We have received a great deal of support for a single payer, universal health care plan as evidenced by the responses we get to our ads and blogs on the California OneCare website. But the one big question that keeps coming up is “How are we going to pay for it, since California is broke?”
Frankly, it’s an easy answer, because a single payer plan like SB 810 won’t cost money, it will actually save money–billions of dollars in fact. This is true for a couple of reasons. First, private insurance companies would be removed from the system and the money they waste would instead go to providing care. Studies show that private insurance wastes about 31 cents out of every premium dollar on paperwork, marketing, profits, and outrageous salaries for executives. By removing this extravagance from the system, there would be more than enough health care dollars to cover everyone and still save money for families, businesses and government. That’s the beauty of single payer. Instead of thousands of insurance plans, each with their own rules for deductibles, co-pays, exclusions, permissions, pre-approvals, in-system and out-of-system doctors and so forth, there would be only one comprehensive health insurance plan that would cover everybody. The plan would be administered by a state agency that would collect all of the health care “premiums” in the form of tax dollars, and then pay all of the health care providers from those funds. The California Health Insurance Agency would be the “single payer.”
The second reason that California OneCare would save money is because it would require the California Health Care Agency to negotiate for the lowest prices with pharmaceutical firms and medical equipment providers. Prescription drugs, for example, cost nearly twice as much in the U.S. as they do in single payer countries for the same medications. (And don’t believe that Big Pharma canard that lower drug prices will affect the research and development of new drugs. They spend twice as much on marketing as they do on R&D.)
As for medical equipment, why should a pair of surgical scissors costs over $1000? And an electric wheelchair cost more than half the price of a Ford Focus? Savings from these negotiated prices would be a significant part of lowering costs under a single payer system.
How do we know it will work? There is plenty of evidence that a single payer plan not only would provided comprehensive coverage for everyone and still save money. First there are the single payer plans in several other countries that provide care as good or better than ours at half the cost: Canada, Australia, Taiwan, Denmark, and Sweden, for example. Second, there have been at least twenty studies in various states in the U.S. over the past 18 years to determine which type of health care plan would cover everyone comprehensively at the lowest possible cost. Every one of these studies points to single payer as the only way to do it.
One of those studies was conducted by the Lewin Group here in California in 2005. It showed that a single payer plan–specifically SB 810 (it was SB 840 then)–would save $25 billion a year and $350 billion over ten years for the state of California. Furthermore, the plan would cost less for families and businesses than they are paying now for inadequate health coverage.
Next month, Senator Leno will reintroduce SB 810 in the California Legislature. Once again, it is expected to pass in both houses. Governor Brown has said that he would support single payer if he could be shown how it will be paid for. An economic study is currently underway that will show, once again, that single payer is self-funding and will actually help to solve California’s financial crisis. Armed with that study, we are confident that we can convince Governor Brown to sign SB 810 in August of 2012.
There have also been discussions in the State Strategy Group for Single Payer that we can overcome the requirement for a two-thirds vote to finance SB 810 by taking the issue directly to the voters with a ballot initiative. More about that in the near future. Needless to say, it’s going to be an exciting couple of years!
Don Schroeder, Chair
Can’t we get it to his desk this year?
been active in support of medicare for all ( sb810 in CA) for several years… preaching to the choir does little good because most folks have sufficient funds.. those who don’t ask specifically how much it would cost and cost them in particular in real dollars and how those dollars would be paid for by them..
suggest an article with the above in mind and those kind of specific numbers;then, get it out to the public at large as well as to those of us who want to know but can afford to pay more readily…
retired from practice
Excellent summary! Thanks, Don.
The question I get asked from skeptical folks I talk to is not “how will it pay for itself once it’s up and running” -that’s easy – but how will we pay for the initial, up-front cost of establishing the program and making the transition. Even if it saves money in the long run, at the beginning it’s a new item on the budget & they think “how can that happen when we’re cutting right now?”
You give some hints about that in the last paragraph – an assembly vote or a ballot initiative on taxes of some sort to finance it (a mixture of payroll and employer taxes as in SB840?). Would love to hear more about that.
I usually try to explain to people that, yes, there will be taxes ADDED to your or your employer’s life, but there will also be health care premium costs SUBTRACTED that will be equal to or greater than the taxes, so you come out even or ahead. If we don’t succeed in educating the public about this, we’ll never get anywhere with either the assembly or a ballot initiative. Instead, we shy away from the small print and the public says, “what’s this? a payroll tax? no way!”
Why does it have to take so long?
My only comment, which is true for some other ideas, is what can be done for those who will lose their jobs in the insurance industry as a result. I am not concerned with the executives as they have made plenty of money, but for those who do the daily paper pushing and billing will surely need to be retrained, perhaps in another field. The transition will be the critical point in what we do. Perhaps what other countries did in their transition periods can serve as a sample rather than reinventing the wheel. In the end I am in favor of a single payer system, as long as it works for everyone, equally!