Despite, or perhaps because of, an aggressive last-minute push by progressive activists ahead of a crucial deadline, legislation to create a government-run universal health care system in California died Monday without coming up for a vote.
The single-payer measure, Assembly Bill 1400, was the latest attempt to deliver on a longtime priority of Democratic Party faithful to get private insurers and profit margins out of health care. Because it was introduced last year, when it stalled without receiving a single hearing, it needed to pass the Assembly by Monday to continue through the legislative process.
But even the threat of losing the party’s endorsement in the upcoming election cycle was not enough to persuade the Assembly’s Democratic supermajority to advance the bill for further consideration, effectively killing the effort for another year.
Assemblymember Ash Kalra, San Jose Democrat, in floor debate in January.
Photo by CalMatters
After several tense hours Monday afternoon, during which a scramble of meetings took place just off the Assembly floor, Kalra, the San Jose Democrat carrying AB 1400, announced that he would not bring up the measure for a vote.
Kalra declined multiple requests to discuss his decision and whether he would seek another path forward for his proposal. Following the floor session, he waited on a members-only balcony outside the chamber until a group of reporters was told to leave by a sergeant-at-arms.
“I don’t believe it would have served the cause of getting single payer done by having the vote and having it go down in flames and further alienating members,” Kalra said on a Zoom call with disappointed supporters later in the evening, in which he shared that he believed the bill, which needed 41 votes to pass, was short by “double digits.”
Stuck between powerful interests
The political obstacles to such a radical restructuring of the health care system remain enormous, even in a state as putatively liberal as California.
The influential California Chamber of Commerce, which represents business interests in the state, labeled AB 1400 a “job killer” shortly after it was reintroduced in January, indicating it would be a top priority to defeat. Its lobbying campaign — joined by dozens of insurers, industry groups and the associations representing doctors and hospitals — included social media advertisements and a letter to members denouncing the “crippling tax increases” that would be needed to pay for the system. After the bill stalled Monday, the chamber declared it would be ready if ideas from the “dangerous proposal” resurfaced.
Republicans were eager to make it into an election issue this year. Though Kalra’s bill was largely conceptual, with a separate measure introduced to address the financing, they attacked it as a massive tax hike on Californians. (Kalra proposed a series of taxes on businesses and high-earning households to fund the single-payer system, estimated by legislative analysts to cost between $314 billion and $391 billion annually.) A 4,000-page petition signed by voters who opposed AB 1400 sat in the back of the chamber on Monday for Assembly Republican Leader Marie Waldron of Escondido to use as a prop in a floor debate that never happened.
Democrats also faced a squeeze from the left flank of their party. Activists with the California Democratic Party’s progressive caucus said last week they would push to withhold endorsements from members who did not vote for the bill. That ultimatum generated fierce anger in the Assembly caucus from members who felt cornered, though many refused to speak publicly about their frustration.
Backlash from activists
The decision not to bring up AB 1400 for a vote on Monday may have been about protecting members from having to take a position one way or the other on the bill, as Assembly Speaker Anthony Rendon did with the last single-payer measure in 2017.
Legislation to move the state toward a government-run health care system passed the state Senate that year, but was held by Rendon without a hearing because the bill included no plan to pay for it. That put him in the crosshairs of single-payer supporters, who blasted him on billboards.
This time, Rendon said he supported the effort, but he was not closely involved in rounding up votes for AB 1400. He declined to answer questions after the floor session on Monday and, in a statement, he pushed the blame onto Kalra.
“The shortage of votes needed to pass this bill out of the Assembly indicates the immense difficulty of implementing single-payer healthcare in California,” he said. “Nevertheless, I’m deeply disappointed that the author did not bring this bill up for a vote today. I support single-payer and fully intended to vote yes on this bill.”
The explanations are unlikely to assuage the measure’s most enthusiastic proponents.
The California Nurses Association, the main sponsor of AB 1400, slammed Kalra for “providing cover” for his colleagues by not holding a vote.
“Nurses are especially outraged that Kalra chose to just give up on patients across the state,” the association said in an unsigned statement. “Nurses never give up on our patients, and we will keep fighting with our allies in the grassroots movement.”
