California: Single-payer is no Plan B if Obamacare is repealed

July 24, 2017 9:15 AM CDT BY MICHELLE KERN

California quickly embraced the possibilities of the Affordable Care Act (ACA, or Obamacare) and from it reaped more benefits to the state, its citizens, and its economy, than any other state, especially those who were slow to embrace the ACA. Now California is debating the merits and drawbacks of expanding on the other possibilities inherent in the ACA, including a single-payer health system. The pathway to single-payer, however, while already challenging, would face a much steeper climb if the ACA were repealed or transformed into “Trumpcare.”

From 2013 to 2015, the percentage of Californians without health insurance fell from 17.2 percent to 8.6 percent, a bigger drop in uninsured rates than any other state under the ACA

The impact on California if the ACA were repealed would include:

  • 209,000 lost jobs;
  • $20.3 billion lost in state GDP;
  • $1.5 billion lost in state and local tax revenue;
  • 7 million Californians enrolled in the Medi-Cal expansion would lose coverage;
  • 2 million individuals enrolled through California’s health benefit exchange, Covered California, would lose federal subsidies;
  • People who purchase coverage through the exchanges without subsidies would see their premiums double by 2026.

The ACA still leaves around 3 to 15 million people in California uncovered or underinsured, out of 39 million people.

Senate Majority Leader Mitch McConnell (R-Ky.) is determined to force another vote for straight repeal of the ACA in the present legislative session, so activists are keeping the pressure on Senators to vote no on repeal.

The most optimistic path for single-payer for California depends on the defeat of the ACA repeal, but even then single-payer would still face challenges. According to a 2013 report from advocacy group Public Citizen:

“The first step on a state’s road to a quasi-single payer system is to obtain a waiver from the ACA. This is well within reach because the act includes language that permits a state to receive a waiver from the ACA’s strictures, beginning in 2017. A state can be granted this waiver if it demonstrates that its alternative would provide coverage at least as good, for at least as many people, as the ACA would, and not add costs to the federal budget… For states that receive waivers, the federal government must provide funds to the state that equal what it would spend pursuant to the ACA. A state promising to provide comprehensive, universal care would easily clear this hurdle.”

These waivers, part of the ACA law called the 1332 State Innovation Waivers, would have an uncertain future if ACA were repealed.

SB 562 and the California single-payer movement

The issue of savings vs. costs is at the heart of the debate over the Healthy California Act (SB 562), the single-payer bill sponsored by State Senators Lara and Atkins, along with the question of how to fund a new public system. SB 562 passed the California Senate, but without details for funding. The bill, which was scheduled for a vote in the California Assembly in the recent legislative session, was parked in a committee in the State Assembly by Speaker Anthony Rendon.

This stall incurred some negative feelings among the bill’s advocates, but the bill would most likely have had to be placed on the ballot for 2018 in any case, since there is a tricky California budgeting law that would require voter approval. It is connected to with Prop 98, which requires 40 percent of the state budget be allotted toward education, and any changes to that number need voter approval. Speaker Rendon suggested the time could be used to write a plan to fill in the details on funding the bill.

A study by the University of Massachusetts-Amherst found the bill would save Californians $37.5 billion a year because they would no longer pay premiums, deductibles, or co-pays. That is distinct from what the bill would cost the state, however. California currently spends about $370 billion a year in health care costs.

Two studies estimated total potential costs of funding a single-payer system in California. One estimated a cost of $400 billion a year, another reported a $330 billion annual price tag. The UMass-Amherst study, which came up with the $330 billion number, estimates that the state would have to raise an additional $106 billion a year, while the analysis by the office of the bill’s co-author, Senator Ricardo Lara, says that $200 billion would have to be raised.

The present plan for SB 562 still depends on present government funding to pay $225 billion toward the total costs, which is currently allotted by law for programs like Medicare and Medi-Cal. Changing this system would require the federal waiver, and working to integrate a state system with Medicare and Medicaid. The law does not permit a waiver from these two programs, but does allot options for the administration of these programs and the power to alter the administration to “align billing systems and prices.”

