I'm Just A Bill - CA Single-Payer Bill Passed Senate, Next To The Assembly.

California took another step closer to enacting a single-payer health law yesterday. If signed by Governor Jerry Brown, California becomes the first state to provide what is sometimes described as "Medicare-for-All". The bill is very controversial as it advanced this far without a clear path for funding the massive $400B price tag. For perspective, that is more than twice the entire state budget. The Healthy California Act would replace the Affordable Care Act (Obamacare) and every form of health insurance in California. It effectively eliminates health insurance and replaces it with a state-run system. That includes your employer-based benefits... medical, dental and vision - all gone and replaced with a state-run system. But right now it's just a bill and has to go through the process.

The legislative process…

If you remember your high school civics class (or ABC's School House Rock) you may recall that a bill is made into law through a lengthy process. It starts as an idea (authored in the Senate in this case), gets drafted into a bill (a very vague draft in this case) and gets introduced by the house of origin (in the Senate on 2/17/17). It goes through a first reading on the floor, then to Committee hearings (Senate Health Committee in this case) and letters of support or opposition are considered and passed by majority. 

Bills passed by committees are read a second time on the floor in the house of origin and then assigned to a third reading. Bill analysis is prepared prior to third reading, explained by the author, discussed by the Senate and voted on by a roll call vote. 

That’s what happened today. SB 562 passed with a vote of 23-14. 

SB 562 will now go to the Assembly where the process is repeated. If SB 562 is amended by the Assembly, it must go back to the Senate to agree on the changes. If agreement cannot be reached, the bill is referred to a two-house conference committee to resolve differences. Three members of the committee are from the Senate and three are from the Assembly. If a compromise is reached, the bill is returned to both houses for a vote.

If both houses approve the bill, then it goes to Governor Brown. The Governor can sign the bill into law, allow it to become law without his signature, or veto it. A governor's veto can be overridden by a 2/3rds vote in both houses. Most bills go into effect on the first day of January of the next year. 

How the Senate voted:

YES: Allen, *Atkins, Beall, Bradford, De León, Dodd, Galgiani, Hernandez, Hertzberg, Hill, Jackson, *Lara, Leyva, McGuire, Mendoza, Mitchell, Monning, Newman, Portantino, Skinner, Stern, Wieckowski, Wiener (*bill authors)

NO: Anderson, Bates, Berryhill, Cannella, Fuller, Gaines, Glazer, Moorlach, Morrell, Nguyen, Nielsen, Stone, Vidak, Wilk

No Votes Recorded: Hueso, Pan, Roth

Who supports it and why? (from bill analysis)

This bill is sponsored by the California Nurses Association/National Nurses United and supported by numerous labor organizations, faith-based and consumer groups, certain businesses, and Democratic Party groups, who argue this bill provides publicly funded and progressively financed health care coverage for all California residents regardless of age, income, or immigration status, with no network restrictions, deductibles, co-pays, or other limitations on necessary care.

• Supporters argue healthcare is a human right, and the United States continually outspends other wealthy nations on per capita health care costs—some by more than double—while the quality of care and national health outcomes continue to fall behind. Californians as individuals, workers, families, businesses, and taxpayers are driven past their breaking point because of soaring health costs and lack of access. Supporters argue the experience of Medicare and of nearly every other industrialized country shows a single payer system is the most cost-effective and equitable way to provide quality health care as all residents are covered, and the system can eliminate wasteful spending and rein in skyrocketing prices.
• Supporters argue the Healthy California Act would provide the comprehensive and quality health care coverage that all Californians deserve and would ensure that insurance companies and the corporate ledger no longer determines the health and well-being of our state.

Who opposes it and why? (from bill analysis)

This bill is opposed by business and health insurance groups who argue this bill creates a bureaucracy which would control and finance the state’s health care system and ultimately result in significant job loss to the state.

• California employers cannot sustain an added tax burden (15% payroll tax) after the most recently enacted transportation tax package, that significant job loss will result from this bill, that California voters in 1996 previously rejected a single-payer health measure, that single payer costs are unsustainable ($400B), and government-run health care is less efficient and effective.
• Other opponents argue the state has made important progress in implementation of the ACA, but this progress is in a precarious position due to Congressional “repeal and replace” proposals, and this is not an appropriate time to divide the health care and policy community against itself with a symbolic measure that could not be implemented even if it were passed.

How does it impact me?

• I am covered through my job - If you work for an employer of any size, or type (union, non-profit, self-funded)... your employer-based coverage ends and is replaced by a state single-payer. (includes medical, dental, vision and nursing care). Want to just "opt-out" and buy-up to private coverage? That's not an option.
• I have Medicare or Medi-Cal. Both would be replaced and merged into the single-payer plan, pending approval from the federal government. No promise they would grant a waiver to redirect and repurpose current dollars. (a big and risky assumption)
• I am a doctor or healthcare provider. Provider reimbursement rates are expected to drop by 15% to 20%. Providers are employers too so they are not exempt from the 15%+ payroll tax. Single-payer also reverses the progress made with new reimbursement models (e.g. pay-for-performance, ACO's, and value-based care, etc...) and instead reverts back to the basic fee-for-service reimbursement system we are trying to evolve from. The CA Medical Association did not support SB 562.

“People by and large like the health insurance they have,” in part because most people have limited or infrequent interactions with the healthcare system, ...They’re not willing to give up something they like enough for something unknown.” - Jonathan Gruber, ACA architect

Summary. The road to creating a new law is long and this bill has serious challenges. Upsetting how every Californian receives their heath care is a big deal. While single-payer may look like free insurance, it is far from free. It's a shift from paying premiums to paying higher taxes. Increasing our payroll taxes will result in wage stagnation and massive job losses and an exodus of businesses leaving California for more tax-favorable states, like Nevada. While well-intended, the author's proposed language could also make California a medical destination for other states (and the world) to visit for free health care. As written, the bill does not require citizenship or permanent residency that sufficiently requires "medical tourists" to pay into the system. There are many comparisons to the Canadian and UK models. These are very different than what is proposed in California (a state, not a country).

Governor Jerry Brown is responsible for a robust budget and full plate of commitments and challenges including, the state's $68 billion high-speed rail, improving transportation and water infrastructure (estimated $200 billion) and restoring the California's $1 trillion underfunded public employee pensions. The Health California Act is ambitious, if not irresponsible in its approach. Still, I remain open to the debate and realistic progress toward a national universal coverage solution which considers a combination of private and public health coverage - something that does not place California at an unfair disadvantage for our economy, jobs, and taxes. And a system overhaul that ensures patient quality and access to care will not be compromised. And for clarification, when comparing other single-payer models, most other developed countries actually have hybrid models and not a pure single-payer model. I would argue the ACA is directionally better for California and deserves support and building upon what already works for a vast majority of the state. California has faced single-payer before and we are in the long process that will continue for months. If you want to set a date for a follow-up, the bill will be set for hearing around July 14th in the Assembly Health Committee in Sacramento. Please join the discussion.

For now, it is still just a bill.