Amar Shergill, chairperson of the California Democratic Party’s progressive caucus, said he would continue with plans to pull endorsements from Assembly members who did not publicly support the bill.
During the Monday night call, he and other advocates repeatedly criticized Kalra for setting back their movement and urged him to name the members who were opposed. “We are protecting them from negative scrutiny of a ‘no’ vote,” Shergill said.
Kalra said it would give him more time to work on winning over colleagues who were on the fence about AB 1400 and try again next year.
Where was Newsom?
One prominent Democrat who did not express support for AB 1400 was Gov. Gavin Newsom, who ran for office in 2018 on a platform to create a single-payer system in California but has since distanced himself from that pledge.
During a press conference in January to unveil his budget proposal, Newsom reiterated that he believed “the ideal system is a single-payer system,” but dismissed questions about Kalra’s approach.
“I have not had the opportunity to review that plan, and no one has presented it to me,” Newsom said at the time.
As AB 1400 marched toward defeat, the governor remained mum. His public remarks in recent weeks focused instead on several of his own budget proposals that he said would bring universal health access to California, including an expansion of Medi-Cal, the state’s health insurance program for the poor, to all residents regardless of their immigration status.
The distinction he has drawn between universal access to health insurance and an actual universal health care system has infuriated the nurses’ union, one of his earliest endorsers during the 2018 campaign, who accused him of flip-flopping on single payer. It seems unlikely to cause him much trouble in his upcoming re-election campaign, however, where he has yet to draw a significant challenger.
Alexei Koseff is a reporter with CalMatters.
Better Title would be:
“Unaffordable, Unrealistic, and Unpopular Bill to Destroy Healthcare System Dies a Lonely Death”
–
———-Rhetoric Vs. Reality: Americans Oppose Medicare For All Tax Hikes————-
Polls show that most Americans Oppose “Medicare For All” once they learn
it would force Americans to pay Higher Taxes.
A national poll by the Kaiser Family Foundation revealed that:
-60% of Americans Oppose it when they learn it would require Most Americans to pay Higher Taxes,
-70% Oppose Medicare for all when they learn it would “Lead to DELAYS getting some medical tests & treatments”
-60% Oppose it when they learn it would Threaten the already at-risk Medicare program,
and
-58% Oppose it when they learn it would ELIMINATE Employer-Provided and other private coverage.
Polling also shows that a MAJORITY of Americans are SATISFIED with their
CURRENT Coverage & Care –
and they don’t want their choices taken away.”
go back and look at the Newsom French Laundry picture and see who he is eating dinner with…
everything you need to know who and how this died on the floor
giving Kalra credit is far too generous to his prudence
Whoever wants to implement single payer is on a right side of the history. It is long pass time to give all citizens what every other civilized country already have and enjoy. Questions of cost is valid thus implementation will require different approach to entire system including education of medical doctors. It is most ridiculous and longest education in history of medical profession all around the world. Then, there is extremely expensive delivery system. Therefore, serious attempt to do it will require overhaul of the entire aspect of medical services starting with education and ending with system that is fully computerized under one management. Yes, there will be some unhappy who will claim that we have the best and we are screwing with it. Simple answer is, for all of these who can afford it, let themselves buy supplemental on a the open market. There will always be unhappy and there will always be open market. Good luck.
Pretty sure this had more to do with the inability to find enough corporations and 1 percenters that they could take another $391 billion in taxes from every year. To put that number in perspective that is encroaching on almost double the existing entire budget for the entire state for a year that the corporations and 1 percenters are already paying. Looks like the crazies figured out the numbers just didn’t pencil out… It’s kind of a sad day because I actually would like to see free healthcare for everyone. The epiphany everyone just had was that there’s no way to pay for it and there never will be in California or even for the federal government. Oh well, let’s focus on something else we can do something about like putting criminals back in jail, improving our schools, getting homeless off the streets by housing them in institutions where they can get proper treatment for their mental illness and drug addiction.
Well, maybe, just maybe, there is a modicum of common sense remaining in some of the Dem-Leftist-reactionary-social-justice-warriors in Sacramento who we euphemistically call lawmakers. Or as I like to call them: fundraising, poll reading, intersectional rump kissers who pander for votes.
