Cuts to Medicaid Could Thwart California’s Plans for Universal Health Care

May 19, 2017

The Healthy California Act proposes coverage for all medical care, including inpatient and outpatient, emergency care, dental, vision, mental health and nursing home care. 

By Lisa Renner

As Republicans work to dismantle the national Affordable Care Act, a bill to create universal health care coverage in California continues to wind its way through the legislature.

The Healthy California Act, introduced by state senators Ricardo Lara (D-Bell Gardens) and Toni Atkins (D-San Diego), proposes comprehensive health coverage with a choice of providers and services for every state resident. The plan would have no premiums, copays or deductibles.

“It’s time for California to lead the nation toward universal health care,” Lara said in an email.

The bill was approved by the Senate’s health committee last month and will be reviewed by the Senate’s appropriations committee next week.

Republicans in the House recently approved an $880 billion cut to Medicaid, the federal program that covers low-income residents as part of their repeal of Obamacare, making this a good moment  for California to become the first state to offer universal health coverage, said Michael Lighty, policy director of National Nurses United.

Yet if the proposed cuts to Medicaid become a reality, it will also be difficult to fund universal health care, said Anthony Wright, executive director of Health Access California, a consumer advocacy coalition that is in favor of universal health care.

“There’s a pure numbers problem,” he said, explaining that the proposed cuts would “put a wrench into any effort to expand coverage.”

Nor will the road to approval be easy. This is the fifth Senate bill since 2004 to propose a universal health care in California. In 1994, California voters rejected a ballot proposal for a government-run health care system. A likely sticking point for advancing this push for universal care is financing details, which have not yet been released.

The Healthy California Act is opposed by insurance companies and business groups. The California Chamber of Commerce called the bill a “job killer” in a written statement, disputing what it called the “two major premises of the bill,” that the government is more efficient than private business and that single payer systems would cost less than the current system.

The Healthy California Act proposes coverage for all medical care, including inpatient and outpatient, emergency care, dental, vision, mental health and nursing home care.

Residents could choose from a wide array of doctors rather than the narrow networks of some plans currently sold through the Affordable Care Act.

The health system would be managed by a new government agency called Healthy California. That agency would be administered by an unpaid board made up of health care providers and consumers.

The bill, though light on financial details, proposes to use money from Medicaid, Medicare and other federal funds and subsidies to pay for universal coverage.

According to a bill analysis for the senate health committee, a single-payer health system would likely result in reduced health costs because of reducing administrative expenses from multiple payers. Costs could also go down by the government using its bulk purchasing power to negotiate cheaper rates with health care providers, facilities and prescription drug and device manufacturers.

However, the analysis said that costs would be difficult to control, in part because it prohibits copays and deductibles and because it allows residents to choose any medical provider regardless of cost.

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