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Whether to establish a state-run, single-payer health-care system is shaping up to be one of the main differences among the candidates for governor in California in the run-up to the June primary election. The front-runner, Lt. Gov. Gavin Newsom, says the only thing stopping single-payer in California is a lack of political leadership. The candidate running second in the pack, former Los Angeles Mayor Antonio Villaraigosa, says he supports single-payer but has concerns about how to pay for it.
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The cost is more than concerning, it’s catastrophic. Implementing a single-payer system would require tens of billions of dollars in new taxes — and thereby lead the Golden State into financial ruin.
The state Senate has admitted as much. The chamber passed Senate Bill 562 in June to create a system that provides “free” care to all California residents, including undocumented immigrants. The bill would eliminate co-pays, deductibles and all other forms of cost-sharing.
The price tag for the single-payer plan envisioned by SB562, per a Senate Appropriations Committee report, is $400 billion per year. Half of that figure would come from new taxes.
To put those figures in perspective, the state’s total expenditures next year are projected to be about $183 billion. So single-payer would effectively double the state budget.
Californians do not want to shoulder all these extra costs. According to a May survey from the Public Policy Institute of California, two-thirds of Californians backed a single-payer system earlier this year. But support plummeted by more than a third when respondents were told the plan would raise taxes.
Hefty new taxes aren’t the only reason why ordinary Californians are leery of single-payer.
Many voters don’t realize that single-payer means there would be only one health insurance plan statewide — a government-run one. Forty-seven percent of all Americans, and 52 percent of Democrats, mistakenly believe they’d be able to keep their current plans in a single-payer system, according to a Kaiser Family Foundation study.
The single-payer system under consideration by the Legislature would require the 18 million Californians who have employer-sponsored health plans to give them up. The 4.5 million Golden State seniors on Medicare — and 13 million people on Medi-Cal — would have to do the same.
Many patients would lose access to their doctors. Some physicians would retire early to avoid the pay cuts and administrative headaches that a government-run system would no doubt bring. Others would move to other states, where their earning power would be greater. And the most talented medical graduates would think twice before coming to California, where the state could micromanage their practice of medicine — and would pay them less.
Lawmakers on both sides of the aisle have balked at the plan. Assembly Speaker Anthony Rendon, a Democrat from Los Angeles County, shelved the bill this summer, calling it “woefully incomplete” on “financing, delivery of care, cost controls” and more.
“Free” health coverage that covers every service and procedure sounds wonderful. But the single-payer system that’s captivated so many progressives in California would be far from free. It’d impose tens of billions of dollars in new taxes, deprive millions of Californians of the health plans they have and like, and result in rationed care when demand outstrips what the state is willing and able to pay for.
Sally C. Pipes is president and CEO of the Pacific Research Institute and author of “The Way Out of Obamacare” (Encounter 2016). Twitter: @sallypipes
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