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June 12 2017

Should California Test Drive Single-Payer?

by Charlotte Hays

Governor Jerry Brown has indicated that he might not sign the single-payer health care plan for which the California legislature had voted--yes, it's that bad. But the Wall Street Journal this morning proposes that  Brown sign the bill and let California test drive single-payer for the nation. Here is some of the editorial:

The legislation guarantees free government-run health care for California’s 39 million residents—no co-pays, deductibles or insurance premiums—as well as virtually unlimited benefits. Patients could see any specialist without a referral and receive any treatment that their provider says is medically appropriate. Democrats seem to believe this will have no effect on the incentive to use health care.

A University of Massachusetts Amherst study commissioned by the California Nurses Association—which favors government-run health care—claims that single-payer would reduce health-care spending by $37.5 billion a year. This miracle would be achieved largely by slashing administrative costs as well as provider and drug reimbursement rates. According to the study, letting people get treated whenever and wherever they want would save money. We don’t think Jonathan Gruber did this study, but he could have.

The study also asserts that California could reallocate $225 billion a year in Medicaid, Medicare and ObamaCare spending for single-payer assuming a federal waiver. Thus the legislature would only have to come up with $107 billion.

The Senate didn’t pass the bill with a funding mechanism, leaving that to the Assembly. The Senate appropriations committee contemplated a 15% payroll tax, but the nurses’ study suggests instead a 2.3-percentage point increase in the state sales tax (to 9.55%, not including local add-ons) and a 2.3% business gross receipts tax on revenue exceeding $2 million. The latter would be baked into the cost of everything from a taco to a Tesla. The lesson here would be to show middle-class taxpayers that there aren’t enough rich people even in Silicon Valley or Hollywood to pay for this.

It is, as the editorial suggests, tempting to force progressives to live with the consequences of their actions before adopting single-payer to the rest of the country.

Tempting--but there are drawbacks. It's going to cost a bundle of billions when it fails (which is pretty much inevitable) and somebody will have to bail out California.

Whaddaya bet the American taxpayer will be required  to pony up for this experiment?

There is of course also the toll in human suffering it wil occasion as people will not be able to get good medical services as the single-payer system unravels. 

 

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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