California’s next governor faces a long list of challenges, from housing and health care to immigration. It seems like the upcoming mid-term elections that healthcare will be a dominant item in the debates. As Jonathan Cooper wrote, no topic has dominated California’s governor race like President Donald Trump including what he and the GOP are attempting to do with Obamacare. The Republicans want to be like him; the Democrats want to oppose him. But whoever wins will face a long list of challenges from housing and homelessness to health care. For example, all the Democrats say they support, at least in concept, “single-payer” health care — the idea that the government should pay for health coverage for everyone in the state, instead of the complex mix of employers, unions, individuals, Medicare and Medicaid that reigns today. But that didn’t stop it from being a major sticking point between them. Newsom was an enthusiastic supporter of a bill sponsored by the California Nurses Association that would implement a “single-payer” health care system. But it lacked key details, most notably a plan to cover the $400 billion cost. Chiang and Villaraigosa accuse Newsom of misleading voters with unattainable promises. Villaraigosa called it “snake oil.” For his part, Newsom calls his rivals “can’t-do Democrats” too fixated on the challenges of single-payer health care. Allen and Cox oppose single-payer health care.
Here are more of the specifics of the debates and is it really a single payer system or universal health care?
When Gavin Newsom campaigns on his support for a California single-payer healthcare system, he’s talking about more than the virtues of universal care. He’s trying to sell himself as a bold visionary.
When Antonio Villaraigosa warns of the financial calamity that awaits if the state adopts single payer, he’s trying to send a different message — that he’s a fiscally responsible realist who won’t make promises he can’t keep.
The debate over single payer in California’s race for governor reaches beyond how best to cure the inadequacies of health care in the state. It’s a political marker for the top Democratic candidates trying to woo different factions of their divided party and has emerged as the biggest policy flashpoint in the campaign.
“Single-payer health care has become a clear litmus test. If you support it, you’re a pure progressive. If you’re opposed to it, you’re a pragmatist,” UC San Diego political scientist Thad Kousser said. “It’s more of a declaration than a policy promise because this is never going to happen, certainly during the Trump presidency.”
But Newsom has promised to pursue a state-supported single-payer health care system if he’s elected in November. And fellow Democratic candidate Delaine Eastin, a former state superintendent of public instruction, also declared herself all-in on the concept. Both say California should lead the way but have been criticized by their rivals for failing to provide a concrete plan to fund such a program or overcome the many obstacles it would face.
Depending on who becomes the next governor, every Californian’s well being and bank account could potentially undergo a revolutionary change. With the June 5 primary just two months away, Newsom remains the clear front-runner.
Coverage of California politics:
“My opponents call it ‘snake oil,'” Newsom said at the California Democratic Party convention in February, a reference to Villaraigosa’s oft-used criticism of the lieutenant governor’s support for the plan. “I call it single payer. It’s about access. It’s about affordability. And it’s about time. If these can’t-do Democrats were in charge, we wouldn’t have had Social Security or Medicare.”
Villaraigosa dismisses Newsom’s campaign promise as a hollow attempt to entice the left. He said the system Newsom supports would require all Californians on Medicare to give it up in favor of a new, unproven state healthcare system — a declaration meant to rile up the 5.6 million residents covered by the popular federal program.
“Newsom calls any attempt to demand details of his $200-billion tax increase and plan to force seniors off of Medicare as ‘defeatist,'” Villaraigosa said recently. “I call refusing to say how you will successfully persuade Californians to more than double their taxes while taking away their Medicare simply deceptive.”
State Treasurer John Chiang, the other major Democrat in the running, has also urged caution. Instead of transforming healthcare in California in one fell swoop, the state should implement single payer bit-by-bit to ensure that it’s affordable and effective, he said.
“I support single-payer, but we have to be truthful here,” Chaing said during a fall Democratic debate in San Francisco. “How many of you want to pay an additional 90% in taxes? … Let’s scale up, see what revenues we have because we can’t cover everything.”
In Washington, former presidential candidate Sen. Bernie Sanders (I-Vt.) is leading a push for a plan that would, in essence, expand Medicare to provide healthcare to all Americans., For now, it’s little more than a political mirage — the Trump administration and congressional Republicans have been trying to repeal, not expand, government healthcare coverage provided under the Affordable Care Act.
With federal action unlikely, the California Legislature debated in 2017 whether to implement a state-sponsored single-payer system. The legislation, Senate Bill 562, was shelved in the Assembly over concerns about the cost and the lack of a comprehensive plan of how to pay for and implement such a massive new government program. A legislative analysis estimated the cost to be $400 billion per year. Half of the money for the system would come from existing state funds currently spent on healthcare, with the other half from new revenues such as a payroll tax, according to the analysis.
Newsom’s support of SB 562 has been nuanced. When he spoke at a convention of the California Nurses Assn., which endorsed Newsom and is the most vocal backer of the bill, he told the enthusiastic crowd, “It’s time to move 562.” But later, when talking with reporters, Newsom said he was referring to moving the bill through the legislative process, and acknowledged some “open-ended” issues still needed work.
