California’s Single-Payer Healthcare Plan’s Price Tag is Twice the Current State Budget
“This is the gigantic brick wall…”
The last time we ran an “insanity check” on the state of California, our state’s legislators were laying out plans for a single-payer healthcare system.
Subsequently, the state’s money crunchers processed the numbers and the price tag is twice the state’s annual budget!
Creating a single-payer health care system in California would cost $400 billion a year — including $200 billion in new tax revenue, according to an analysis of legislation released Monday by the Senate Appropriations Committee.
The projected cost far surpasses the annual state budget of $180 billion, and skeptics of the bill say the price tag is “a nonstarter.”
Half of the $400 billion would come from existing federal, state and local spending on health care. An additional $200 billion would have to be raised by imposing a 15 percent payroll tax on California employers and employees, the analysis found. But the cost of the new tax would be partially offset by reduced spending on health care coverage by employers and employees — which is how nearly half of Californians receive health insurance.
“This is the gigantic brick wall that everyone who was paying attention was letting us know we were about to run into,” said Micah Weinberg, a policy researcher and president of the Bay Area Council Economic Institute.
Of course, that is not going to stop California’s Democratic politicians from proceeding.
At Monday’s committee hearing, a host of pro-business groups and insurance providers said the bill would devastate the state’s economy, but Democratic state Sen. Ricardo Lara defended the measure and said that a financing plan is in the works.
“Our goal is to bring back a bill to this committee with the financing structure in place so that we can have it fully debated and fully discussed with the opponents and proponents,” said Mr. Lara, the bill’s co-sponsor, saying he would bring it back “once we get more of the details organized.”
We have already seen the classless demonstration of hostility to President Donald Trump from the California Democrats at their recent state convention. Proving that the radicalized wing of the Democratic Party base is completely out of control, single-payer activists have been disrupting the convention.
…Hundreds of advocates organized by the California Nurses Association stormed into the convention as it began Friday night and shouted down a greeting by Sacramento Mayor Darrell Steinberg.
Speeches by U.S. House Minority Leader Nancy Pelosi and state Assembly Speaker Anthony Rendon were interrupted on Saturday.
Nursing union director RoseAnn DeMoro warned Democratic officials not to assume activists will stick with them if they oppose single-payer health care.
State party chairman John Burton chastised the rowdy advocates, telling them single-payer is hardly a controversial issue in the Democratic Party and asking them to be courteous.
The status of California’s single-payer plans was one of the topics I covered on Canto Talk, with host Silvio Canto and Dawn Wildman, Director of the Coalition for Policy Reform.
I will warn you ahead of time, because of discussion involves California Democrats, the language gets a bit salty.
As a palate cleanser from the California Democratic antics, we also feature the “Mom’s March for America“, a virtual event in support of American mothers and American culture that is slated for September 23. If you love the country, hate silly hats, and can’t stand aging & angry pop singers, then this event may be for you.
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Comments
The state of Vermont opened their own single payer health care plan in the late fall of maybe 2013 or ’14. The managers figured that since the population was small and not at all diverse, just maybe the plan could work as designed. By winter, the plan was broke for the usual reasons. California’s will just be bigger but “broker” faster.
Who was running the program? Bernie Sanders wife?
Their plan will work great, until they run out of other people’s money.
Prediction – The State will force people and businesses buying health Insurance to buy for themselves and one other person. Buy for your family? Buy for a second family who ‘cannot afford insurance’ as well.
California still has the illegal immigrant “welcome mat” out, so once single payer is in operation, all of Central and parts of South America will medical vacation to California.
Cal-exit will be the invitation of the rest of America –
I remember hearing from someone that you cannot have a first-world welfare state and open borders together. Sooner or later that model is doomed to fall apart.
I’ve got my popcorn ready. This is gonna be fun to watch.
Within two years of implementation they’ll be demanding that the rest of America follow their plan. That way Uncle Sugar can bail them out.
I predict that within two years California will be demanding that the rest of the U.S. subsidize their plan.
This may turn out to be a positive should California’s experiment prove to be the convincing evidence people need to realize that single payer WON’T WORK.
I’ve never liked this line of reasoning. No amount of ‘proof’ will ever disabuse these morons of the economic failures of liberalism and socialism. Detroit is testament to this. Hell, the entire history of the world is testament to this fact that collectivism is ‘unsustainable’. Lefties are incapable of rational thought or critical analysis.
You are absolutely correct. Their blind faith is so deep and impervious to logic that when the system fails, they can only respond with “it wasn’t done properly, it will work next time,” or “Bush/Trump/The Bogeyman caused it to fail.”
Or “It was underfunded.”
I agree with you that hard-core lefties are a lost cause. I’m hoping that the growing numbers of centrist voters who are moving into the single-payer camp will re-think it. As for California, they’re gonna do what they’re gonna do; rationality tends to play very little part in political decisions there.
There is not a sufficient quantity of “centrist” voters in California. Their “centrists” are raging socialists in the rest of the country. They have chosen to doom themselves, and it is up to the rest of the country to a) buy popcorn, and b) take whatever measures necessary, by any means necessary to protect themselves from the infection spreading.
To these democrats, only the INTENT matters. The reality of the finances is beyond their comprehension. I expect this to move forward with the speed of a high speed train!
The left evaluates each time bomb in isolation of the other time bombs. What could wrong?
Their advisor must be Alfred E. Neuman “What — Me worry?”
Keep in mind that if they say it will cost 400b that it will actually cost 800b.
Go for it and be sure to include all illegals for free.
Are there any sane,rational people left in california ?
there’s a couple of us…
as a native, it’s hard to let go.
