California Senate Passes Single-Payer Health Care Bill, Despite Missing Financial Details

State senators voted mostly along party lines, 23-14, to pass a bill that would create a state-managed health care system for all 39 million Californians – even though the bill was missing key details, namely, how to pay for it.

Opponents of the “Healthy California Act” repeatedly drew comparisons to the rushed Republican House bill to repeal and replace the Affordable Care Act in Washington, DC. They said state Democrats were guilty of the same tactics, pushing their bill on a single payer health system without a funding mechanism.

“It’s not cooked,” Sen. Jeff Stone, R-Temecula, said of the bill.  “It’s raw meat.”

Senate Bill 596 would upend the state’s employer-based health insurance system and replace it with a “Medicare-for-all” single payer system run by the state.

Supporters admitted that the bill is a work in progress, but urged passage as a way to continue the debate, especially in light of uncertainty around billions of dollars in federal funding tied to the Affordable Care Act.

“The message to those people who say we’re irresponsible, I tell you, do not don’t judge us based upon a vote in a day,” said Sen. Bob Hertzberg, D-Los Angeles. “Judge us based upon our work at the end of the day.”

How to pay for the new system – estimated to cost $400 billion a year – was the main point of contention, with several lawmakers arguing the state’s finances were already strapped.

"We should not be maxed out on our credit cards and then try and buy a Mercedes Benz," said Sen. John Moorlach, R-Costa Mesa.

No specific funding plan was included in the bill, but an economic analysis by the University of Massachusetts-Amherst, commissioned by the bill’s sponsors, assumed two-thirds of the funding would come from existing federal and state funds that currently pay for Medicare and Medi-Cal, and the rest would come from either a payroll tax, or a combination of a 2.3 percent gross receipts tax on business revenue above $2 million and a 2.3 percent sales tax.

The health insurance industry criticized the financial assumptions in the report as “overly optimistic."  Business groups called the taxes a “job killer” and lawmakers raised concerns on the Senate floor that the Trump administration would not allow the state, which has identified itself as a part of the Trump resistance, to re-apply those funds to a single payer system.

“We’re going to kick the crap out of Trump day in and day out on this floor, then we’re going to go beg him for a couple hundred billion dollars?” said Sen. Tom Berryhill, R-Twain Harte.  “Should be an interesting ask.”

The bill’s primary author, Sen. Ricardo Lara, D-Bell Gardens, thanked his colleagues  for a robust debate. He took copious notes, and even accepted critics’ comparison to him pushing his unfinished bill with the Republicans’ hasty passage of the repeal and replace Obamacare bill.

“But there is one fundamental difference,” Lara said. “They are fighting to limit care and we’re fighting to expand it.”

Because the bill is on a two-year legislative cycle, Lara has another year and half to work out the details of the funding plan. Getting it passed through the Senate gives him extra momentum to bring other stakeholders in on the debate, including, perhaps, Gov. Jerry Brown, who has indicated he would veto a single payer bill.

Lara vowed to work with lawmakers on both sides of the aisle going forward, and committed to having a transparent debate.

“For the countless people that still do not have access to care, and are still making the decision about putting food on their table or buying prescription drugs because they cannot afford them, we are going to put our minds together to ensure that we bring back a product that is fiscally prudent and sustainable.”