California State Senate Rejects Single-Payer Health Insurance Option

California’s state Senate Democrats, dreaming of becoming the first state in the union to adopt a single-payer health care plan, failed to get the 21 votes they needed today putting the effort in doubt for at least another legislative session
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The bill failed on a 19 – 15 vote primarily because four Democrats abstained while another voted “no.” The measure didn’t receive any Republican support as expected. While the legislation received ample ballyhoo from proponents, the fact is the bill had no funding mechanism making implementation dubious at best given the projected $250 billion cost. Supporters suggested today that if the bill had passed, the concept would have had to go before voters to approve the money necessary to run the program. That effort, too, would be fraught with danger given California’s budget mess and Governor Brown’s recommendation for more tax increases to try and close the state’s deficit.

Health Care For All – California, the organization that has pushed single-payer plans for more than a decade, describes the program this way:

• Single payer financed health care is a cost-effective method for financing and administering a universal health system.
• With a single payer system California establishes a health plan that covers all residents. The plan replaces all health insurance plans, both public and private.
• The plan is administered by a single State Health Agency with local branches.
• The plan is financed by state health taxes and federal money that now goes to health care, such as Medicare and MediCal.
• All money earmarked for health care goes into a single state health trust fund.
• Consolidation of administration and finance saves billions of dollars. Cost of administration drops from 25%-35% of health spending to 2-3%.
• The state becomes the single purchaser of pharmaceuticals and durable medical equipment. It uses bulk purchasing power to lower costs up to 50% by purchasing from the Federal Supply Schedule. This saves billions. The state coordinates capital expenditures. This also saves billions.

Opponents of the California Senate Bill 810 disagree with Health Care for All on every point. Senate Republicans argued during debate leading up to the vote that rather than save the state money, a single-payer program could break the back of a state already reeling in debt.

Single Payer health care programs emerged in several states in the 1980s, but never came to fruition and then the California legislature took the case to voters in 1994 just months after the Clinton administration’s health care initiative dies and voters overwhelmingly rejected the idea.