Part 1: American Healthcare: You Don’t Get What You Pay For
For those who question whether California (or the U.S.) should have a single payer health insurance system, I would recommend you have a look at Exhibit 4 in the most recent Commonwealth Fund report. That picture illustrates the irrationality and insanity of the U.S. healthcare system in a global context, a system that combines the highest costs in the world with vastly inferior healthcare system performance relative to wealthy peers (https://www.commonwealthfund.org/publications/fund-reports/2021/aug/mirror-mirror-2021-reflecting-poorly). System performance includes access to care, administrative efficiency, equity and, most importantly, health care outcomes–are populations healthier as result of the health care system.
It’s as though Californians (and Americans generally) have been grocery shopping at 7-11, paying inflated prices for junk food while the rest of the world has been shopping at COSTCO where they get more food of higher nutritional value and pay a much lower price per unit. Anyone who is not on the payroll, or under the influence of, private insurers, hospitals, drug companies, ideologically-motivated neoliberals (e.g. like California’s political echelon) or libertarian bots, will tell you that a single payer system is the least costly and most effective healthcare solution for the tens of millions of Californians (and hundreds of millions of Americans) struggling with inadequate healthcare services and its unconscionable human and financial costs. Even the U.S. Congressional Budget Office confirmed the lower costs associated with the total coverage of a single payer system (https://www.cbo.gov/system/files/2020-12/56811-Single-Payer.pdf)
AB 1400 (CalCare) would have established a public healthcare insurance system that would allow every Californian to choose the healthcare provider(s) they want (including those they have presently) anywhere in the state. No more “in-network” or “out-of-network,” only the sum total of all California providers available to all. It would have eliminated all premiums, deductibles, co-pays, co-insurance and other out-of-pocket costs, as well as enrollment periods (everyone would be permanently enrolled). CalCare would have expand health coverage to all necessary medical care and procedures including vision, hearing, prescription drug and devices, mental health and long-term care.
For the 3.2 million Californians who have no health care coverage at present, it means complete coverage. For the 5 million underinsured Californians (for whom out of pocket costs account for more than one-tenth of household income) it means massive financial and health care access relief. For the 31 million insured Californians (including 6.5 million Medicare beneficiaries and 14 million MediCal beneficiaries) it would mean an expansion of benefits and the elimination of premiums and co-payments and a fundamental simplification of access and administration.
For everyone, it means less costly, less complicated and more readily accessible health care. In other words, it means we would all be relieved of bureaucratic burdens and costs imposed by the government-sanctioned profit models of private insurance, private hospital and drug corporations. This would allow patients and health care providers to focus on improving health, what should be the only task of the health care system.
(See https://a27.asmdc.org/ab-1400-ca-guaranteed-health-care-all-act; https://laborcenter.berkeley.edu/undocumented-californians-projected-to-remain-the-largest-group-of-uninsured-in-the-state-in-2022/; https://www.goodrx.com/insurance/health-insurance/insured-vs-underinsured; https://www.kff.org/medicare/state-indicator/total-medicare-beneficiaries/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D; https://www.dhcs.ca.gov/dataandstats/Pages/Medi-Cal-Eligibility-Statistics.aspx; https://www.chcf.org/publication/2021-edition-medi-cal-facts-figures/#related-links-and-downloads.)
Part II: The Single Payer Will Have the Receipts
If California’s share of total U.S. healthcare expenditures is 11.5%, as estimated in 2014, then current expenditures can be estimated at about $471.5 billion in 2020 (https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NHE-Fact-Sheet; https://khn.org/news/article/new-single-payer-bill-intensifies-newsoms-political-peril/). That’s almost a half-trillion dollars annually and includes all payments by private businesses, households and non-profit institutions for private health insurance premiums, deductibles, co-payments, co-insurance plus direct payments to hospitals, medical professionals, pharmaceutical and medical device companies and other providers. It also includes all public expenditures on behalf of Medicare and Medicaid beneficiaries (including the Children’s Health Insurance Program); the federal subsidies paid for Obamacare private insurance plans; the funds expended by the state, the counties, the municipalities and the public universities and colleges and school districts on directly providing health care services and to insuring the health of their employees.
