Most healthcare bills have a hefty price tag attached, but Senate Bill 562 may have one larger than some Californians are willing to take on—an estimated $400 billion a year, according to an analysis from the California Senate Appropriations Committee.
The bill, commonly called a “single payer plan,” is being pushed by members of the California Nurses Association, which is headquartered in Oakland. Should it pass, all healthcare costs would be covered under the expansive umbrella provided by the state for all residents, regardless of employer or income. If the state legislature moves forward to take full control over private and state health coverage, it would also remove programs such as Medicare and Medi-Cal, and instate one big healthcare plan for all California residents.
Nurses like Martha Kuhl, a member of the nurses’ association, are advocating for a healthcare plan which would also replace additional fees for doctor’s visits, prescriptions, procedures, mental health, vision and dental care. Kuhl says movement for this idea of state-controlled healthcare has gained legs since Vermont Senator Bernie Sanders ran for president and advocated for a similar national healthcare plan.
“A lot of people became convinced that we should guarantee health healthcare as a human right,” Kuhl said.
As for the price tag, Kuhl says it’s too early to know if that $400 billion estimate will be correct in practice. “The bill right now is a policy, and we have to spell out the policy before you can figure out how much it’s going to cost you—you have to know what level of benefits people are going to get, what kind of rights they’re going to have,” said Kuhl, who has been fighting for the bill since 2017.
Kuhl is one of many who started the Healthy California campaign in January—organizing rallies, public hearings, and canvassing door-to-door to preach the gospel of SB 562.
“For months, thousands of Californians have been standing up in a grassroots movement for a single payer system that puts patients before insurance industry profits,” said California Nurses Association (CNA) co-president Malinda Markowitz, RN, at a Sacramento rally and public hearing in January organized as part of the Healthy California campaign.
In mid-April, the Oakland City Council unanimously voted to support the bill, using a resolution authored by Councilmember-at-large Rebecca Kaplan. In the resolution published on April 13, Kaplan wrote, “California is one of the largest economies in the world, and has the ability to stand up for our values and vision of society of mutual respect and caring by providing health care for all, even if the nation does not.”
In an email, Kaplan wrote, “I am a strong supporter of universal, single-payer healthcare, not only because it is good policy for the public, but also because of my direct experience living under a single-payer system,” noting that she had previously lived in Canada. “I also know that cities and other employers are spending vast amounts of extra money on for-profit healthcare, and this money could be better used to fund important public needs. With single-payer systems we can get better health outcomes and save money for the public,” she continued.
The debate over how involved the government should be in providing healthcare has been heated and complex. In 2009, Congress passed the Patient Protection and Affordable Care Act (PPACA), commonly known as Obamacare or the ACA, which contained an “individual mandate” requiring all individuals without coverage to obtain a healthcare plan. People who were not offered a plan by their employer were obliged to buy their own plan through a public marketplace. The federal government required small businesses and individuals in each state to have these plans in order by 2014.
Since that time, the looming argument over what to do with the ACA has played out in political debates and Twitter wars. Although Congress tried—and failed—to repeal the ACA in 2017, they did repeal the individual mandate requirement.
“There was an opening in our society, especially with the Republicans trying to take away the healthcare that people had by undoing the ACA. It wasn’t perfect by any means, but it did guarantee healthcare and gave other people access who truly never had it,” Kuhl said.
Senate Bill 562 is one attempt to create a faux universal healthcare model at state level. The idea is similar to what is found in the U.K., Canada, or Australia, where the country acts as the main insurer for all residents. “Seventy percent of all dollars spent on healthcare in California all are already public dollars,” Kuhl said, “California would actually pay less than they are paying now and they would actually be guaranteed healthcare.”
A study completed by UCLA Center for Health Policy Research director Gerald Kominski indicates that “personal health care expenditures are estimated to total more than $367 billion in 2016 and that approximately 71 percent of health care expenditures in California are paid for with public funds (i.e. taxpayer dollars).”
