There’s a secret about the Healthy California Act that’s been largely hidden in the reporting: It would produce huge savings for nearly all California households and businesses.
Senate Bill 562, now before the Assembly after passing the Senate last week, would guarantee coverage for all Californians, and slash what middle income families spend on health care costs as a share of their income by up to 9 percent. In effect, that would be a 9 percent raise for most people.
Businesses, especially those that have shown their commitment to their employees by paying for health benefits, would benefit, too. Businesses with up to nine employees would see a 22 percent drop in what they now spend on health care as a share of their payroll. Companies with between 10 and 19 workers would see a net drop of 13 percent. Businesses employing 20 to 99 workers would have a 7 percent drop, and businesses with 100 to 499 workers would spend about 6 percent less on health care.
One medical card would ensure you could go to the doctor, hospital or clinic of your choice. No premiums, deductibles or copays so people would not face financial disaster and loss of credit due to the massive out-of-pocket cost.
California insurers reject over one-fourth of all health care claims. That would become a thing of the past. No more surprise medical bills for going out of network or an unexpected medical group sending you a huge bill for participating, without your knowledge, in providing your care. That barrage of medical and dental bills you get now? Gone.
And, you will pay less for health care.
An analysis by a team of respected researchers from the University of Massachusetts Amherst’s Political Economy Research Institute documents how SB 562 would also broadly cut overall spending on health care by nearly 20 percent.
Those savings come from reductions in administrative waste on insurance profits, paperwork for care denials and multimillion-dollar executive pay packages. The state would use its purchasing power to lower prescription drug costs. And patient care would improve through a coordinated, more rational system based on primary and preventive care.
Opponents try to confuse people by disingenuously claiming SB 562 would require new state spending of $400 billion. Not true. Most of that is what Californians currently spend on health care, including the 71 percent of current spending on Medicare, Medi-Cal and taxpayer-funded payments to private insurers to defray some of the insurers’ inflated charges.
The Amherst study proposes to make up the new revenue needed to cover everyone and eliminate the hefty costs of premiums, deductibles and other excess charges – about $100 billion.
It could be fully paid with a 2.3 percent gross business revenue receipt tax – it would exempt small businesses by exempting the first $2 million in revenue – and a 2.3 percent sales tax, which would exempt spending on housing, utilities, groceries, professional dues, funeral services, personal care, and legal and accounting services.
We face a moral imperative. We can continue to be locked in the grip of a profit-focused insurance system that abandons our family members, who suffer in pain with ever rising costs they can’t afford. Or as nurses, a caregiving profession, propose, we can transition to a more humane system premised on patient need, not insurance profits.
Deborah Burger is a registered nurse and co-president of the California Nurses Association, sponsor of SB 562. She can be contacted at email@example.com