California Has the Means to Create a Single-Payer Health System, Despite the Assembly Speaker's Decision to Stop a Single-Payer Bill

The push for single-payer health care in California has been a hopeful counterpoint to congressional GOP efforts to decimate health safety nets. But in late June, Democratic California Assembly Speaker Anthony Rendon pulled SB 562, a Senate-passed bill to create a statewide system to eliminate all private insurers. Rendon said the Senate bill lacked many specifics, such as a revenue stream for the estimated $140 billion needed annually to cover caring for 37 million residents in addition to all federal health program spending.

That characterization is not entirely true. The bill’s leading advocate, the California Nurses Association, released an extensive report in June that said the revenues could come from a 2.3 percent increase in several taxes: primarily state sales taxes and gross receipts for businesses after their first $2 million, which would exempt small businesses and also includes a broad range of exemptions including housing, utilities and service expenditures. The Senate bill omitted any revenue stream. CNA hopes Rendon can be pressured to revive the bill before a mid-July deadline.

AlterNet’s Steven Rosenfeld spoke with Michael Lighty, CNA director of public policy, about what’s next for single-payer in California.

Steven Rosenfeld: What happened in the Assembly to stop single-payer from going forward? We've heard a lot of things, but you were there.

Michael Lighty: Essentially the Speaker of the Assembly, Anthony Rendon, decided to abort the process at the beginning of Assembly consideration of SB 562. Rather than refer the bill to its first policy committee, which is Health, he decided to just hold it. That represents a denial of democracy and is inconsistent with his claim that the bill needs work, because precisely the process that would have constituted that work was the one that he stopped. We see this as an unusual and extraordinary act to essentially misrepresent the piece of legislation before his House could even consider it.

SR: He said it didn’t have a funding mechanism, but I suspect there’s more to it than that because as you said, each side of the legislature is fully capable of analyzing and assessing revenue options.

ML: Exactly.

SR: What do you think the resistance was really about?

ML: Well, if you look at it, about a week or so before he took this act, David Townsend who is the lead political consultant for those Democrats oriented to the business agenda and who takes deep and large amounts of money from the health insurance companies, from the prescription drug corporations and from the hospital corporations and those same donors contribute to Speaker Rendon, Townsend, about a week before Rendon took his action, called for him to do so in an op-ed in the Sacramento Bee. There is clearly a direct connection because the most vociferous opposition from assembly members is coming from those same Democrats who get that same kind of corporate money and for whom Townsend works.

It’s not that subtle. Just follow the money. Then, of course, there is a whole set of other actors who don’t want to see this bill beyond the healthcare industry itself. There are advocates and reformers who prefer to incrementally change the present system but never take on the private insurance companies. They’re fine with slowing the momentum of this hugely popular bill.

SR: Let’s break that down. Are the same corporate critics who are trying to stop this in California also active in the debate in Washington? Are they taking sides against the House-passed bill and the Republican Senate healthcare bill?

ML: Well, yeah. Some of them are on the hospital side. I don't think the prescription drug corporations have really weighed in particularly heavily on the GOP bill. They’re getting everything they want I guess from Trump’s FDA. Then the health insurance companies are very moderate in their reaction to the evisceration of the present healthcare system that the GOP bill represents. So I think that they kind of like the tax subsidies that are subsidizing their profits and the Republican bill would continue that, although in a much worse form for patients. So it’s a pretty good deal for the insurance companies. SB 562, not surprisingly, is much more of a threat to those interests than the GOP bill.

SR: So they’re taking the same position nationally as in California, which is basically, protect our profits above all else.

Michael Lighty: Exactly. This is the health care industry. It’s not a system based on care giving. That’s actually a kind of consensus position. Elisabeth Rosenthal has written about that, the transformation from care giving to an industry devoted to revenue and profit. So you’ve got the private insurance companies in California since 2011 making $27 billion in profits. They wouldn’t make those under SB 562 because they wouldn’t be doing that business.