Now, she said, groups like hers are “looking around the globe and seeing how other people do it—as a publicly-administered, publicly-financed system that pooled all our healthcare dollars together.”
According to the text of the proposed bill: “All residents of this state have the right to health care. While the federal Patient Protection and Affordable Care Act (PPACA) brought many improvements in health care and health care coverage, it still leaves many Californians without coverage or with inadequate coverage.”
According to a legislative factsheet circulated by State Senator Ricardo Lara, (D-Bell Gardens), a co-author of the bill, about 2.9 Californians, or 7.4 percent of state residents, are uninsured, either because they cannot afford the cost, or are undocumented and therefore cannot buy insurance through the state exchanges.
The nurses’ association isn’t the only organization in the Bay Area advocating for the catch-all remedy. The East Bay DSA (Democratic Socialists of America, a socialist organization focused on progressive politics) charged forward with their own campaign in late February, performing door-to-door visits to collect pledges supporting the bill. Sue Bergman, the Alameda County representative for the DSA, frequently holds social hours to attract residents into info sessions about the bill, claiming it will revolutionize healthcare in the Bay Area.
DSA members believe the single payer plan would be geared towards actual consumer health needs, and criticize the current healthcare model because they say it has private investors tied up in profit-mongering. Speaking on a DSA-led podcast called Rose Radio regarding the single payer plan, DSA member Jeremy Gong said, “Right now, healthcare is treated like a commodity, and there’s all sorts of companies that are making enormous profit on it. What we want to do is take health insurance off the market and basically abolish the private health insurance industry in this state, and hopefully around the country.”
Gavin Newsom, the former mayor of San Francisco and currently California’s lieutenant governor, has argued that the $300 billion residents are paying to private insurers to have healthcare in California could be better spent on a single state-run healthcare plan. “I think there’s a lot of mythology about the cost of single payer,” Newsom said during a press conference at the National Union of Healthcare Workers’ in October, 2017, in Anaheim. “It’s about reallocating existing resources and using them more effectively and more efficiently. The fact is we are spending $367.5 billion dollars a year on healthcare.”
But some argue that the single payer plan would in actuality be a risky healthcare model, as it would cost $400 billion a year, according to an analysis released last May by the California Senate Appropriations Committee. According to this analysis, the healthcare plan would double the state’s budget—the entire California budget for 2018 alone was only $190 billion.
According to the analysis, about $200 billion in existing state and local funds could be used to offset the cost. But funding for the rest would be funneled from increases on income taxes and businesses, potentially including a 15 percent payroll tax.
However, the analysis notes that these estimates are “subject to an enormous uncertainty.” For example, a single payer plan would also likely reduce employer spending on healthcare by as much as $100 billion or $150 billion per year, making the “total new spending required under the bill” much lower, closer to $50 billion or $100 billion.
But CNA nurse Martha Kuhl says the increase on income tax shouldn’t matter. While a lot of people hate taxes, she said, “I think taxes are the price to pay for a civilized society.”
A representative from Kaiser, the insurance giant located in Oakland, did not respond to requests for comment on how SB 562 might affect their industry.
But Kuhl expects that insurers will not support the bill. “Insurance companies are making too much money, and a single payer plan will actually eliminate insurance companies as the middleman between us and our health care providers. So obviously they would oppose it,” she said.
For now, legislators seem have put the single payer plan on the shelf—after passing through committee hearings last spring, it stalled in assembly hearings last June. But with the Healthy California push that began this spring, and local legislators like Oakland’s City Council showing support, supporters hope they can get the bill to move again.
Kuhl says she believes that if California residents and legislators can trust in this bill to end healthcare woes, they will not be disappointed. She called a single payer plan a “healthcare system that touches on providing care and not denying care to make profit. It’s a system that people trust.”
This story was corrected on May 11 to fix attribution errors.