Earlier this month freshman Assemblymember Mariko Yamada announced her support and co-authorship of legislation introduced by Senator Mark Leno that would provide all Californian’s with universal health care.
Said Assemblymember Yamada during the press conference:
“The social work profession was one of the first in the nation to support single-payer, universal healthcare for all. I am honored to join Senator Leno in his efforts to reduce costs for California residents and businesses, and reinvest savings into patient care rather than profits.”
SB 810 is the latest incarnation of a bill first introduced by former Senator Sheila Kuehl that attempts to address one of the latest and growing crises in this state–the state’s health care crisis in which an estimated 7 million Californians are left uninsured. The crisis only continues to worsen as more Californians lose their jobs, and as a consequence, their employer-sponsored health care benefits.
Surveys such as those done by the Kaiser Family foundation have found that health insurance premiums grow annlually four times faster than wages and have rised 87% since 2000.
For those who believe the US has the best health care system in the world, there is no statistical measure that actually validates that argument. Right now, the US spends more on health care than any other industrialized country. We spent $2.5 trillion each year which is roughly 17.6% of our GDP. According to Health Affairs from February 2009, that is twice what any other nation spends.
What do we get for this spending? How about a health care system that ranks 37th by the World Health Organization.
Said Mark Leno upon introduction of the legislation:
“As a nation, we spend twice as much per person on health care as other wealthy countries, with the hope that our families will be protected from illnesses, yet most insured Americans still worry about how they will afford critical care if they become sick. In California, 7 million people do not have health insurance. Wasteful health care spending is crushing our economy and forcing families to forego basic medical care. With the money we spend today on health care, California can have a modern, universal health care system that provides high quality care for everyone.”
So far SB 810 has received the co-sponsorship of at least 43 legislators, but there is one key legislator who so far has not signed on to the support the legislation as a co-sponsor–that would be freshman Senator Lois Wolk who serves Davis and most of Yolo County.
To make matters worse, Senator Wolk sits on a key committee, the Health committee. Already one of the Democrats, Senator Negrete McLeod has signaled opposition to the Leno Bill which makes Senator Wolk the key swing vote on the committee and the only other Democrat who has not signed onto the key legislation.
SB 810 would provide affordable healthcare to all Californians that includes the right for each Californian to choose their own physician. It would be provided to all residents regardless of their employment, income, or pre-existing condition.
Under the act, everyone would pay into the system–individuals, employers, and the government. There would be no new spending on healthcare. The system would be funded by existing federal, state and county monies already going to healthcare and would replace all current premiums, deductibles, and out-of-pocket payments and co-pays currenly paid by employers and consumers.
According to an anlysis:
“The Act eliminates waste by consolidating the functions of many insurance companies into one comprehensive insurance plan, saving the state and consumers billions of dollars each year. Currently about half of every dollar spent on healthcare is squandered on clinical and administrative waste, insurance company profits, and overpriced pharmaceuticals. The Act is based on a model that has been estimated to save California about $20 billion through reduced administrative costs in the first year alone.”
This is not socialized medicine. It simply combines insurance providers under a single-umbrella, combines and consolidates the spending that has increased tremendously on the part of employers and individuals. In many ways this would act simply as an extension of the current Medicare system providing coverage to all rather than just those over 65 and retired. The individuals would still choose their own doctors. However gone would be many of the problems associated with the current health care system–the waste, inefficiency, lack of coverage, under-coverage, etc.
The real question at this point is why hasn’t Senator Wolk signed onto this bill like her counterpart in the Assembly, Mariko Yamada?
—David M. Greenwald reporting
I am glad Lois has withheld her support. So far the only funding mechanism for SB 810 is SB 1014, which “would impose an “excise” tax on employers at an unspecified rate on the wages paid to employees.” There is no exception for the smallest employers. These have been the major problems with SB 810 from the start. Nobody knows how much it will really cost or what the tax will be. To small businesses that don’t currently offer health insurance, which includes most of the smallest employers, this would be a serious major new expense that would result in job losses.