SR: Let’s go back to SB 562. I know a lot of people were waiting for your revenue analysis. Did it come out too late? Would it have been more helpful if it looked at a broader range of tax options? I suspect it would have been criticized and attacked no matter what.

ML: It is true that it would have been criticized and attacked, but it hasn’t really been effectively criticized because no one engages with the methodology or even a critique of those particular financing sources. They just dismiss it because it was, you know, sponsored by the California Nurses Association.

The engagement level is quite superficial. If they were to look at it deeply, I think they would see that in fact it does provide kind of the traditional way of funding these state single-payer and even federal healthcare through a payroll tax [increase]. It does have a provision for what that would be, and more creatively and we think politically viably, is a proposal for a gross receipts tax [increase]. Then with a small sales tax as well that has exemptions to make it progressive.

We actually think that, yeah, engage on that. If there are alternatives, let’s have at it, but you can do that through the regular [legislative] process. The financing plan came out as soon as possible. To achieve that deep analysis in that time frame is unprecedented. So it did come out toward the end of the Senate process, but certainly in plenty of time. If these were true supporters of Medicare for all systems at the state level, if they really supported single-payer, they would take it up and engage and they haven’t. Rendon stopped it instead.

SR: The big question that was not talked about was whether California could do this. Then what other tax options might be fair or equitable was never discussed. California’s economy is as big as countries like Italy and Canada that have single-payer. Do you think legislators get that?

ML: No. They’re accepting this mainstream media portrayal of Rendon’s position as legitimate when it’s not. He doesn’t even know what’s in the bill. He made remarks that made it clear he hadn’t even read like what the benefits are of the bill. He claimed that he was on top of the process, but we had met with his own policy staff who told us to address a set of issues that we then addressed in 17 amendments we provided to the bill’s author two hours before Speaker Rendon stopped the process. You’re right. There’s no engagement at that level and if there were, people would understand the opportunity this presents; [that] it still does.

We’re not totally out of the picture here. Speaker Rendon could move this bill to the Assembly Health Committee. They could hold a hearing on July 11th and meet all the existing deadlines. It’s by no means too late today, but you got to understand that the Democratic leadership in Washington didn't want to talk about single payer. Obviously the healthcare industry doesn't want it on the table. It’s a reform that's supported by 80% of Democrats nationally. We had a poll showing that 70% of Californians supported it. Even after the industry arguments, it was 58% [support]. The politics are completely solid for it. As you say, the financing is entirely doable, so why is it being stopped by all these players? It’s certainly not because we can’t address all the issues they raised.

SR: What's next then in California? The nurses have held protests at Rendon’s office. What’s the most effective thing you can do?

ML: The most effective thing we can do right now is maximize pressure on Speaker Rendon because A, he still has time to act, B, it sends a clear message that we’re not going to stop until we win guaranteed healthcare for all Californians, and that if he thinks he is protecting ‘his members’ as he has asserted, this shows that actually he’s not. He’s jeopardizing their political future instead.

SR: While the push goes on in California, what is the impact of what’s happening in Congress? Does it help? Does it hurt? Does it underscore that California needs a solution on its own?

ML: That’s the point. California has to chart its own course because it can’t be subject to the dominance of the healthcare industry in Washington and the inability to craft a solution that can really guarantee healthcare in the immediate future. Whereas in California, which has a two-thirds Democratic legislature and a Democratic governor it could. It could do that. It does hurt our effort that this, if the GOP bill were to pass, the [federal subsidy] monies would be lessened over time. But that starts in 2020 and later. So that is again an argument for urgency now because if we start now we can actually have a system up and running by then.

Then also the GOP [federal legislation], the uncertainty around healthcare and people’s ability to get the healthcare they need, creates the urgency to act. The anxiety that people feel is real and only this type of reform of SB 562 or Medicare-for-all nationally, an approved Medicare-for-all, would provide peace of mind. Ultimately that’s what we offer, is peace of mind to individuals, to businesses, to society. Speaker Rendon is employing the tactics of secrecy and denial to harm and extend, to harm people and extend human suffering.

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