Sunday, May 28, 2017
California Democrats Are Hyperventilating Over Single Payer Healthcare
A modern cliché is that California leads the nation. Justice Brandeis wrote a century ago that states are the laboratories of democracy. If so, California’s Democrats are attempting to experiment with a single payer healthcare system. The California Senate will vote this week on S.B. 562, The Health California Act, and send it to the House. If enacted, the State California will become the payer of all healthcare costs California. It will lead the nation, as the final coffin is nailed on our once great private healthcare system. California has increasingly become a one–party state, with the Democrats controlling all state elected positions and a supermajority in both branches of the legislature. The progressive Sanders wing of the party is becoming the dominant force, pushing California ever-further to the left. They know no restraint. California thereby wishes to replace the cold, heartless, greedy capitalistic, profit seeking, but efficient, insurance companies with a cold, heartless, bloated, inefficient state bureaucracy. Three modern examples should show the failures of single payers. The first is the United States Veterans Administration. (VA). Second, the Indian Health Service has not received the same poor publicity as the VA, but its record is very poor. If we cross the Atlantic to England, we find that England’s National Health Service is the largest employer in England, but not noted for efficiency. Its rules “guarantee” an appointment on routine matters within 18 weeks! S.B. 562 proposal is both regressive and reactionary. The progressiveness speaks for itself. It’s reactionary as a reaction to the complaints and horror stories of insurance companies. Thus there are no cost controls built into the plan. All residents of California will be covered, including the undocumented and the homeless who will flock to California. No co-pays No more Medicare premiums/co-pays No out-of-pocket costs for covered services No deductibles Access to all providers No referrals required; i.e. no gatekeeper The plan will include medical, dental, vision, mental health, and nursing homecare. Lower prescription costs It’s truly “pie in the sky” The legislators are hyperventilating on the prospects of single payer. Or Are they hallucinating on medical marijuana? In true liberal legislation, the Legislature is unconcerned about costs. It thereby includes no provisions for financing the program. The Legislative Analyst estimates the cost of the programs would be $400 billion annually. Governor Brown’s proposed state budget for next year, which includes education, prisons, medical, entitlements and everything else, is $290 billion. The state estimates that it currently has access to, and thus can redirect, about $200 billion in healthcare revenues through Medi-Cal, Medicare, Obamacare subsidies, and public health funds. California spends $106 billion on Medi-Cal, of which $68 billion comes from the federal government. That leaves a deficit of $200 billion. No taxes are in the bill. Therefore, it does not need a super-majority to pass the Legislature. The legislature is supposed to develop “a revenue plan” in the future. Whenever! Estimates are that a 15% employment tax will be needed to fund the program. That 15% would be on top of the existing 15.2% federal tax. It will be a job killer in California. Passage in the House and Senate are essentially assured. The only question is if Governor Brown will sign or veto it. The last time California enacted a truly radical proposal was about 2 decades ago when it purported to deregulate electricity while ignoring all basic rules of economics. It mandated the private utilities sell off ½ their fossil fuel capacity. It deregulated the wholesale price of electricity while freezing, thereby regulating, the retail price charged consumers. The bill prohibited the three private utilities from entering into long term contracts with electricity suppliers. Instead, they could only buy a day forward in the wholesale market. The state had not built new generating facilities in over a decade while its population grew. The state had limited transmission capacity between Northern and Southern California. California’s electric supply was ripe for manipulation, which Enron and others quickly realized. A drought in the Pacific Northwest reduced electricity to California. Suddenly, in 2000-01 the state was hit with rolling blackouts. Pacific Gas & Electric entered bankruptcy while Southern California Edison came perilously close when the wholesale daily rates shot through the roof. California just might do it. Unlimited demand; no increase in supply. The powerful California Nurses Association is the sponsor of the bill. It says “You’re going to pay less and get better service, and your money’s worth.” Just like ObamaCare. A recipe for disaster. It will be quite an experiment. Californians may pine for the return of ObamaCare.