I agree with Don. I am a firm believer in universal healthcare, but the devil is in the details. We may want to have universal healthcare in Davis but that doesn’t mean that the city can necessarily do it. For the state, a sound approach is needed – if healthcare reform fails here it sets back the movement in the entire country. I feel secure that Lois wants healthcare for all but has to be convinced that a specific approach is the correct one. There are times to have some faith in the people we elect – though we do need to let her know that this is a critical need for the uninsured and underinsured in the state, as well as those who end up inefficiently subsidizing others.
Don and Mike,
You are saying that Lois has to be convinced that a specific approach is the correct one.
If Wolk showed leadership on this issue she would offer amendments, but instead she has just refused to sign on and support a very important bill at a time when our state has many people who are uninsured or under insured.
I would like supporters to stop giving her an easy pass just because she “sometimes” supports bills that are easy to support. This is a serious issue and I hope she steps up.
Here is the funding mechanism that was detailed in SB 1014 in 2008. There is no link to this version that I could find in any of the online web sites supporting SB 810. I had to do a leginfo.ca search. SB1014, the funding bill for SB 810, doesn’t appear to be before the Senate this year.
” 18355. (a) In addition to other taxes imposed under the
Unemployment Insurance Code, for each calendar year beginning on or
after January 1, 2008, there shall be imposed on every employer an
excise tax in an amount equal to ____ 8.17
percent of the wages paid by the employer to each employee,
with respect to employment, during a taxable year.”
“there shall be imposed on the income of
every individual a tax equal to ____ 3.78″
“The term “wages” does not include either of the following
amounts:
(i) The first seven thousand dollars ($7,000) of remuneration
received by an individual from an employer”
So as it currently stands, health care in California would be paid for by
— a 1% tax on incomes over $200K
— a 3.78% tax on wages over $7000
— an 8%+ tax on employers.
If the funding mechanism has been changed since 2008, there is no indication of those changes at any source I can find.
Don: thanks for the info. What we really need to figure out in some basic way is how much we are paying now either at the government level, on the personal level, and from the business standpoint. I suspect we pay less under this than we do now. However, I think you raise a good point about small businesses. They are the one group largely not paying right now that would have to contribute. There has to be a reasonable way to phase it in.
What ought to be done — to advance the cause of universal health care — is to divorce health insurance and employment. Get rid of the tax-code provisions which make employer-purchased plans a deductible expense for employers; get rid of the provision which allows an employee to receive this benefit tax free. Changing the tax-code in that manner would spell the beginning of the end of our horribly flawed system.
No European or Canadian single-payer system (AFAIK) forces employers to buy health insurance plans for employees. Doing so makes employing low-skilled, entry-level workers impossible. Would you hire someone who was worth $10,000 a year to you if you had to buy a $12,000 health insurance plan for him in addition to paying his wages?
A secondary, but serious problem with employer-based health insurance — which might be overcome by plans like Mr. Leno’s — is that people with ongoing health issues often cannot afford to leave their jobs, even when a better opportunity exists elsewhere. I have a friend who is a successful sales exec for a major software company in the Bay Area. She wanted to leave her job to start her own company, but (because she had earlier had skin cancer) she couldn’t buy a health plan which would allow her to stay with her oncologist. There were plans for small businesses that she could buy, but they were terrible, compared with what she had (and still has) at Oracle.
In my opinion, single-payer is probably the best way to go. But it just shouldn’t be funded by payroll taxes or be in any way tied to jobs. Instead, I think a special income tax* is the right funding mechanism: People making around $50,000-$100,000 would pay for themselves; people making less would get a subsidy; and people with incomes over $100,000 would be subsidizing those unable to afford insurance.
* Other tax sources could be excises on products like cigarettes, snuff, booze, cocaine, heroin, marijuana, methamphetamines, partially hydrogenated oils, processed sugars, fatty meats, gasoline, gas-guzzling cars, coal, fundamentalist sermons, flat screen TVs and plastic surgery.
“So as it currently stands, health care in California would be paid for by
— a 1% tax on incomes over $200K
— a 3.78% tax on wages over $7000
— an 8%+ tax on employers.”
