Capitol Alert

Could California become the next Canada for health care?

Gov. Jerry Brown wanted single-payer health care in 1992

As he ran for the Democratic presidential nomination in 1992, Gov. Jerry Brown promoted a single-payer health care system modeled after Canada's.
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As he ran for the Democratic presidential nomination in 1992, Gov. Jerry Brown promoted a single-payer health care system modeled after Canada's.

State Sen. Ricardo Lara didn’t move to Canada following Donald Trump’s win last November, but he visited last week.

While touring a major research hospital in Toronto, he said he realized that American views on providing health care are becoming more Canadian.

“One fundamental difference between the United States and Canada is that they see health care as a human right … there’s a sense of pride that everyone has access to health care,” he said.

Since Trump’s election, he said, “attitudes are changing – particularly in California.”

While Republicans in Washington are seeking to resurrect their plan to dismantle Obamacare and replace it with a market-based approach, a pair of Democratic California lawmakers are plotting to go in the opposite direction.

Lara, of Bell Gardens, and Sen. Toni Atkins of San Diego, with backing from National Nurses United and the Bernie Sanders wing of the Democratic Party, are working to create a universal, government-run health care system. They believe California can be a proving ground for an approach that could be replicated across the nation.

“In Canada, this system came from the local level and went province to province. We think this could be a model for the United States,” Lara said. “California can set the standard for how we revolutionize health care delivery for all the residents of this country.”

Under a “single-payer” system like Canada’s, the government would pay health care bills instead of multiple insurance companies. Private hospitals and doctors would provide the care. Premiums, copays and deductibles would disappear. The money would come from state and federal governments and new taxes, likely on earnings, and paid by employers and employees.

It’s the same way Medicare functions, essentially. Proponents say it’s a practical way to rein in rising health care costs, expand access and improve quality. Critics argue that such systems lead to unacceptable levels of taxation, rationed care that can make people sicker and long wait lists for primary and specialty care appointments.

California can set the standard for how we revolutionize health care delivery for all the residents of this country.

State Sen. Ricardo Lara

Past efforts to create such a system in California went nowhere. Yet Lara and Atkins have some factors working in their favor this time.

California is fertile political territory for a model that has long represented the ideology of the far left. Democrats controls both houses in the state Legislature, and they’re in power at a time when the state is growing more blue. Voters overwhelmingly backed Hillary Clinton over Trump last November and legalized recreational marijuana. They’ve also shown a willingness to tax themselves to pay for services. And Obamacare has been more successful here than in many other states.

The next generation of political leaders is sympathetic to their cause. Lt. Gov. Gavin Newsom, the frontrunner in the growing field of competitors vying to succeed Gov. Jerry Brown, supports single-payer. He is seeking to make health care a key issue in his campaign, calling it “the issue of our time.”

Newsom was endorsed early by the powerful California Nurses Association, which has long pushed for single-payer health care. RoseAnn DeMoro, executive director of the nurses union, said Newsom’s position, along with his track record of taking public stances on liberal causes before they are widely popular – on gay marriage and legal marijuana, for example – heavily influenced their decision.

“Gavin’s been consistent throughout his career – he’s unafraid,” DeMoro said. “He’s always been with the nurses on single-payer Medicare-for-all. It’s his passion … and he’ll fight for it.”

The Trump election and floundering efforts to repeal and replace Obamacare may have breathed some life into this issue for now, but that’s not enough to sustain a single-payer proposal once cost and other concerns are brought into focus.

Campaign strategist Ned Wigglesworth

Still, several efforts over the past 25 years to adopt a single-payer system have run into fatal flaws in the Legislature and at the ballot box. The biggest challenge has been its steep cost.

“Single-payer has been the holy grail for some progressives but has fatal problems with voters, who are generally satisfied with their health care and want to see Obamacare work,” said Ned Wigglesworth, a partner at Spectrum Campaigns who ran a 2014 campaign against a measure that sought to allow the state to regulate insurance rates.

