—a low estimate—amounting to 6 percent of their salary. In comparison, under CalCare, this hypothetical member of the taxpaying public would be spending only 1 percent of their annual salary, or $1,000 per year, in health care costs via taxes.

The reason for such a stark difference is twofold: the current system’s high administrative costs, and the profits that insurance companies insist are essential to providing excellent care. AB 1400 would eliminate both the bureaucracy of complicated billing systems, and the bounty that CVS/AetnaAnthem, and the like siphon off in profits.

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According to one estimate, California currently spends a whopping $400 billion a year in total health care costs—this, even with an estimated 2.7 million Californians lacking health insurance. Compare this to the state Assembly Appropriations Committee’s cost estimate for AB 1400 of $314 billion to $391 billion, which would cover all Californians.

Yet the naysayers are up in arms with utterly depressing predictability. Los Angeles Times columnist George Skelton, who has a history of excoriating single-payer health care policies, wrote yet another screed, dubbing AB 1400 “contentious” and complaining on behalf of for-profit corporations that “undefinednsurance companies would be shoved aside” if CalCare were to become a reality.

Skelton engaged in the standard bait-and-switch logic that critics of universal publicly funded health care resort to, in comparing current government health care costs to future costs without factoring in the savings to individuals and employers who would no longer be paying premiums, and without accounting for the savings from transforming complicated administrative billing into a streamlined system.

Skelton also resuscitated a standard fearmongering tactic, saying that “[p]eople would be switched from their current coverage—whether private, federal Medicare or Medi-Cal for the poor—to a new state-run plan called CalCare.” In fact, Californians who are currently lucky enough to have overpriced for-profit health care would remain with their current providers, minus all the onerous out-of-pocket costs. Those providers would simply bill the state rather than insurance companies.

Also joining Skelton in opposition to AB 1400 is the California Chamber of Commerce, which sent a letter festooned with corporate logos and the logos of local chambers of commerce, claiming that AB 1400 would be a “job killer,” the go-to excuse for businesses seeking to preserve their bottom line. The signatories, like Skelton, also make wild claims about the tax increases needed to pay for CalCare without accounting for the cost savings from ending premiums, co-pays, deductibles, administrative overhead and corporate profits.

In spite of the barrage of anti-single-payer propaganda that we are steeped in, support for a bill like AB 1400 remains strong. A May 2021 poll found 60 percent public support in California. Imagine how much bigger that number would be if Californians weren’t constantly exposed to the sort of misleading analysis that corporate media outlets like the Los Angeles Times print.

On January 20, the Assembly Appropriations Committee passed AB 1400, clearing the way for a floor vote on the bill by the end of the month. In spite of the California Democratic Party’s stated support of single-payer health care on its platform, not all Democratic Assembly members support AB 1400 (predictably California Republicans strongly oppose it). Most worryingly, California’s Democratic governor Gavin Newsom, who campaigned on single-payer health care, is wavering. Grassroots supporters like the California Nurses Association and Public Citizen are campaigning to push state lawmakers and Newsom to do the right thing.

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Even though AB 1400 is a California-based effort, it has national significance. If CalCare becomes a reality, it would offer a critical precedent for similar single-payer bills in states across the nation, unleashing momentum behind the undeniable importance of ensuring free, publicly funded health care for all.

Sonali Kolhatkar
Independent Media Institute

This article was produced by Economy for All, a project of the Independent Media Institute.