“Don: thanks for the info. What we really need to figure out in some basic way is how much we are paying now either at the government level, on the personal level, and from the business standpoint. I suspect we pay less under this than we do now…”
This is correct, you “suspect” – but you don’t know. My guess is that the state of CA and its people cannot afford this – the devil is in the details, as a previous poster pointed out. Medicare for everyone? And you don’t think that is going to be hugely expensive? You’ve got to be kidding! The feds are finding Medicare a hugely expensive program, have made cutbacks, and some elderly can’t get health coverage in their counties w Medicare. You want to tax people even more than they are being taxed now, including small businesses which are barely surviving? Not to mention many do not use the health coverage they have, until a crisis arises, when prevention would have cost far less. Universal health care is not necessarily the panacea that everyone thinks it MIGHT BE. Just bc something sounds good doesn’t make it so…
So, David, this statement you made is simply untrue:
“There would be no new spending on healthcare. The system would be funded by existing federal, state and county monies already going to healthcare and would replace all current premiums, deductibles, and out-of-pocket payments and co-pays currenly paid by employers and consumers.”
There would be new spending on health care. Small employers who do not currently pay for their employees’ health care would now pay a tax. The system would NOT be funded by existing monies. It would be funded by new taxes. Or at least, that was the plan in 2008.
To support SB 810 without knowing the funding mechanism is irresponsible. Any bill that requires new revenues requires a companion tax bill. SB 810 doesn’t have one at the moment. So Lois is being responsible, as the details of the plan are not known.
Re Rich’s comment “Doing so makes employing low-skilled, entry-level workers impossible.”
Anything that increases employers’ costs will reduce employment of the lowest-tier employees. It is that simple. We already pay unemployment tax, match social security taxes, pay sick leave and vacation, and pay workers’ compensation insurance. Those add 20 – 30% to the cost of employment.
Health care costs grow 4 times faster than our economy every single year. Employers, families, and government are all being utterly bankrupted by the failure to implement single payer. “Single payer” simply means that, instead of paying premiums to hundreds of different insurance plans, everyone pays premiums to one public trust fund that pays for your care. Doctors and hospitals stay private and competitive. Splitting everyone up based on how sick they are, how old they are, where they work, or how much money they make is not only incredibly wasteful, but it makes people who are sick unprofitable – why would private insurance companies compete to provide good care to people who cost more than they pay in premiums? They don’t and that’s why we have the most expensive system with the worst health care outcomes.
We spend twice as much as every other industrial nation on health care and even the US Business Roundtable says that we are not getting value on the dollar compared with single payer nations. School districts around the state often spend upwards of 20% of their payroll on health care costs for employees and retirees! SB 810 saves business tons of money, would stimulate the economy, covers everyone regardless of where they work, stabilizes costs, improves quality. It’s also a model that is tested – Medicare. This is the most tested, reasonable, proven model being proposed.
Sb 840 was ammended in 2008 to include funding with the insertion of Article 2 California Premium Commission starting at paragraph 140230. This supplements and makes SB 1014 unnecessary. SB 810 is the reintroduction of the wording of SB 840 that was vetoed by Governor Schwartzenegger last September. The tax funding rates being quoted were developed from computer modeling done by a reputable national firm, The Lewin Group, in 2000 and 2004. The Legislative Analyst said in Aug 2008 that this modeling’s costs may be understated because of inflation? But these cost proposals are far more accurate then any other healthcare financing porposal that has been put on the table since 2001. The overall governance structure is far superior to the anarchy that the private insurers have breed and enhanced over the past century.
The integration, alignment, and standardization of processes and data collection under a comprhensive healthcare plan would save untold billions of dollars. The elimination of private health insurers would reduce costs by some 35%, so why do you insist on paying 150% more for an unnecessary middleman that adds no value?
Isn’t it interesting how we just got talking about how the sky is falling with the budget and how we cannot afford this, that and the other, and how we are desperate, then out comes the X-mas wish list in the next breath. We need universal health care, programs for the needy, and the recent one in Davis is the same thing. If you visit some of the parks in Davis you’ll notice that they just got fancy new recycling containers from that $ that wasn’t there because we are too desperate right now.
This is not socialized medicine.
If it quacks like a duck….
It simply combines insurance providers under a single-umbrella, combines and consolidates the spending that has increased tremendously on the part of employers and individuals.
