“If single-payer can’t pass in California,” critics insist, “it can’t pass anywhere.” Balderdash…. (More)

“California has the chance to lead our nation toward healthcare for all”

So declared state senator Ricardo Lara in response to the assembly’s decision to shelve the Golden State’s latest single-payer health care proposal:

“We are disappointed that the robust debate about healthcare for all that started in the California Senate will not continue in the Assembly this year. This issue is not going away, and millions of Californians are counting on their elected leaders to protect the health of their families and communities.

“Continuing the push for universal healthcare has never been more critical with Congress possibly days from voting on one of the cruelest bills in our nation’s history, which will lead to millions of the poorest Americans losing insurance, soaring costs for older and sicker people, and terrible budget choices for our state.

“California has the chance to lead our nation toward healthcare for all, and we will not turn our backs on this matter of life or death for families.”

The implication – often made explicit by critics – is that if single-payer can’t pass in “the People’s Republic of California,” then it can’t pass anywhere. But the state’s constitution makes it one of the most difficult places to pass a single-payer bill.

“Any taxes raised to support this bill would be … subject to the requirements of Proposition 98”

The constitutional roadblock is Proposition 98, the Classroom Instruction Improvement and Accountability Act, an amendment passed by voters in 1988. That constitutional provision basically doubles the cost of any single-payer program, as the Intercept’s David Dayen explains:

To cut through the clutter, let’s focus on the biggest constitutional hurdle, known as Proposition 98. Passed in 1988, Prop 98 requires that roughly 40 percent of all general fund revenues – money the state receives in taxes – must go to K-12 education. If you include community college spending, it must exceed 50 percent.
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As the Senate legislative analysis states, “Any taxes raised to support this bill would be … subject to the requirements of Proposition 98.” That means that, in order to raise enough money to fund single payer in California, under current law you would have to raise twice as much to satisfy the Prop 98 formula.

Substituting a centralized state program for the skyrocketing premiums people pay today would actually be relatively affordable. But if half the money has to be siphoned off to education, that rationale becomes harder to sell.

Single-payer advocates insist the state legislature could add a Prop 98 exception to the health care bill, and as the legislature passed Prop 98 exceptions twice during the Great Recession. But the exceptions require two-thirds majorities and extend for just one year. Right now, Democrats hold a two-thirds-plus-one majority in the assembly, and exactly two-thirds in the senate. If they lost just one senate seat, or two assembly seats, they couldn’t pass further Prop 98 exceptions … and single-payer funding would collapse.

The only stable solution would be to amend Prop 98, but that would require a ballot initiative. The state constitution limits those to even-numbered years, so a ballot initiative would have to wait until 2018 at the earliest. And as Dayen notes, single-payer opponents would throw piles of money into attack ads claiming that Democrats were stealing money from schools to give free health care to illegal immigrants. Yeah. Ouch.

“If there aren’t waivers, this plan is vaporware”

Even if an amendment to Prop 98 somehow passed, that would solve only 40% of the funding problem … and the other 60% would require federal action:

States trying to go single-payer on their own face a passel of legal obstacles. They need multiple waivers from the federal government to refashion Medicaid (known in California as Medi-Cal), Medicare and other federally funded health programs and redirect federal dollars into their own systems.

California’s proposal assumes that those dollars would keep flowing at least at current rates – not a perfectly sound assumption, as congressional Republicans currently are trying to strip more than $830 billion out of Medicaid over 10 years and to cap its future funding. But it’s an essential assumption, because the federal government accounts for nearly 60% of all the healthcare money spent in California, via Medicare and Medicaid funding and tax deductions for premiums paid by employers and employees.

A big problem is the Employee Retirement Income Security Act, or ERISA, which reserves for the federal government the right to regulate self-funded employer health plans such as those offered by large corporate employers. California’s plan would shift all employer plans to the state, but changing ERISA would require congressional action. That would set up a whole separate political battle in Washington.

What are the odds that House and Senate Republicans would pass – and the God-King would approve – waivers allowing the Golden State to implement single-payer? Zero. And as Duke University researcher David Anderson put it:

Show me the waivers.

If there aren’t waivers, this plan is vaporware.

California would need federal funding streams from Medicaid, Medicare, Medicare Advantage, the ACA or AHCA, Veterans Administration, and the IRS via the cash value of the tax advantage of employer sponsored insurance coverage. I can see a legal pathway towards a Medicaid waiver. I can see a legal pathway towards an ACA waiver. I can squint hard to see an AHCA waiver.
I don’t know how California convinces a friendly administration that state wide single payer is worthy of a Center for Medicare and Medicaid Innovation (CMMI). An unfriendly administration won’t grant a Medicare CMMI waiver.

Transferring all of the VA’s funds and responsibilities to a state is a radical redevelopment of the obligations of the VA and its service delivery system.

The IRS/Treasury ceding the cash value of a tax deduction to a state is an incredible renegotiation of power and leverage between the state and the federal government. California’s federal tax code would be fundamentally different than the tax code in the rest of the country.

If there’s “many a slip twixt the cup and the lip,” that’s a whole lot of cups and a whole lot of lips. Just sayin’.

“Single-payer is far from the only model – and it’s not the same as ‘universal coverage’”

California offers special challenges, but any state that attempted single-payer would face problems, as Ezra Klein explained back in 2007:

The idea of giving universal health care a little more time in the laboratories of democracy may sound tempting to certain cautious, bipartisanship-loving Beltway observers. But letting states continue to take the lead would be disastrous, for one very simple reason: providing health care for all citizens is one of those tasks, like national defense, that the states are simply unequipped to manage on their own. The history of state health reform initiatives (and there’s quite a history) is a tale of false hopes and great disappointments. The deck is stacked from the start, and the house – in this case the insurers, the providers, and other agents of the status quo – always wins.

Several states have attempted single-payer at one time or another, most recently Vermont in 2014. When passed in 1994, Hawaii’s QUEST program covered almost half of the state’s citizens. Since then, they’ve had to pare back eligibility to make the budget work. And as noted above, this is California’s seventh single-payer-go-round.

It’s easy for liberal critics to say shelving this year’s bill is a ‘betrayal’ by assembly Democrats, but the reality is more complicated. What’s more, it’s too easy to conflate “universal health care” with “single-payer,” as if the latter is the only path to the former. And that’s just not true, as Scott Lemieux explained last year at the Guardian:

The key to fixing our system, though, is to understand that single-payer is far from the only model – and it’s not the same as “universal coverage”.
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Many liberal democracies, including Switzerland, France and Germany, have achieved true universal coverage with hybrid public/private models. The Netherlands actually changed its single-payer system to a hybrid system in 2006. When compared to single-payer Canada, the hybrid models in general rank better in quality and efficiency and are as or more equitable. And like single-payer, they deliver better results for far less money than the U.S. spends. [Emphasis added]

Democratic staffers should do the grunt work to produce a viable, affordable single-payer plan. Such a plan would anchor the progressive baseline for debate. But simply demanding “single-payer” and howling “betrayal!” when a half-baked “vaporware” plan fails … isn’t enough.

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Image Credit: BBI Flags

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Good day and good nuts