Bernie Sanders’ Single-Payer Proposal Puts Spotlight Back On California's SB 562

This article was co-published with Capital & Main.

Sen. Bernie Sanders (I-VT), with the co-sponsorship of 16 Democrats, has introduced a “Medicare for All” bill to replace America’s health-care system with a public system. The details are scant, but in broad strokes Sanders proposes covering everything – from emergency surgery to prescription drugs, from mental health to eye care – without co-payments. The Affordable Care Act’s market-based changes would be phased out as Medicare becomes the country’s insurer for everyone. While acknowledging that the bill would go nowhere in a Republican-controlled Congress, supporters hailed it as a starting point for discussions about the future of health-care reform.

The timing of the announcement is significant. Just weeks earlier Republicans failed to pass “repeal and replace” legislation in the Senate. The announcement also comes in the wake of a Kaiser Family Foundation survey showing that a majority of Americans—53 percent – favor single payer, the highest level of support the foundation has found since 1998. When called “Medicare for All,” 57 percent approved.

Sanders’ proposal also comes less than three months after state Assembly Speaker Anthony Rendon tabled an ambitious single-payer plan for California. The Healthy California Act, Senate Bill 562, would essentially eliminate private insurance companies, including giants Kaiser Permanente, Blue Cross and Anthem, and permit the state to contract with health providers and pay for health-care services. The bill passed the Senate on a 23-14 vote before it stalled in the Assembly in late June.

Single-payer advocates and health-care experts say Sanders’ proposal, with the support of a third of the Senate’s Democratic caucus, should inject new momentum for single payer in California, with its ostensibly friendlier two-thirds Democratic majority.

Michael Lighty, director of public policy with the California Nurses Association, a co-sponsor of SB-562 (and a financial supporter of this website), told Capital & Main that the increasing enthusiasm of Democratic U.S. Senators should light a fire under Speaker Rendon.

“The Democratic-controlled government of California has a responsibility to move this forward,” Lighty said. “Political will is the only thing standing in the way.”

In justifying tabling the bill in late June, Rendon said it lacked details about how to pay its estimated $400 billion price tag. Lighty said Rendon tabled the bill “without telling us. We were in the process of addressing his policy concerns and were going to put in a finance plan. All of Rendon’s objections could be addressed by regular order.”

The $400 billion sticker price was misleading, he said. He pointed to a study by the University of Massachusetts, Amherst and commissioned by National Nurses United that showed California currently pays $368 billion per year on health care. SB-562 would only cost the state $331 billion, saving approximately $37 billion. The study proposed new income taxes and a 2.3 percent sales tax to generate $106 billion in additional revenue.

Kaiser, insurance companies and business leaders have pushed back against SB-562. The California Chamber of Commerce also opposed the bill, calling it a “job killer” that would “result in significant new taxes on all Californians and California businesses.”

But public support for single payer in California is high. Two recent surveys showed 65 and 70 percent of people in favor, respectively. That support is somewhat soft, however. When coupled with the possibility of new taxes, support for single-payer waned.

Richard Scheffler, director of the University of California, Berkeley’s Global Center for Health Economics and Policy Research, said revenues for single payer could come in forms more palatable to the public.

“The state could use so-called sin taxes,” Scheffler said. “There could be a marijuana tax. It’s been a while since the alcohol tax was raised.”

Scheffler agreed that the $400 billion cost was overinflated and misleading. “When you have the state pick up the bill, there will be some savings, and the system will be more efficient,” he said. “You may have less opulent hospitals. Doctors may have to learn to live on $400,000 a year instead of $600,000.”

The 2018 race for governor will add momentum to the push for single payer, Scheffler said.

“Jerry Brown doesn’t want [a single payer bill] on his desk,” he said. “Health care is not his issue. But I think we will see all of the candidates in the Democratic primary getting on board with single payer.”

Gerald Kominski, director of the University of California, Los Angeles Center for Health Policy Research, said even more than Sanders’ bill, Republicans’ efforts to repeal the ACA have given single payer a big push in California and nationally.

“Support for single payer is a reaction to the very real threat that health care will be taken away from 20 million Americans,” Kominski said, adding that the Republicans’ repeal and replace plan “is really just repeal.”

Despite broad public support, advocates for single payer in California and nationally would be wise to craft their messaging to address how everyone could benefit and to bring Republicans on board, Kominski said.

“There has to be an honest discussion about the details and the many ways of achieving the same goals,” he said.

“People are always wondering, ‘What’s in it for me?’” he said. “And those with employment-based health insurance, who are generally happy with it, worry about being worse off under single payer. Advocates need to address that perception and show the many advantages they would enjoy.

“The momentum for single payer in California is there,” Kominski added, “but it’s going to be a real street fight to pass it.”