“quack quack”…
Mariko Yamada obviously wants to make a name for herself. Instead of focuusing on the issues that matter, she wants to make a big splash for herself. It is only going to cost the taxpayer an arm and a leg.
Here ([url]http://info.sen.ca.gov/pub/09-10/bill/sen/sb_0801-0850/sb_810_bill_20090227_introduced.html[/url]) is the text of the bill SB 810 referenced above. It amounts to the same thing. The paragraph mentioned establishes a 21-member commission dominated by appointees by legislative leadership:
6 members appointed by the Speaker.
5 members appointed by the Senate Rules Committee.
2 members are appointed by the governor, plus one member from his cabinet (Secretary of HHS).
3 constitutional officers: Controller, Treasurer, and Lt. Governor
4 executives from state government: Chair of the Board of Equalization, Executive Officer of the Franchise Tax Board, Legislative Analyst, and Director of the EDD.
This commission will determine how much the program is going to cost and will then set the rates. But it is directed to use the Lewin Group report from 2004. That report sets the payroll tax for employers at 8.17%.
By comparison, the short-lived proposal by the governor and former speaker Nuñez had a sliding scale for the employer payroll tax, based on total payroll. Small employers would have paid as little as 1%. But the proponents of single-payer strongly opposed that measure.
The Lewin Group’s estimate is based on assumptions about 2006 figures:
Of the total $166 billion program, “[t]he state would need to collect an additional $94.7 billion in tax revenues to pay for program operations in 2006. These tax revenues are required to replace the premiums now paid by employers and individuals under the current system.”
$72 billion would be covered by shifting current state health care costs.
Their estimate of the total private employer spending on health care in 2006 was $49.6 billion. So clearly their tax was intended to cover the difference.
The problem of relying on payroll taxes to fund entitlement programs is already coming home to roost in California. The unemployment tax is paid by employers; California predicts an unemployment trust fund deficit of $2.7 billion in 2009.
As unemployment rises, payroll tax revenues decline. What will the Premium Commission do when revenues aren’t sufficient? They can take a number of steps to reduce health care services. Or they can raise the taxes.
Just a question: Can single payer insurance be implemented one state at a time? Wouldn’t uninsured retired people from the rest of the country move just move to California, put their assets in some sort of tax-free instrument, buy a California house with cash (no need to withdraw income from tax-free instrument to pay monthly mortage), and then pay 3.78% on the minimum income they need to withdraw from their retirement accounts during the most health-care expensive time of their lives?
Say, for example, an uninsured 70 year old moves from New York, sells their house, buys a California house cash outright. How much does he/she need to live on comfortably without mortgage? I would guess $50,000 maximum. But I assume that the New York retiree would only be paying 3.78% of their income for California health care. What is 3.78% of $50,000? $1,890 a year. How much does it cost to provide health care annually for folks aged 70 to 90? I don’t know, but I know it’s a whole lot more than $1,890 a year.
I don’t know if the proposed plan has figured out how to handle this potential deal-killer. Do any of you know?
A retired person has medicare and as I understand this is basically an expansion of medicare to everyone, so an uninsured retired person would have no advantage in moving (because there is no such thing as an uninsured retired person). As for non-retired people, you have other factors–cost of living, getting a job, etc.
A retired person has medicare and as I understand this is basically an expansion of medicare to everyone, so an uninsured retired person would have no advantage in moving (because there is no such thing as an uninsured retired person). As for non-retired people, you have other factors–cost of living, getting a job, etc.
A retired person has medicare and as I understand this is basically an expansion of medicare to everyone, so an uninsured retired person would have no advantage in moving (because there is no such thing as an uninsured retired person). As for non-retired people, you have other factors–cost of living, getting a job, etc.
[b]”Can single payer insurance be implemented one state at a time?”[/b]
Anyone interested in one state which nearly has universal health insurance (97.4%), should read this sobering article ([url]http://www.nytimes.com/2009/03/16/health/policy/16mass.html[/url]) (published last week) about Massachusetts in the New York Times. The Massachusetts plan looks very similar to SB810. I thought this paragraph was quite interesting:
[i]”Alan Sager, a professor of health policy at Boston University, has calculated that health spending per person in Massachusetts increased faster than the national average in seven of the last eight years. Furthermore, he said, the gap has grown exponentially, with Massachusetts now spending about a third more per person, up from 23 percent in 1980.”[/i]
Facing rising costs and a deficit, Massachusetts is increasing the rates it charges employers and using forced price controls.