“…he would bring it back “once we get more of the details organized.”
gotta get the smoke pots emplaced properly, and all the mirrors aligned, just so.
i predict this will w*rk out even better than Moonbeam’s High Speed Fail toy train boondoggle
Single payer will work, as long as healthcare costs are controlled [that’s price controls for those of you from Rio Linda]. Look, the problem with healthcare costs is not being addressed, by anyone; PERIOD, EXCLAMATION POINT!!!
When the State of California says that it would cost a single payer healthcare insurance system $400 Billion a year, at today’s prices, this is probably accurate. The $200 Billion dollars, in new taxes, needed to reach this number would come, largely, from the premiums now paid to private insurance companies. So, what is the difference if one pays Aetna or the State of California for healthcare insurance? What is driving the cost of healthcare insurance is not greedy insurers, but the cost of healthcare.
The cost of healthcare services has risen from 2-6 times the cost of living increase since the early 1960s. And, it is now significantly higher than any other national healthcare system in the world. The main reason for this is third party payers who limit the out-of-pocket expenses of their members. First, this encourages the overuse of services, especially specialty services. Second, it encourages the provider to overcharge. Right now, the government(s) run two huge third party payer medical insurance systems, Medicare and Medicaid. These two systems, especially Medicare, has led to the continual rise of healthcare costs. By 2010, when the ACA was enacted, the situation had become so acute that almost everyone in the country needed healthcare insurance in order to afford healthcare. Otherwise, a simple heart attack would place one in debt for decades. And, nothing has changed. In fact, it has become even worse.
Yes, costs need to be controlled; the problem is that the only way to effectively do that is to nationalize the health profession and make all doctors, nurses, and associated staff government employees on a straight government salary. And then, as in Britain, you have to control costs by not spending valuable resources on long shots like the extremely old or the extremely sick.
It’s a pretty nasty system, and I don’t think people in this country would go for it. Certainly not after they got a taste for it.
People never seem to address the fundamental problem when health care is looked at from a supply and demand perspective. Aggregate demand for health care is effectively infinite – the more a given population has, the more that they want. Infinite demand with limited supply has the effect of perpetually increasing the price, until that price exceeds the ability to pay. Supply can never grow enough to meet demand in a society structured in the way our is, so as a society, we have 3, and only 3 choices –
Choice 1) allow prices to rise until enough people are forced out of the system that it stabilizes;
Choice 2) artificially limit demand by restricting what services will be paid for, and for how long, or
Choice 3) artificially limit price through government action, which necessarily will limit supply.
None of those choices are things we want to do, and yet one of those choices has to be made. That’s our problem, in a nutshell.
You win the cement bicycle.
To clarify your choices, they are
1): Do nothing and wait for the system to collapse under its own weight
2): Limit the medical services requested by the consumer, through government action, which will reduce healthcare insurance costs to consumers
3): Set price controls on healthcare services, through government action, to reduce healthcare and healthcare insurance costs.
But, there is a fourth option. Simply cease all government participation in the healthcare insurance system. This will force the healthcare and private healthcare insurance system to adjust through normal market forces.
However, all of these options lead to the same destination. Millions of people will lose their healthcare insurance, leaving some people unable to afford medical care above initial emergency care. And, that will result in politicians losing their jobs.
So, the only politically acceptable option os option 1. Let it ride and until you are forced to do something about it. Then look for socialized, government funded and controlled healthcare.
But, the problem with healthcare costs is not the normal supply and demand market forces. The problem is third party payers, particularly government funded third party payers. Private assurance companies pay claims using money from their pool of premium paying clients. So, they are very concerned about costs. Governments, on the other hand, are actually using money from the far greater pool of taxpayers. Also, they generally view social welfare programs as a means to gain reelection, not as a social safety net. So, the government is more interested in spending the money rather than remaining a viable business enterprise and making a profit.
California’s Single Payer system will be the High Speed Rail of healthcare.
But… but… but they already TRIED that in Vermont, Bernie’s home state. Did not end well.
“They just didn’t do it right.®”
Sustainable health care reform requires economic reform, moral reform, education reform, and functional markets.
Economic reform like Russia in 1918. Moral reform like in Nazi Germany.
In the UK which has had single payer sine post WW II there has been rapid growth in private sector healthcare markets, e.g., privately owned hospitals and consumer purchased health insurance. As Servo stated above “Choice 3) artificially limit price through government action, which necessarily will limit supply , and this is exactly what has happened in the UK. Delays imposed by the NHS medical upon patients in need of medical and hospital services have become unreasonable and unacceptable. Those that can afford it are opting out of NHS services and turning to private sector solutions.
The problem with a combination of private and public health care systems, is that practitioners gravitate to the much more expensive private system, which is not accessible except by the very rich. This reduces the level of service to the masses, below what it is presently. Eventually, general socialized medicine is established, within a country, which drives the practitioners out of the country altogether.
“State party chairman John Burton chastised the rowdy advocates, telling them single-payer is hardly a controversial issue in the Democratic Party….”
Burton’s statement merely illustrates the galactic-scale stupidity and insanity of Democrats: single-payer SHOULD be a controversial issue in their party.
Three well made points of why Government, both Federal and State involvement into Health care is a No-Win no matter what plan is laid out.
1. “And that will result in politicians losing their jobs.”
2. “Also, they generally view social welfare programs as a means to gain reelection, not as a social safety net.”
3. “government is more interested in spending the money rather than remaining a viable business enterprise and making a profit.”
It isn’t just healthcare, though it’s the largest and broadest national legislative action since 1938 but it applies to all self-serving elected on both sides of the aisle who suck at the tit of tax payer and so wants to stay the course for life.
Wouldn’t this be illegal under ObamaCare?
The replacement for Obamacare should prevent states from implementing Communist healthcare like what they are doing in California.