California with democratically controlled Assembly, Senate and Governor are again considering the concept of a single payer or universal payer system. Democratically controlled Assemblies and Senates passed bills that were vetoed by Republican Governor Schwartzenegger in 2006 and 2008.
Democratic Governor has yet to see a single payer bill across his desk since he has been governor but promised that we sign such a bill during his campaign.
The issue is finances. California estimates of the costs of such a system are all over the map from $330B to $400B. That difference is significant as current estimates of the cost of healthcare in California are about $367B a year.
The entire issue is about finances and the largest question is the economic viability of the issue.
From Modern Healthcare
William Hsiao, an economics professor at Harvard University who has helped eight foreign countries design universal healthcare plans, said California should pay attention to what happened in Vermont. That state passed a single-payer concept bill, then abandoned the effort in 2014 when state elected officials decided the tax cost was too high.
Hsiao said it’s problematic for a single-payer system to set too high an actuarial value for coverage. Taiwan, which implemented its plan in 1993, covers 85% to 88% of costs. He and his colleagues suggested that Vermont set a similar coverage level, but the state Legislature decided to cover 96% of costs. To pay for that, it was estimated payroll taxes would have to be set at 11.5%, and the state income tax would to be raised to 9%. That ultimately proved politically untenable.
“This is a trade-off when you’re designing something,” he said. “You don’t want the perfect to be the enemy of the good.”
Hsiao predicted that no U.S. state would implement a single-payer system in the next decade. “My guess is that America will move toward single payer when enough of the American people become disgusted with high healthcare costs.”