A California Single-Payer Health Care Plan Would Be Great - For Texas
Investor's Business Daily
Some California Democrats want to pass a single-payer health care plan, and speaking as a Texan I think that would be great — for Texas. Because it would only increase the exodus of productive California citizens and profitable businesses to the Lone Star State.
California State Sen. Ricardo Lara, D-Bell Gardens, introduced a bill Feb. 24 that would create a state-based, single-payer health care system. His plan envisions covering everyone in the state: Employees would no longer have employer-provided coverage, and those currently on Medicaid and Medicare would get their coverage from Sacramento. What could possibly go wrong?
It wouldn't be the first time the state took this step. The legislature passed single-payer bills in 2006 and 2008, only to have them vetoed by Gov. Arnold Schwarzenegger — or maybe because they knew he would veto them.
The Los Angeles Times recalls that a 2008 report from California's Legislative Analyst's Office found that even with a tax of 4% on employees and 7% on business payrolls — which actually means employees would be paying the whole 11% -- the state would still have come up about $40 billion short the first full year.
And that's only if Gov. Jerry Brown is able to persuade the federal government to hand over all the money it spends in the state providing ObamaCare subsidies and Medicare. Good luck with that during a Trump administration.
And just in case you don't think California would do something that fiscally irresponsible, shortly after the state passed its last single-payer legislation it had to begin handing out IOUs to its vendors instead of money because the state faced a $26.3 billion budget gap.
California isn't the only state on the eternal quest to demonstrate that government-run health care can actually work.
In 2011 Vermont Gov. Peter Shumlin pushed through Act 48, making his state the first in the nation to turn single-payer legislation into law.
But after repeated number crunching, supporters concluded that the legislation would cost an additional $2.5 billion — in a state where annual tax revenues are only about $2.7 billion. By December 2014 the governor killed the bill.
But that's not all. In 1993-94 several states passed legislation based on the Clinton health care plan. They weren't single-payer to begin with. But several of those states said at the time that they would begin putting their Medicaid populations into managed care, which would save so much money that they could use the savings to expand coverage to the under-65 population, and eventually even seniors.
Or maybe not. As with ObamaCare, Kentucky included a guaranteed-issue provision requiring insurers to accept anyone who applied. Within a few years after passing KentuckyCare, the number of insurers selling in the state declined from 45 to three — sound familiar? The state mostly repealed its legislation in 2000.
Tennessee was another loser. TennCare bled so much money the sales-tax-only Volunteer State repeatedly scaled back the program and even considered adopting a state income tax just to pay for its health care plan. Eventually, Gov. Phil Bredesen, a Democrat, dramatically scaled back TennCare, dropping about 190,000 from the rolls in 2005.
But passing a single-payer law wouldn't only create a fiscal crisis in California, it might create a political crisis.
Robbing California's 4.6 million seniors of their Medicare would be the surest way to guarantee that virtually all of them would be voting Republican in the next election. Not to mention the millions or employees who like their employer-provided coverage but would no longer have that option.
If the Golden State really wants to test its ability to provide health coverage, it might get the chance soon — on a smaller scale.
If Republicans turn the Medicaid program into state block grants, as they have long proposed, California would get a pool of money to create a health care plan for the poor. State legislators should wait to see how they do with that before trying to dump every Californian into a single-payer system.