When a coalition of labor unions, community health organizations and immigrant-rights groups tried to steer the health care debate away from SB 562 in March, proposing a series of measures to make healthcare in California more affordable and accessible, Newsom praised it as a “step in the right direction.” He said it had the potential to move California closer to universal coverage.
Villaraigosa and Chiang have accused Newsom of shifting his message on SB 562 to appease different audiences.
But Newsom has taken shots at them for playing both sides as well. Villaraigosa and Chiang say they support the concept of single payer — ideally at the national level — yet call Newsom fiscally reckless for supporting a California program. Newsom has insinuated that they lack the political courage to make it happen.
He also said the hand-wringing over the cost of single payer is an argument. “Most of the money needed to support a single-payer system already is being spent on the plans that it would replace, he said: government-run exchanges and private healthcare plans.
“I think we can achieve it. Let me tell you why: We’re already spending $367 billion a year on health insurance in the state of California,” Newsom said at a San Diego debate in February. “In every developed nation in the world that has a single-payer financing system, one thing is absolutely true: It costs less money than multi-player.”
U.S. healthcare tab to keep rising, led by higher costs for drugs and services, a government report says. Driven by rising prices for drugs and medical services, the nation’s healthcare tab will continue to outpace economic growth over the next decade, according to a new government report.
And by 2026, healthcare spending will account for almost one-fifth of the U.S. economy, an all-time record. The $367-billion figure Newsom used comes from a 2016 study done in part by Gerald Kominski, a professor of health policy at UCLA. Kominski agrees that, in theory, additional revenue might not be necessary if all of that money spent on healthcare in California can be funneled to a single state healthcare agency. Still, that would require permission from the Trump administration and Republican-led Congress — both hostile to Democratic leaders in California — to take control of Medicare and Medi-Cal funding Washington sends to the state, as well as convincing all Californians to switch to state-run healthcare coverage.
“There are still some significant barriers,” Kominski said. Micah Weinberg, president of the Bay Area Council Economic Institute, said Newsom fails to account for the increased costs of the comprehensive coverage being promised under a state single-payer system. Those costs include covering an estimated 1.8 million immigrant adults in California who are in the U.S. without authorization and covering long-term care not covered by Medicare, as well as eliminating all deductibles and other out-of-pocket expenses for Californians, he said.
“We’re being misled into believing that if you provide free universal care, it’s going to cost less,” Weinberg said.
Eastin, the only candidate of the four to throw her unequivocal support behind SB 562, has said implementing single payer is essential because “people are dying” for lack of proper healthcare. She has also acknowledged that it won’t be simple.
“What we have to do is have a conversation, an adult conversation, with real leaders at the table talking about how we’re going to close the gap and get additional money,” Eastin said at one of the Democratic debates, adding that she’s open to exploring different revenue sources, including a gross receipts tax.
The two top Republicans in the race, Rancho Santa Fe businessman John Cox, and Huntington Beach Assemblyman Travis Allen, have both ripped single payer as a government boondoggle.
Cox mockingly suggested that the state could also provide “single-payer food and single-payer housing” for everyone. Allen said it would be as efficient and customer-friendly as the DMV and bankrupt the state.
A 2017 poll by the nonpartisan Public Policy Institute of California found that 65% of adults in California favored the creation of a state single-payer healthcare program, but that support dropped to 42% when asked about paying higher taxes to fund it.
“You have to wonder, over time, whether this is an issue that candidates want to own,” PPIC President Mark Baldassare said.
Other states are having similar discussions regarding the single-payer system, whether it is Medicare for All or Medicaid for all or some other variety of a government-run system. But is the single-payer system the correct approach as I started reviewing last week?
“Medicare for all” is a popular idea, but for Americans, transitioning to such a system would be difficult, to say the least. Olga Khazan last year wrote that French women supposedly don’t get fat, and in the minds of many Americans, they also don’t get stuck with très gros medical bills. There’s long been a dream among some American progressives to truly live as the “Europeans1” do and have single-payer health care.
Republicans’ failure—so far—to repeal and replace Obamacare has breathed new life into the single-payer dream. In June, the majority of Americans told Pew that the government has the responsibility to ensure health coverage for everyone, and 33 percent say this should take the form of a single government program. The majority of Democrats, in that poll, supported single payer. A June poll from the Kaiser Family Foundation even found that a slim majority of all Americans favor single payer.
Liberal politicians are hearing them loud and clear. Vermont Senator Bernie Sanders reportedly plans to introduce a single-payer bill once Congress comes back from recess—even though no Senate Democrats voted for a single-payer amendment last month. Massachusetts Senator Elizabeth Warren has also said “the next step is single payer” when it comes to the Democrats’ health-care ambitions.
