Few details on how to pay for California's universal health care plan

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140822 full

On a day when state lawmakers were supposed to report the fiscal impacts of a proposal for the state to take over healthcare, authors of the plan acknowledged there remained "enormous uncertainty" around the cost of the plan. Senate Bill 562—The Healthy California Act went before the senate appropriations committee Monday.

Senator Ricardo Lara (D-Long Beach) presented the bill to the committee he chairs, acknowledging the exact details of a plan to finance such a system weren’t completely clear.

California already spends between $350 and $400 billion a year on healthcare costs.

On Monday, Lara presented a fiscal impact report to the committee that assumes $200 billion of those costs would continue to be covered by existing federal, state, and local funding. The remaining costs could come from reduced administrative expenses and a new 15 percent payroll tax.

Opponents testified that single-payer would be financially unsustainable in the state, pointing to the bill’s lack of specificity.

If the bill moves forward, Lara promised to return to the committee with a comprehensive report on costs by health care experts at the University of Massachusetts at Amherst.

"Once this report comes out, we [will] have it analyzed by other independent agencies to ensure that the numbers and what is being proposed is something that is workable, feasible and sustainable," Lara testified.

Supporters of the bill hope it will improve health access and reduce costs to Californians.

The plan would require no additional out-of-pocket costs from patients. Instead, the state of California would pay for doctor’s visits with a fee-for-service system.

Insurance companies, brokers, and the business community collectively oppose the bill. They say the plan would lead to higher taxes and hurt the state economy. 

On Thursday, the committee will decide whether it will release the bill for a senate vote early next month.

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