California Readies Single-Payer Plan in Preparation of Obamacare Repeal

March 1st 2017

Dave Fonseca

The Golden State is taking President Donald Trump's rhetoric on health care to heart, and planning accordingly.


Less than one month after the president signed an executive order encouraging Congress to promptly repeal the Affordable Care Act, two California state legislators are proposing a backup plan to provide health insurance to every resident of the state. 

As the Los Angeles Times reports, the "Healthy California Act" would make California the first state to offer a "single-payer" plan, under which a tax is imposed on residents in exchange for providing everyone coverage through a state-run plan. 

The bill's sponsors, Democratic State Senators Ricardo Lara and Toni G. Atkins, noted in a joint statement that the bill comes in response to uncertainty about the future of the Affordable Care Act, but also Trump's executive order calling for "greater flexibility to states and cooperate with them in implementing health care programs.”

California has twice before passed "single-payer" legislation, in 2006 and 2008, but the bills were shot down by Republican Gov. Arnold Schwarzenegger. 

With a Democrat, Jerry Brown, now in the governor's office, the lawmakers appear to think now is the time to strike.

California Gov. Jerry Brown

“We need to have this conversation now while hundreds of thousands of people are speaking out in support of health care,” Lara said in his statement. “With Republicans on the brink of rolling back health care it’s time for California to lead. I look forward to bringing a bill that Californians can support and the governor will sign.”

Cost has been a sticking point in the debate over California's past attempts to implement single-payer, with critics noting a 2008 report by the state's Legislative Analyst's Office that found implementing such a plan would put the state in a $42 billion hole during it's first full year of operation.

Attempts to institute a single-payer plan in Vermont faced similar cost-related concerns back in 2014, with Gov. Peter Shumlin, a Democrat, arguing the tax levies needed to pay for the system "might hurt our economy," Politico reported. The effort ultimately stalled.

But single-payer advocates say those costs should not be a deterrent to instituting single-payer, as they believe a state-run plan would provide patients with better access to preventative care while allowing the state of California — the world's sixth largest economy — to use its bargaining power to bring down the cost of drugs and health services. And a healthier population would produce less of a health care burden in years to come.

"Health care inflation is killing us, and it must be harnessed immediately. The financial burdens of wage earners are killing them (sometimes literally), and they must have immediate relief from the financial hardships caused by their health care needs," Dr. Don McCanne, M.D. of Physicians for a National Health Program, wrote at the time of the LAO report. That report, he said, "confirms that single payer provides the financing structure that we need, and enacting it has become an emergency."