California...the New Canada?
There are many similarities between California and Canada, but is California ready to implement the single payer healthcare plan? True Canada is a Country and California is only a State; however, according to Countryeconomy.com, last year Canada’s population topped at 36 million and California about 33 million and the previous year, California’s economy was $2.44 trillion whereas Canada was $1.55 trillion. Does that mean that California can be the first State to sustain a single payer healthcare system like Canada? Well, the reality of it is that 23 to 14 California Senators believe so, and voted Yea in favor of SB 562, California’s single payer system version.
What is a Single Payer System?
It is a healthcare system in which all California (CA.) residents would pay the state via taxes for health care costs regardless of income, occupation and/or health status. Canada introduced the Canada Health Act (CHA) in 1984. Initially it was a “flawless” system insuring every resident with covered procedures without any out of pocket expense. Over time having procedures approved has become difficult as Bureaucrats, not Doctors decide what procedures and treatments are covered under CHA. This has forced residence of Canada to purchase supplementary insurance for procedures not approved in the CHA. The average wait time in Canada for a surgical procedure is approximately 4 months.
In California the SB 562 was modeled after CHA along with other countries’ single payer systems. If the law is passed, California’s single payer health plan would mean Californians would have to say goodbye to all our current medical insurance carriers. Along with the exit of the insurance carriers will be the loss of millions of jobs held with these insurance companies; therefore, increasing the unemployment percentage. It’s expected that in order for SB 562 to save money reimbursement rates for doctors and hospitals will drop. This may cause elite physicians, specialist, medical groups and hospitals to leave CA. In order to control cost, restrictions on advanced medications are also expected.
How much would this cost my family?
After an analysis from The State Senate Appropriations Committee, they’ve estimated that the implementation of the single payer healthcare will cost approximately $400 billion annually. Our total State spending for the next fiscal year is projected to be $290 billion, including $107 billion in Federal funds. The declaration that SB 562 is making, is that Californians spend $350 billion on healthcare currently. We only need to come up with the $50 billion difference. Similar to Canada, there is a vision of a 15% payroll tax with a business and sales tax increase to gather the $50 billion. For example let’s take a family of four bringing in approximately $80,000 per year and the children under age 19. The 15% payroll tax would be $12,000 per year for this family. That’s not including the increase in the sales tax for the family’s grocery bill and the tax their employers coinsurance the doctors and hospitals will no longer receive from Californians.
What about Medicare and Medi-Cal?
The SB 562 proposes that Medicare and Medi-Cal will be administered by the State not by carriers or medical groups. In order to accomplish this, CA will need approvals for federal funding waivers. These waivers are necessary to funnel the funds intended for Medicare and Medi-Cal through the single payer system. There is absolutely no guarantee this approval will be made by the current administration.
What will happen next?
Now that the majority of the CA Senate has voted Yea on SB 562 it must be approved by the California State Assembly. If it is approved by the State Assembly it would then have to be approved by Governor Jerry Brown. This bill has surpassed many hurdles most didn’t think possible. Single Payer Healthcare System can become our new reality in 2018. We encourage you to continue to ask questions, look up the facts, and contact your representatives. It is so easy for us to open our browsers and turn on our TV and only stay up to date with Federal level news.
State changes are what impact our day to day lives first and fast. State news is what we have to make a better effort to follow. You can trust that Casey Armstrong and myself; Nancy Bernal will be watching the live broadcast of the State Assembly and post the outcome of it all on our Facebook page. To be continued...
Benefits Account Manager