For many years, one of the leading and most divisive political issues has been health care. Almost everyone agrees that the American health care system is too overpriced with far too little efficacy. While various reform efforts like the Affordable Care Act have had middling results, some governing entities like the state of California are considering a single payer system to rein in costs and grant coverage to all state residents.
California attempted to pass a single payer bill in the legislature in 2006 and 2008, but the bills were vetoed by Republican Governor Arnold Schwarzenegger, who argued that “socialized medicine” was not the solution. Much of the public used this designation to infer that the government would take over provider organizations, when in actuality, the proposed system would merely use a payroll tax to pay for insurance.
In the decade since the single payer model was first proposed, much has changed. With the introduction of the ACA-sponsored health insurance exchanges and the state’s expansion of Medicaid—which now covers almost one-third of the state’s population—the public has grown more comfortable with the idea of government involvement in health care delivery.
Trump Reform Efforts Driving New Initiative
Although the Trump administration’s initial reform effort, the American Health Care Act died before reaching the House floor for a vote, subsequent announcements that the White House and GOP lawmakers were still pursuing a viable reform package has spurred California legislators to once again push for a single payer system.
The primary motivation for this new effort is the potential loss of Medicaid coverage for millions of Californians. In at least one draft of the American Health Care Act, Medicaid funding would have been cut off by 2020. Medi-Cal is the largest Medicaid program in the U.S., covering almost 12 million residents. More than 4 million of these were enrolled following the ACA-funded expansion. Furthermore, the state has seen a 45 percent drop in uninsured following implementation of the insurance marketplaces.
President Trump has also affirmed his intention to use block grants to fund state Medicaid programs. In this framework, the federal government would provide one dollar for each dollar spent by the state. More importantly, a block grant would allow California to distribute funds as it saw fit, including funding a Medicaid-for-all program.
A 2005 analysis by the Lewin Group found that a single payer system in the state would help save the state almost $344 billion over 10 years by eliminating administrative costs and obtaining discounts for bulk purchases of drugs and medical equipment. The study also found that the state economy would experience a boost because companies would no longer be responsible for employee health coverage.
It will continue to be an uphill battle to enact a single payer model in California, primarily due to the resistance of the insurance lobby, but, in a state in which 54 percent of the population opposes ACA repeal efforts, there could be enough popular support to push a new bill through. In years to come, such a new law in the largest state could be a seminal event that reshapes American health care.
Article Written by: Robert Moghim, M.D., – CEO Moghim Medical Consulting Inc.