“The Trump election and floundering efforts to repeal and replace Obamacare may have breathed some life into this issue for now, but that’s not enough to sustain a single-payer proposal once cost and other concerns are brought into focus,” he said.

Opponents helped defeat a previous effort in the Legislature to adopt single-payer a decade ago, in part by branding it “socialized medicine.”

Sheila Kuehl, a former state senator now on the Los Angeles County Board of Supervisors, for years had tried to get a single-payer bill to the governor’s desk. She succeeded in 2006, when Senate Bill 840 at the time became the first such legislation to pass the full Legislature. It came after several previous attempts, including a failed ballot initiative in 1994.

Former Gov. Arnold Schwarzenegger vetoed Kuehl’s bill, citing its steep cost. The bill sought to overhaul health care financing by realigning state and federal funding into a one-payment system, combined with new payroll taxes. The idea was to control costs by regulating premiums, curbing administrative costs and eliminating high-paid salaries for top executives.

The Legislative Analyst’s Office found it would still face severe funding shortfalls – more than $29 billion in the first year, growing to $46 billion after five years of implementation.

Proposition 186, the 1994 ballot initiative, failed miserably, with more than 73 percent of voters opposed at the time.

“I think this bill would result in doctors saying they don’t want to take the government reimbursement rates, and ultimately leaving the state,” said Sally Pipes, president and CEO of the conservative Pacific Research Institute. “Single-payer would be very, very expensive, and those costs would be borne by California taxpayers, who are already paying enough.”

While Republicans are its most forceful opponents, some Democrats in the Legislature are also skeptical.

“I don’t know if there’s the stomach to pass this if the costs are so high,” said Assemblyman Jim Cooper, a moderate Democrat from Elk Grove. “If we keep raising taxes on people, at some point people aren’t going to be able to afford them. We have to be very careful, because at some point I think the public will push back.”

Support for the bill could be politically risky for some Democrats in swing districts, especially on the heels of Brown’s $52 billion transportation plan that raises gas taxes.

“Most of the Democrats in competitive districts won their seats last year by convincing voters they were more moderate,” said Dan Schnur, a longtime political analyst and now professor at the University of Southern California’s Annenberg School of Communications. “They’re likely to have reservations about raising taxes … taking two hits for the team could give their opponents an opportunity to attack them as too liberal.”

Cathy Kennedy of the California Nurses Association says the group will continue to argue for single-payer health care, regardless of who is governor.

Brown, whose job performance has hit record highs, could be a wild card.

He argued passionately for single-payer during his 1992 presidential run. At a 1992 health care forum in Miami, he proposed a model that mirrors the current proposal.

“I believe the only health care system that makes any sense is a single-payer system, similar to what has been adopted in Canada, where everyone would be in one universal system but maintaining the right of private physicians and private hospitals and private choice,” Brown said at the time. “Health care is not a commodity, it’s a right.”

Yet he cast doubt on the current proposal last month, asking, “Where do you get the extra money?”

That comment raised concern from DeMoro, also a fierce supporter of Vermont Sen. Bernie Sanders, who is proposing a national single-payer system.

“I have no idea what Jerry was doing – he shouldn’t have done that,” DeMoro said. “He said show me how to pay for it. Well, we look forward to showing him how we’re going to do it. There has never been a more incredible moment in history that has exposed deep fear and underlying concerns of people not being able to get the health care they need.”

Lara and Atkins said they are working to address concerns that have killed past single-payer proposals. A wide-ranging financial analysis is underway.

Atkins has floated an idea to offset steep costs by dissolving workers’ compensation insurance. Under that change, people with work-related illness or injuries could use their regular doctors, eliminating those costs for employers.

“In the past I’ve said it wasn’t possible,” Atkins said. “What makes us different now is the experience with the Affordable Care Act. I’m hearing and seeing an appetite to do more.”

Angela Hart: 916-326-5528, @ahartreports

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