• Freedom
  • Innovation
  • Growth

Note to the Sages of Sacramento: States Can't Do Single Payer

It’s next to impossible for states to create a state-based, single-payer health care system that covers every person in the state. 

And yet the state of California just tried—and failed—to pass a single-payer bill (AB 1400) again. The bill would have established CalCare, with the goal or covering everyone in the state, citizen or not. 

One reason states can’t cover everyone is that Medicare is a federal health insurance program for seniors. Key the word “federal.” 

California has about 6 million people who are 65 years old or older, and nearly all of them are on Medicare—at virtually no cost to the state. 

AB 1400 required the state to seek waivers from the U.S. Department of Health and Human Services.  The idea was to persuade the federal government to hand the state the money it spends on Medicare—as well as other programs such as Medicaid and the Children’s Health Insurance Program (CHIP)—and CalCare would cover seniors’ health care needs. 

Instead of “Medicare for all,” California would have “Medicare for none.” Or more likely, “Medicaid for all.” 

Good luck with that! Taking away 6 million seniors’ Medicare coverage and putting them in a health care plan devised by the Sages from Sacramento might just be the one thing that could turn California Republican. 

But if the state can’t include its 6 million seniors in CalCare, it’s not single payer. 

And that’s not all. Congress passed the Employee Retirement Income Security Act (ERISA) in 1974. The federal law allows larger companies to self-insure their employees’ health care coverage. About half of all employees with employer-provided coverage are in this category. 

Because ERISA is a federal law, states have little to no power to micro-manage that self-insured coverage.  And why would California want to? Many of the major technology companies (e.g., Apple, Google, Facebook, Intel, Hewlett Packard, etc.) are based in California, and they provide some of the best employee health insurance—at no cost to the state. 

And AB 1400’s cost is (or was) an issue—a big one.  The law was estimated to cost between $314 billion and $391 billion annually, much of which was supposed to be offset by a plethora of new taxes. 

Roughly 70 percent of the state’s population has Medicare, employer-provided or other private coverage, with virtually no cost to the state. And the federal government covers about 63 percent of the cost of the nearly one-quarter of the state’s population that’s on Medicaid. 

Yet many of the state’s Democrats would scrap all of that for a left-wing dream to prove a state can create a government-run, single-payer health care program. A program that would be little more than a vast expansion of the much-maligned Medicaid program.