Friday, June 9, 2017

Top Analyst Warns Single-Payer Healthcare Bill That Just Passed the California Senate Could Bankrupt the State

The California state Senate’s vote to pass Ricardo Lara’s single-payer healthcare bill last week was a singular act of fiscal malpractice, writes Marc Joffe, who is the Director of Policy Research at the California Policy Center and whose research has been published by the California State Treasurer’s Office, the Mercatus Center at George Mason University, the Reason Foundation, the Haas Institute for a Fair and Inclusive Society at UC Berkeley and the Macdonald-Laurier Institute, among others.

 By failing to control costs and access to the program – and by leaving unanswered how or whether federal funds could be leveraged – Lara’s Healthy California Act amounts to a blank check for hospitals, doctors and pharmaceutical companies on the state Treasury, a blank check that could well bounce once it’s presented to Sacramento, according to Joffe.

The Healthy California Act proposes to cover
“all medical care determined to be medically appropriate by the member’s healthcare provider.” Further, plan members “shall not be required to pay any premium, copayment, coinsurance, deductible, and any other form of cost sharing for all covered benefits.”

Joffe argues that the bill shreds privately implemented cost controls that have proven themselves over decades. Kaiser Permanente, for example, operating since 1945, covers 8.5 million Californians through a system of managed care. Kaiser generally provides all healthcare services to its members, charging them a flat annual insurance fee and copays for physician visits.

Lara’s bill tosses out this model. With the state taking over all medical payments, Kaiser would be obliged to become a “fee for service” provider if it wanted to continue operating in California. The legislation would thus force more than 20% of Californians out of a system that effectively controls cost to the mainstream U.S. approach that has led to the world’s highest healthcare expenditures, says Joffe.

Further,  Lara’s bill provides free healthcare to any “individual whose primary place of abode is in the state, without regard to the individual’s immigration status.” With healthcare costs now averaging about $10,000 per capita, the state’s free healthcare will create a strong incentive for people to come to California illegally or overstay their visas.

And this incentive is not limited to foreigners; individuals from other states diagnosed with expensive medical conditions could legally move to California, establish residency and start obtaining free medical care.

By removing cost-control incentives and providing first-dollar coverage to all comers, the Healthy California Act is likely to cost well above the $400 billion mentioned in a Senate Appropriation Committee report. The number means the cost of Senate Bill 562 would be three times higher than the state’s proposed $124 billion general fund budget for next year.

Remarkably, though, Ricardo Lara did not even ask the California Legislative Analyst’s Office to score his bill.

Joffe warns, "The state Senate has passed a bill that, if it becomes law, will have the largest fiscal impact in the history of California, and it will do so without having an objective body of budget experts review the legislation. Given this lack of oversight and the aforementioned risk of serious cost overruns, the Senate’s ratification of Healthy California is the greatest case of fiscal malpractice in the state’s history – and one that threatens to flatline our state’s budget and economy."

The bill is supported by the crony California healthcarecomplex, including the bill’s sponsor — the California Nurses Association .

Now that the bill has passed the California Senate, it moves to the state Assembly and remains in play for a voter later in this year’s session.



  1. --- the state’s free healthcare will create a strong incentive for people to come to California illegally or overstay their visas. ---

    First of all, immigrants wouldn't overstay their visas. Tbey would, instead, overstay their PERMITS. You could be in the country LEGALLY withban expired visa. But you could also be in the country illegally if your permit expires, even if your vida is still valid.

    Second, people don't stay in the US lefally or illegally because of so-called "free healthcare." That's a LIE. The reason people decide to stay is because the process to get back in IF they decided to go back home is very painful, many times subject to arbitrary decisions by immigration officials (so much for Nation Of Laws®) or because of effective immigration enforcement at the border, which raises the level of risk for those who are already here.

    Why do some people think immigrants' incentive is "free healthcare" rather than the truth, that it is THE MARKET which invites immigrants in? Because those people merely want to dehumanize immigrants. Nothing more intellectually sophisticated than that.

    Just so that you know, people do get free healthcare services in Mexico. It may not be very good, but it exists. Thus the incentive to come to the US is not free healthcare (which isn't free) but good, solid WORK.

    1. torres you are a liar. the bill was sponsored by another speek like you to further the cause of illegals. go back to your failed narco state

  2. The new bill will not only invite people with expensive medical conditions to move to CA, but it will likely motivate people with higher salaries -- especially if a new payroll tax is implemented -- to leave. Thus, ALL CA revenues will decline.

    I hate to leave CA, but this might be the straw that breaks the camel's back.

  3. "Top Analyst Warns Single-Payer Healthcare Bill That Just Passed the California Senate Could Bankrupt the State"

    We can only hope so. Perhaps all those liberal socialist overpaid celebrities can pony up some cash??

  4. This website is calling bullshit on this. How in hell do people think an enire nation like Australia covers everyone for half of what the US spends? Drop your evil hatred of others being allowed to prosper. Copy Australia`s system and be done with it.