I just don’t understand why people would not get that a system (universal health care) that essentially provides Medicare for everyone would be horribly expensive. If anyone knows how the Medicare system works, they would also know it is not a panacea for all the ills in the health care industry.
1) Medicare itself is a very, very expensive program, that is currently contributing to the economic problems of this country, much as the Social Security system. (That does not mean we should not have both programs, but they need to be run more efficiently – but the gov’t never runs anything efficiently when spending OTM.)
2) Those elderly w only Medicare often cannot get services they need. In some counties, some providers will not take Medicare only patients. Medicare recipients often have to purchase Medigap policies, to fill in the holes that Medicare doesn’t provide.
3) Medicare coverage is cut back whenever there is an economic downturn. Its coverage depends on the whim of politicians and the economy.
If you think a verson of Medicare for everyone is going to solve the problems in the health care field, then you just don’t understand how Medicare works. There is no way that universal health care, as it is envisioned (Medicare for everyone) is going to solve much of anything. All it will result in is more problems, and more wasting of tax dollars, at a time when we cannot afford such a thing.
I will repeat this old adage again – “If it sounds too good to be true, it probably is!”. If you doubt me, start researching Medicare, and your eyes will be opened…
I just don’t get how people don’t understand that the current system is horribly expensive, inefficient, and leaves a lot of people out to dry.
David Greenwald suggests:
“A retired person has medicare and as I understand this is basically an expansion of medicare to everyone, so an uninsured retired person would have no advantage in moving (because there is no such thing as an uninsured retired person). As for non-retired people, you have other factors–cost of living, getting a job, etc.”
But what concerns me is that medicare only covers a portion of retiree care. The city’s present post-retirement health benefit assumes that medicare covers about ½ to 2/3 of health care costs for older retirees, and that the city premium hence is about 1/3 to 1/2 that of non-medicare aged workers, i.e., for full coverage, a supplement of 1/3 to ½ standard insurance cost is still needed.
I have read that an average couple would need about $300,000 just to cover the difference between medicare and actual expected health care costs in retirement, which is pretty sobering. If the State plan addresses that $300,000 gap, then there would be great incentive for uninsured retirees to move to California, and a 4% earned/unearned income tax wouldn’t cover it. If it doesn’t address that gap, then it really isn’t universal health care, because medicare is woefully inadequate.
Likewise, I still don’t see what’s to keep uninsured families from moving to California when and because a family member is stricken with an expensive disease? Surely people move to California everyday for far lesser reasons then getting health care coverage for a loved one in dire need.
Are these issues addressed in the California bill? Can universal health care really be achieved by one state, or does it need to be implemented nationally in order to work?
“Are these issues addressed in the California bill? Can universal health care really be achieved by one state, or does it need to be implemented nationally in order to work?”
Very good points. Right now, Medicare does not cover all costs, and is a very expensive program for the gov’t to implement. Some counties will not take Medicare patients, and some doctors won’t. Medicare coverage is cut during economic downturns at the whim of politicians. Universal health care would be a nightmare if implemented here.
And the current system isn’t a nightmare?
Yamada obviously cares deeply about people getting the medical he[p they need.
healthcare for everyone is needed. Currently, people do pay for medical care and we must factor in that or subtract it from what we would have to pay. It sounds like a workable way in France or Canada. It may not be perfect but workable.
David brings up a good point. If california has universal healthcare what would happen to our state if other states do not provide it. California cannot do it alone. We could not limit people from coming over from other states because that would be a nightmare and wrong.
“And the current system isn’t a nightmare?”
Be careful what you wish for. It could get worse w universal health care! For instance, we know that many come here to CA for the better welfare benefits. And how has that worked for CA?
Medicare is not available in some counties. Some doctors/hospitals won’t take Medicare patients. Medicare benefits are constantly reduced on a political whim. How will universal health care make that better?