If you are on Medicare, what does this mean?

Federal programs like Medicare and Medicaid (Medi-Cal) could be merged into the single-payer plan. But there’s no guarantee the Trump administration would approve such a change, even providing ACA is not repealed.

Furthermore, as reported in The Press-Enterprise: “Any single-payer system in California would likely rely on federal money for Obamacare, Medi-Cal and the Medicare program for seniors. If that money’s cut through the Obamacare repeal, it means the state would have to find even more money to fund a single-payer system.”

However, Robert Pollin, a co-author of the UMass-Amherst single-payer analysis, writing for The Intercept, counters: “Right now, federal, state and municipal financing covers about 70 percent of all health care expenditures in California. Existing federal law requires the federal government to continue providing this current level of spending even if a state organizes its own health care system… It is true that the Trump administration, or any other federal administration, may attempt to violate the law. But if one supports single payer, why would one assume right off the block that existing laws will obviously be abrogated and that California will have no recourse when this happens.”

If federal law requires that the present level of funding be maintained, with or without the ACA, then legal challenges to any violation of the law would certainly be justified. It is unclear, however, if a repeal of the ACA would preserve the federal law that requires that present funding levels to be maintained. If, for example, a repeal removes the increased eligibility for Medicaid expansion, that would eliminate the funding for people no longer able to be covered legally under the ACA.

How to pay for a new state-based single-payer system?

The proposal to address that $105-200 billion single-payer cost shortfall not covered by federal funding (assuming current levels are maintained) is a new tax: “[Sen.] Lara office’s analysis says one way to raise the $200 billion would be a 15 percent payroll tax. The UMass-Amherst analysis suggests a 3.3 percent payroll tax or a 2.3 percent gross receipts tax on businesses, combined with an additional 2.3 percent state sales tax.”

Analysis from advocates for the Healthy California Act suggests that costs would be reduced for all employers who offer any health insurance plans for workers, with savings as high as 13.4 percent for employers with 10-19 employees, or 22 percent for employers with 0-9 employees who currently offer health insurance plans for workers.

Households likewise are estimated to save, especially middle-income families (those earning approximately $62,300 per year) who would save about 2.6 percent if insured by employers, but as much as 9.1 percent if self-insured. The only group liable to spend more on health insurance would be households in the top 20 percent income brackets (those with annual incomes of approximately $227,600), who would pay between 1.5 and 1.7 percent more for health care.

Other potential funding streams in California could also be found: An oil extraction tax (potential of $1-2 billion a year if passed) and repealing the Prop 13 corporate loophole, which costs California $9 billion a year in taxes are just two ideas that haven’t entered the conversation yet.

There is also the revenue that might be coming in from cannabis legalization, although that runs into different issues since it is on an entirely cash basis, but sales are projected to bring in $1 billion in state and local taxes. This would still leave a funding shortfall that would have to be filled another way.

Any proposals to raise taxes in California need a two-thirds majority vote in the legislature, which is just the margin that the Democrats currently have. California just levied at new gas tax for transportation and infrastructure which is very unpopular, running 58 percent against among Californians.

Single-payer in California is a more popular concept, but there was a drop in support from 65 percent to 47 when reports emerged declaring the fact that new taxes might be a source of its revenue.

Support for the ACA in California, meanwhile, has risen to an all-time high of 65 percent, with 26 percent opposed, and 9 percent undecided, in the face of attacks on it from the GOP. Building on the unprecedented new support for the ACA, as well as its legal structure supporting a future for more social sharing of health costs, should be on the roadmap to expanded single-payer healthcare for Californians.

Via People’s World

At town halls during Congressional recess, Californians urge support for Affordable Care Act

February 24, 2017 12:49 PM CST By Marilyn Bechtel

OAKLAND, Calif. – Amid the nationwide wave of town hall meetings during the Congressional recess, many gatherings and actions have been held across California, with saving and improving the Affordable Care Act high on the agenda.

California has been a leader in implementing all aspects of the health care law.

