Most Recent Attempt at Establishing Universal Single-Payer Healthcare in California Fails Again
Assembly Bill 2200, better known as the Guaranteed Health Care for All Act, which seeks to establish a universal single-payer healthcare system called CalCare has once again failed. Assemblymember Ash Kalra’s newest attempt at a single-payer bill is the most current in a long line of attempts to secure universal healthcare for Californians.
In 2022, we wrote about Assembly Bill 1400, a single-payer universal healthcare bill that would see coverage expand to every resident within the state of California. 2022 was not the first time, nor the last, that state legislatures would attempt to pass this type of bill. Beginning in 1994, California has attempted to secure equitable universal healthcare in the state through six separate bills that have all failed. Since its inception in the mid-nineties, with 73% of Californians rejecting the system, it has gained traction with a broadening support base that is sponsored by the California Nurses Association. Despite its rise in popularity, continued efforts to pass a universal healthcare bill routinely fail with this year being no exception. The closest the state has come to passage of a universal healthcare bill was during the 2007-2008 legislative session when it reached the desk of Governor Schwarzenegger only to be vetoed due to budgetary shortfalls.
Legislation follows Commission report
In August 2022, we reported on The Healthy California for All Commission (established in 2019 via Senate Bill 104) issuing a report on implementing single-payer unified financing, “Key Design Considerations for a Unified Health Care Financing System”, which the report asserted would lower healthcare expenditures in the aggregate as soon as the first year of implementation, creating a more efficient, affordable, and equitable healthcare delivery system. (Richard Scheffler, Advisory Board member to The Source, was a member of the The Healthy California for All Commission.) The Commission determined that under a single-payer model, with no cost sharing for patients and long-term care for all, California would save between $32 billion to $213 billion over ten years. The Commission recognized that the adoption of the unified financing would not reduce healthcare costs in the absence of ensuring stable and sufficient revenue sources and controlling costs. They didn’t reach consensus on the precise design of the system, which was beyond their mandate.
Details on the 2024 legislation
AB 2200 would have created the California Guaranteed Health Care for All program to provide comprehensive universal single-payer healthcare coverage and a healthcare cost control system. The bill would have created a board of nine voting members to govern the system, an Advisory Commission on Long-Term Services and Supports to advise the board on matters of policy related to long-term services and supports, a CalCare Public Advisory Committee to advise the board on all matters of policy for CalCare, an Advisory Committee on Public Employees’ Retirement System Health Benefits to provide recommendations related to public employee retiree health benefits, and a CalCare Health Workforce Working Group to provide the board with input on issues related to healthcare workforce education, recruitment, and retention.
The bill would have authorized healthcare providers to collectively negotiate fee-for-service rates of payment for healthcare items and services using a third-party representative, and would have required the board to annually determine an institutional provider’s global budget, to be used to cover operating expenses related to covered healthcare items and services for that fiscal year. The bill would have stated an intent to enact legislation to develop a revenue plan, creating the CalCare Trust Fund consisting of any federal and state moneys received for the purposes of the act.
History of similar legislation
In the past, similar bills were struck down by opponents, insurers and industry associations for medical practitioners, for a variety of reasons. Concerns surrounding the system’s effect on the healthcare job market and tax rate hikes continually stood in the way of passage. In 2021, Kalra decided against bringing AB 1400 up for a vote out of fear of pushing the topic on fellow assemblymembers that could lead to possible alienation. Similar to 2007, this year’s attempt was once again thwarted by budgetary deficits and the need for legislators to make difficult calls on prioritization for Californian residents. Assemblymember Buffy Wicks, a co-author of previous universal healthcare bills, noted the CalCare’s estimated $392 billion budget as her main objection. As the state grapples with projected budgetary deficits over the next couple of years it is having to add increasing numbers of bills to its “suspense file” where bills are held over. Kalra noted, despite financial fears, that research demonstrates single-payer systems have the potential to “prevent future deficits and boost economic growth.”
Implications for the future
Although initial costs would be higher than current expenditures on state healthcare, in the long run a universal healthcare system could lower overall spending. Proponents of CalCare estimate that significant savings could result from reductions in administrative fees, reduced drug costs, and fewer billing expenses for provider reimbursement. Despite its pro-fiscal elements, providers note that the financial feasibility hinges on a provider’s decision to accept CalCare patients which continues to be a hot-button issue as Medi-Cal reimbursement rates in the state remain contentious.
A single-payer, universal system would allow for a comprehensive healthcare reform that would ensure equitable care and health justice for all Californians. While concerns over funding and its impact on reimbursement rates remain unclear, proponents praise CalCare’s ability to provide an essential need that would be the first of its kind in the country. Stay tuned as we monitor future single-payer healthcare bills in the coming years.