California tries again for a single-payer health care bill. What could this mean for your tax dollars?

SB 810, proposed legislation that would create a single payer, government-run health care system in California, went before a key Senate committee on January 17.

Authored by Senator Mark Leno, SB 810 proposes the creation of a new agency with a new health care commissioner who would be tasked to set a single standard of care for all California residents. According to the California Association of Health Underwriter’s (CAHU):

Under SB 810 no health care service plan contract or health insurance policy, except for the California Health Insurance System plan, could be sold in California for services provided by the single payer system. The proposed system would make all California residents eligible for coverage, and all Californians will be required to buy into the system through an unspecified premium tax set by SB 810’s proposed Premium Commission.

Although well-intentioned, there are a few fundamental issues with SB 810:

  • The fiscal impact of this measure was analyzed by a legislative committee and would cost the state an estimated $200 billion annually, but the bill doesn’t establish any new taxes or fees. Where would that money come from? Surely not from the California government’s already overextended budget. According to a legislative committee review, the costs would be “offset by an unknown extent of re-direction of revenues from existing health coverage programs.”
  • SB 810 is different than the Federal Patient Protection and Affordable Care Act (PPACA), which sets out an extensive access program through state-run health care exchanges. California is already implementing and complying with PPACA, and SB 810 would be in addition to PPACA guidelines.
  • As outlined by California Chamber of Commerce lobbyist Marti Fisher, the legislation is based on the premise that government systems are more efficient than private business and that a single-payer system would be less costly than the current system, but there is no proof to substantiate those claims.

Two similar bills came across Governor Schwarzenegger’s desk; both were vetoed. What will Governor Brown do? Based on concerns expressed by legislative committees surrounding the extreme costs of implementing and maintaining SB 810, the Senate Appropriations Committee has put the measure on hold to allow for further consideration.

We’ll keep our finger on the pulse of this measure as it progresses and provide timely updates via our twitter feed @MooreBenefits.

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