SB 562 would replace private insurance and cover all Californians, but doesn't identify a source of funds.
This story originally appeared in California Healthfax.
As federal lawmakers push to repeal the Affordable Care Act (ACA), a state senator has introduced legislation to establish a single-payer healthcare system in California.
Sen. Ricardo Lara (D-Bell Gardens) introduced Senate Bill 562, which would establish a "universal, single-payer healthcare program" that would replace private insurance with a public plan run by the government.
Lara introduced the bill as debate continued in Congress on proposals to repeal and replace the ACA.
"The health of Californians is really at stake here, and is at risk by what's being threatened in Congress," said Lara. "We don't have the luxury to wait and see what they are going to do and what the plan is."
Senate Bill 562 is sponsored by the California Nurses Association, which said the bill will "set a standard for America and be a catalyst for the nation."
Details of the bill will be worked out during the 2017 legislative session, Lara said.
SB 562 does not identify a source of funding for a single-payer system but states that the intent of the bill is to "establish a comprehensive, universal, single-payer healthcare coverage program and a healthcare cost control system for the benefit of all residents of the state."
Lara introduced his bill a few days before federal lawmakers in the House of Representatives unveiled an ACA replacement plan that would allocate a set amount of Medicaid funding for each state under a block grant system and reduce the federal contribution toward Medicaid expansion from 90% to 50%.
The ACA replacement proposal would result in California losing about $8 billion of the $16 billion it currently receives from the federal government to fund Medicaid expansion, according to consumer advocacy group Health Access California.
"While they promised not to pull the rug out from under anyone, their plan would cut $8 billion from Medi-Cal, imperiling the coverage of the over 4 million Californians who got coverage under Medicaid expansion," said Anthony Wright, executive director of Health Access California.
'Single-Payer Systems Don't Work'
Although single-payer systems sound good in concept, they are much harder to implement, policy experts said. "Single-payer systems don't work, period," said Micah Weinberg, president of the Bay Area Council Economic Institute.
"To make it a reality, you need everyone to take the money they spend on premiums and put that into a single payer system, and that doesn't work in an economy where the majority of people have employer-sponsored health coverage."
Weinberg points to a failed effort in 2014 to enact a single-payer system in Vermont, where state officials dropped the plan when they could not figure out a way to fund it.
"If you can't do it in a state that is essentially a socialist state, with fewer than 1 million people, how is it going to work in California?" said Weinberg.
"A single-payer program in California would be on a much larger scale, and scale always makes things more difficult."
Countries with single-payer style systems make it work by paying healthcare workers much lower wages than those paid in the United States, Weinberg added. "In order to make it work, you would need employees to take major salary cuts," said Weinberg.
"That alone would make any single-payer health system bill a tough sell."