Federal, state and local government healthcare expenditures–that is public sector healthcare expenditures–on behalf of Californians accounts for about 70% of all healthcare expenditures in and for the state’s residents (https://pubmed.ncbi.nlm.nih.gov/27845515/). The remainder is borne by private businesses, households and non-profits. By consolidating insurance funding sources and vastly reducing and simplifying administration, the single publicly-administered CalCare health trust fund would unify and standardize fees and prices paid to providers and streamline the payments system. It would be akin to a combined, improved and expanded Medicare and MediCal fund able to pay healthcare providers on behalf of all Californians. That would save tens of billions of dollars each year while expanding coverage to the more than 3 million Californians who are currently uninsured.
Pooling all the public sector funds spent on healthcare in California, as noted, would cover about 70% of healthcare expenses. The remainder would come from a set of new payroll, sales and income taxes, all progressively structured, such that the burden would be distributed according to ability to pay. Revenues from those new taxes would be added to the pooled public funds in the single publicly administered CalCare fund (https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220ACA11).
But the key to understanding healthcare financing under CalCare is that all private insurance premiums and the vast bulk of out-of-pocket medical expenses would be eliminated, resulting in massive savings to businesses, households, governments and non-profits across the board. These savings–-conveniently and purposely overlooked by libertarian bots (like Parrot, Not Him, Smith and HB), the neoliberal Democrats who dominate the political echelon and the commercial media–-are actually larger than the new taxes proposed by CalCare.
To repeat, CalCare would eliminate expenses to businesses, households, governments and non-profits in excess of what those entities will pay in new, progressively structured and dedicated taxes. The health expense savings are greater than the new taxes that will be paid, resulting in a net reduction in total healthcare spending for everyone, except for the wealthiest households and the largest businesses and corporations. For 90% of households and businesses, there would be a real reduction in what they spend on healthcare–they will experience higher savings rates from current income all other things being equal.
These savings are derived from the massive buying power–referred to as “monopsony” power in economics–of the publicly-administered CalCare fund. As that fund will be paying for all necessary healthcare for all Californians, the fund’s buying power counterbalances the entrenched selling power–“monopoly” power–of the consolidated for-profit hospital systems who charge patients an average 400% of the actual costs of providing care (https://www.nationalnursesunited.org/press/new-study-hospitals-hike-charges-18-times-cost); counterbalances the monopoly power of prescription drug companies who charge Americans about 256% more than what they charge people in other countries for the same drugs (https://pharmanewsintel.com/news/us-prescription-drug-prices-256-higher-than-other-countries); and counterbalances the pricing power of nursing homes and assisted living facilities who charge exorbitant fees in this state (https://www.medicaidplanningassistance.org/nursing-home-costs/). Bargaining power allows CalCare to eliminate pricing irrationality, the over-treatment of patients, fraud and abuse.
The other source of savings stems from the elimination of insurance company bureaucracies and human resource department bureaucracies of businesses, governments and other institutions that are presently needed to administer complex health plans and to interact with insurance companies (including in doctors’ offices). Those bureaucracies are dead weight–they add no value whatsoever to health. Households, businesses (including doctors and other individual health providers), governments and non-profits who now spend an inordinate amount of resources, and endure the stress, of dealing with insurance company adjusters, will be able to save time and money from a greatly simplified system. They can focus on keeping people healthier or taking care of their core businesses.
Researchers estimate that at least one-fifth of total health care spending in the U.S. is unnecessary or wasted (https://www.chcf.org/wp-content/uploads/2020/01/GettingAffordabilitySpendingTrendsWaste.pdf; https://laborcenter.berkeley.edu/high-health-care-prices-are-the-primary-driver-of-california-workers-health-care-cost-problems/). Applying this ratio to California suggests there are about $94 billion in unnecessary expenditures each year. CalCare would radically and permanently reduce such waste. As the single payer, it will have all the receipts needed to contain costs and optimize healthcare delivery performance.
Dear Econoclast: would you like to make an offer on a bridge I have for sale in Brooklyn? Sure the taxes will be lower.??