California Senate Bill 562 would create the Healthy California program “to provide universal single payer health care coverage and a health care cost control system for the benefit of all residents of the state” with the catch that “this bill would prohibit this act from becoming operative until the Secretary of California (HHS) gives written notice…that the Healthy California Trust Fund has the revenues to fund the costs of implementing the act.”  Which means they need Federal waivers to run their own Medi-Cal and related program reimbursement and also receive federal funds directly for those services, as well as tax revenue, since there will be no premiums charged, copayments, or deductibles to recipients of care under the act.  Essentially “it is further the intent of the Legislature to establish the Healthy California program to provide universal health coverage for every Californian based on his or her ability to pay and funded by broad based revenue”

What is surprising?

  • That they intend to pay providers on a “capitated” (fixed fee) basis and that they will somehow be able to negotiate not just with all hospital systems but doctors as well. In a later section it discusses payment by fee for service (which by itself has no means of cost control) “until another payment methodology is established by the board”
  • That this includes coverage for Long Term Care – though that is related to taking over Medi-Cal, demands will be made for improvements and thus increased costs
  • “This title does not preempt any city or county from adopting additional health care coverage for residents in that city or county that provides more protections and benefits to California residents than this title”
  • Carriers seem to disappear unless they want to offer coverage that supplements what is offered here. The “good news” however, is that “the board shall provide funds from the Healthy California Trust Fund (or other funds as appropriated) for a program of retraining and assisting job transition for individuals employed or previously employed in the fields of health insurance, health care service plan and other third party payments for health care or those individuals providing services to health care providers to deal with third party payers for health care, whose jobs may be or have been ended as a result of the implementation of the program.”  So…everyone in health insurance – agents, carrier employees, third party administrators – will be given training for new jobs, paid for by taxpayers, while an entirely new bureaucracy is created, again with taxpayer dollars, to administer the new plan?
  • The program is allowed to pay for capital expenditures incurred by any non profit health facilities

The main line – “every resident of the state shall be eligible and entitled to enroll as a member under the program” and “resident” is defined as “an individual whose primary place of abode is in the state, without regard to the individual’s immigration status”

Most of the bill is given over the fundamentals of governance, which include appointment of a general board of 9 and then a public advisory committee with 22 assorted members.

That’s it.  Twenty pages.  The projection of a $400 billion cost to enact and implement.  Details to follow…but when, how and what will they show?  And isn’t it a political truism that any projected cost will almost always double when it is a government project?  Money which, by the way, California does not have.