RoseAnn DeMoro, executive director of the California Nurses Association, told hundreds of nurses and health care advocates gathered for a rally at the Capitol that Democrats need to support a public-funded universal health care system in California. Angela Hart The Sacramento Bee
RoseAnn DeMoro, executive director of the California Nurses Association, told hundreds of nurses and health care advocates gathered for a rally at the Capitol that Democrats need to support a public-funded universal health care system in California. Angela Hart The Sacramento Bee

Capitol Alert

The go-to source for news on California policy and politics

Capitol Alert

Californians like universal care, unless they’re taxed

By Dan Walters

dwalters@sacbee.com

June 02, 2017 12:01 AM

A new poll indicates that most Californians support changing the state’s immense, insurance-based medical care system to one in which the state provides universal coverage.

However, there’s just one small detail: 65 percent support drops to 42 percent if a “single-payer” system requires new taxes, which, of course, it would.

The Public Policy Institute of California poll was issued on Wednesday, just hours after the California Nurses Association and other advocates of Senate Bill 562’s universal coverage laid out the taxes they say would make it feasible.

Never miss a local story.

Sign up today for a free 30 day free trial of unlimited digital access.

It could work, says a study by the Political Economy Research Institute, if federal, state and local governments continued to pay the lion’s share of Californians’ medical care costs, if overall medical costs could be cut by 18 percent due to centralized, nonprofit operation and if “two modest taxes” on business income and retail consumers were imposed.

“What this new study proves is that we can finally achieve the dream of guaranteeing health care for all Californians without the punishment of crippling out-of-pocket costs …” said RoseAnn DeMoro, head of the nurses’ union.

Maybe not. Those assertions from the liberal think tank appear more optimistic than realistic.

The proposal would not only cover all Californians who now have some form of health insurance, but nearly 3 million more – mostly undocumented immigrants – who lack coverage, and would eliminate out-of-pocket costs for everyone. Those are recipes for soaring costs, not the study’s claim of a $71 billion reduction in the projected $403 billion overall tab.

Nor does it account for the additional expense from increased health care use if out-of-pocket co-pays and deductibles are eliminated.

Virtually every health care study has concluded that requiring consumers to pay even token amounts prevents overutilization which drives costs upward.

It does not account for the expansion of coverage as more people move to California from other states or other nations for no-cost medical care.

Finally, it does not account for the system’s capacity to deliver on gold-plated promises.

Even now, the millions of additional Medi-Cal enrollees under Obamacare have great difficulty finding care because of low reimbursement rates.

If millions more are covered, those payments would have to increase sharply to lure doctors and other providers to a state whose living costs, especially for housing, are among the nation’s highest.

But even if all of the study’s rosy, if unlikely, scenarios were to occur, it still would require new taxes of some kind. It suggests a 2.3 percent levy on gross business revenue and a 2.3 percentage point hike in retail sales taxes, with some exemptions.

That’s where the PPIC poll kicks in. California voters have shown that they are willing to tax others – i.e. the rich or smokers – but unwilling to pay more taxes themselves for public services.

There’s a good way to settle the issue. Put SB 562 on the ballot, along with realistic taxes to pay for it, and let voters decide.