More than one-third of Californians – and 60 percent of the state’s children – are now covered by Medi-Cal (the state’s Medicaid), while another 1.4 million are covered through the state’s exchange, Covered California.

Worry about losing their coverage animated many of those participating in a Feb. 21 town hall with U.S. Representative Tom McClintock, R-Elk Grove, one of the few California Republicans hosting town halls. The gathering drew some 900 people, who also expressed their concerns about the environment, education and other issues.

The scarcity of town halls hosted by Republican representatives aroused the ire of many constituents.

In the Central Valley city of Modesto, several hundred gathered at a constituent-organized town hall to demand that U.S. Rep. Jeff Denham, R-Turlock, oppose ACA repeal unless an even better plan replaces it. Denham was not there, though he sent a representative to  listen to the discussion. So far he has not scheduled a town hall on the topic. Nearly 110,000 people in his district would lose their coverage following repeal, the great majority of them having gained coverage through the Medi-Cal expansion.

In southern California, Rep. Darrell Issa, R-Vista, angered many constituents by failing to show up for a Feb. 21 town hall on the repeal of the health care law, despite “missing person”-style posters reading “Last Seen in Washington supporting President Trump,” and a full-page newspaper ad published the previous week, inviting him to the town hall.

Other districts represented by Republicans, especially in the heavily-agricultural Central Valley, also have large numbers of people covered under the ACA. Rep. Kevin McCarthy, R-Bakersfield, the House Majority Leader, represents one of them.

On a more positive note, Rep. Barbara Lee, D-Oakland, joined Alameda County Supervisor Wilma Chan in holding a town hall here Feb. 18, which drew an overflow crowd of more than 1,000 people. Health care was a major issue, along with immigration, racial issues and women’s rights.

In an interview, Lee told Oakland North that it is important for people to hear from others who have benefited from the ACA and how they would be impacted by repeal. “Second of all,” she said, “it is important for people to know that we are together in this resistance movement against this anti-American backwards Trump agenda.”

House Minority Leader Nancy Pelosi, D-San Francisco, also held a town hall Feb. 18, where she was joined by California Secretary of Health and Human Services Diana Dooley and the CEO of S.F. General Hospital, Dr. Susan Ehrlich.

Three members of Congress in nearby Contra Costa County – Reps. Mike Thompson, Jerry McNerney and Mark DeSaulnier – joined in hosting a town hall in Martinez on Feb. 18, with saving the ACA at the top of the agenda.

California mayors announced their own Feb. 22 Mayors’ Day of Action in a press release signed by the mayors of San Francisco, Union City, West Sacramento, Los Angeles, Santa Barbara, Oakland, Davis and San Jose. The actions focused on virtual phone banks to members of Congress. The mayors said “staggering numbers” of Californians have benefited from the ACA, and added, “When we work together, Californians can accomplish great feats. We’re confident that standing together, we can save the ACA.”

The California Pan-Ethnic Health Network (CPEHN) says over two-thirds of Californians covered under MediCal are people of color), with every racial/ethnic group experiencing increased coverage since 2013. Latinos make up half those enrolled in Medi-Cal, while coverage has more than doubled among Asian/Pacific Islanders and risen by one-third among African Americans.

CPEHN warns that “Proposals to drastically change Medi-Cal by eliminating the Medi-Cal expansion for example, would significantly harm low-income communities overall with particularly negative impacts on Latinos, Asian/Pacific Islanders and African Americans.

An analysis by the University of California/Berkeley’s Labor Center says California also faces major economic consequences under a partial repeal of the ACA. Besides the loss of coverage by millions now covered by Medi-Cal, and the loss of federal subsidies helping those covered through the exchange, the state would lose $20.5 billion in yearly federal funding for the expansion, and more than 200,000 jobs would also be lost, the majority of them in the health care industry.

No wonder that back in December, Health Access’ Tam Ma told a Sacramento symposium on the Affordable Care Act, “It would be hard to imagine going back to a world without the consumer protections and financial support provided through the ACA and our other health care programs.” And Anthony Wright warned participants to prepare not just for a sprint, but also for “the marathon ahead.”

Via People’s World