But should it be? It’s true that the current American health-care system suffers from serious problems. It’s too expensive, millions are still uninsured, and even insured people sometimes can’t afford to go to the doctor.
Single payer might be one way to fix that. But it could also bring with it some downsides—especially in the early years—that Americans who support the idea might not be fully aware of. And they are potentially big downsides.
First, it’s important to define what we mean by “single payer.” It could mean total socialized medicine, in that medical care is financed by—and doctors work for—the federal government. But there are also shades of gray, like a “Medicaid for all” system, where a single, national insurance program is available to all Americans, but care is rationed somewhat—not every drug and device is covered, and you have to jump through hoops to get experimental or pricier treatments. Or it could be “Medicare for all,” in which there’s still a single, national plan, but it’s more like an all-you-can-eat buffet. Like Medicare, this type of single-payer system would strain the federal budget, but it wouldn’t restrict the treatments people can get. Because it’s the term most often used in single-payer discussions, I’ll use that here.
The biggest problem with Medicare for all, according to Bob Laszewski, an insurance-industry analyst, is that Medicare pays doctors and hospitals substantially less than employer-based plans do.
“Now, call a hospital administrator and tell him that his reimbursement for all the employer-based insurance he gets now is going to be cut by 50 percent, and ask him what’s going to happen,” he said. “I think you can imagine—he’d go broke.” (As it happens, the American Hospital Association did not return a request for comment.)
The reason other countries have functional single-payer systems and we don’t, he says, is that they created them decades ago. Strict government controls have kept their health-care costs low since then, while we’ve allowed generous private insurance plans to drive up our health-care costs. The United Kingdom can insure everyone for relatively cheap because British providers just don’t charge as much for drugs and procedures.
Laszewski compares trying to rein in health-care costs by dramatically cutting payment rates to seeing a truck going 75 miles an hour suddenly slam on the brakes. The first 10 to 20 years after single payer, he predicts, “would be ugly as hell.” Hospitals would shut down, and waits for major procedures would extend from a few weeks to several months.
Craig Garthwaite, a professor at the Kellogg School of Management at Northwestern University, says “we would see a degradation in the customer-service side of health care.” People might have to wait longer to see a specialist, for example. He describes the luxurious-sounding hospital where his kids were born, a beautiful place with art in the lobby and private rooms. “That’s not what a single-payer hospital is going to look like,” he said. “But I think my kid could have been just as healthily born without wood paneling, probably.”
He cautions people to think about both the costs and benefits of single payer; it’s not a panacea. “There aren’t going to be free $100 bills on the sidewalk if we move to single payer,” he said.
He also predicts that, if single payer did bring drug costs down, there might be less venture-capital money chasing drug development, which might mean fewer blockbuster cures down the line. And yes, he added, “you would lose some hospitals for sure.”
Amitabh Chandra, the director of health policy research at Harvard University, doesn’t think it would be so bad if hospitals shut down—as long as they’re little-used, underperforming hospitals. Things like telemedicine or ambulatory surgical centers might replace hospital stays, he suspects. And longer waits might not, from an economist’s perspective, be the worst thing, either. That would be a way of rationing care, and we’re going to desperately need some sort of rationing. Otherwise “Medicare for all” would be very expensive and would probably necessitate a large tax increase. (A few years ago, Vermont’s plan for single payer fell apart because it was too costly.) Also, we have to go back even farther to see the experience in the great State of Massachusetts and their experience.
If the United States decided not to go that route, Chandra says, we would be looking at something more like “Medicaid for all.” Medicaid, the health-insurance program for the poor, is a much leaner program than Medicare. Not all doctors take it, and it limits the drugs and treatments its beneficiaries can get. This could work, in Chandra’s view, but many Americans would find it stingy compared to their employers’ ultra-luxe PPO plans. “Americans would say, ‘I like my super-generous, employer-provided insurance. Why did you take it away from me?’” he said.
Indeed, that’s the real hurdle to setting up single payer, says Tim Jost, emeritus professor at the Washington and Lee University School of Law. Between “80 to 85 percent of Americans are already covered by health insurance, and most of them are happy with what they’ve got.” It’s true that single payer would help extend coverage to those who are currently uninsured. But policymakers could already do that by simply expanding Medicaid or providing larger subsidies to low-income Americans.
Under single payer, employers would stop covering part of their employees’ insurance premiums, as they do now, and people would likely see their taxes rise. “As people started to see it, they would get scared,” Jost said. And that’s before you factor in how negatively Republican groups would likely paint single payer in TV ads and Congressional hearings. (Remember death panels?) It would just be a very hard sell to the American public.
“As someone who is very supportive of the Democratic Party,” Jost said, “I hope the Democrats don’t decide to jump off the cliff of embracing single payer.”
Common misconception: Not all European countries have single payer. But we all know that this is not true!! Those that have money can pay for private healthcare or travel to the U.S.A. for treatment.
More next week.
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