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3 paths to universal health care in California

by Michelle Faust | Take Two®

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A healthcare reform activist wears a hat as she protests outside the office of US Speaker of the House Nancy Pelosi May 29, 2009 in San Francisco, California. Justin Sullivan/Getty Images

The Republican push to repeal the Affordable Care Act has had some unexpected consequences: Not only has it strengthened public support for the health law, but it has led to heightened interest in ending the U.S.' status as the only major industrialized nation in the world without a universal health care system.

That dynamic is playing out in California, where the state legislature this year considered a bill that would create a single-payer system. Assembly Speaker Anthony Rendon (D-Lakewood) shelved the measure in June, arguing that it didn't lay out how to make such a radical transition or how to pay for it. Amid an angry backlash from progressive backers of universal care, Rendon subsequently called on a select committee set up to explore the issue to hold hearings this fall on possible approaches.

There are a variety of possible paths California could take. But first, let’s define some terms.

"Universal health care" refers to everyone having access to quality health care without financial risk, according to the World Health Organization's definition. Despite improvements under Obamacare, nearly 3 million people in California still don’t have insurance. From the WHO's perspective, even if the state gets everyone insured, we won't have universal health care so long as there are people who can’t afford their out-of-pocket costs.

To get to universal care, activists have latched on to the concept of single-payer. That's when one entity - the state - foots the entire bill for everyone's medical treatment. It would cut out the private insurance industry, and would require a possibly significant increase in taxes. Proponents say that would be more than offset by the elimination of insurance premiums, deductibles, co-pays and other out-of-pocket costs. The bill Rendon shelved would have created a "Healthy California Fund" to be that single-payer. 

Single-payer is one approach to universal health care, but not the only one. Rendon said the select  committee will consider all of them in its hearings this fall. 

There are many different approaches to universal care around the world. If you want to become an expert on the health care systems of 19 industrial countries, The Commonwealth Fund has this deep dive.

Among the many systems in place, most are a variation on one of the three models below.

The Canadian Model

  • Upwards of 70 percent of health care is covered by the federal and provincial governments.
  • Most health care providers are private.
  • Each provincial government pays for care on a fee-for-service basis, covering most basic services.
  • Many people have additional private insurance to cover things not covered by the government. This typically includes prescription drugs, dental care and optometry. Employers pay 90 percent of those costs.
  • Average annual out-of-pocket costs per person are less than two-thirds of what we pay in the U.S.

The United Kingdom Model

  • Socialized medicine.
  • Doctors work for the government.
  • Hospitals belong to the government.
  • Care is mostly free at the point of service.
  • Consumers pay higher taxes to cover the cost of the program.
  • England spends just over $3,000 per person a year on health care (one-third of what the U.S. spends).
  • This model is somewhat similar to the U.S. Department of Veterans Affairs' health care system.
  • About 11 percent of the population gets private insurance, which provides more options and shorter wait times.

The German Model

  • Everyone in Germany is required to get health insurance.
  • Most people buy insurance from highly regulated nonprofit "sickness funds" that are funded by income taxes.
  • Cost is based on income. Your employer pays half.
  • If you can't afford insurance, the government covers most or all of the cost.
  • About 10 percent of Germans sign up for supplemental private insurance, which can provide more benefits.
  • Plans are heavily regulated, with out-of-pocket costs limited to between 1 to 2 percent of income.
  • Per capita health spending is about half of what it is in the U.S.

 

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