California: One state’s rocky and expensive road to single-payer

By Susan Rupe

The efforts to establish a public option or a single-payer health care system in the U.S. have died down for now. But those efforts have moved on to the state level, and two people who are studying the issue gave an update on them during this week’s National Association of Benefits and Insurance Professionals Capitol Conference.

Vermont was the first state to consider a single-payer system, said Lauren Crawford Shaver, executive director of the Partnership for America’s Healthcare Future, of which NABIP is a member. But the state was unable to raise enough tax revenue to get the program off the ground and it was set aside.

Washington state established a public option administered by private insurers, she continued. But she said only about 2% of that state’s eligible population is covered under it, and the premiums are higher than those charged by insurers on the state’s health insurance exchange.

California targets state health system

California is the latest state to take up the issue of a publicly funded health insurance system but the road to that system has been rocky and expensive, said Faith Borges, legislative advocate at California Advocates.

The efforts to establish single-payer universal health insurance in California began in 1994, when voters rejected a single-payer proposal in a ballot initiative. In 2017, Senate Bill 562 was introduced, which would enact the Health California program providing a comprehensive universal single-payer system to cover all California residents.

Borges described SB 562 as “a complete government takeover of health care” that would eliminate all other types of health insurance, including Medicare. This bill died in the California Assembly because there was no funding mechanism in the bill, which had an estimated price tag of $400 billion per year.

Assembly Bill 1400 was introduced during the 2021-22 term. This bill would have created a system for single-payer universal health care, however it would have permitted residents to purchase supplemental health coverage if they desired. This bill had an estimated price tag of $160 billion in new state taxes annually, and it also died in the California Assembly.

Universal, single-payer program proposed

In 2023, Assembly Bill 1690 was introduced, declaring, “It is the intent of the legislature to guarantee accessible, affordable, equitable and high-quality health care for all Californians through a comprehensive universal single-payer health care program that benefits every resident of the state.”

Borges described AB1690 as “a placeholder bill.”

“The sponsors of the bill want to have a vehicle to create a state-funded single-payer system,” she said.

California is launching a new state agency, the Office of Health Care Affordability, in an attempt to bring down health care costs. But its director, Elizabeth Landsburg, said the agency’s goal isn’t necessarily aiming to reduce costs but to slow the rate of growth of those costs. Meanwhile, California Gov. Gavin Newsom announced that his state will be the first in the nation to offer universal access to its health coverage regardless of immigration status, and that California will begin producing own insulin to make it more affordable for everyone.

“Agents support universal health care,” Borges said. “We want everyone to have health care and we don’t want to exclude anyone. California is on track to achieve that by making MediCal open to everyone. This is much more fiscally prudent way than scrapping the whole system. Scrapping the entire system is not the best way forward.”

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.