Newsom Slow Rolls Single-Payer Health Care Promise

Late last month, Gov. Gavin Newsom signed legislation to extend state-paid medical coverage to about a quarter-million Californians.

He did it in a ceremonious event in Fresno, typifying his recent official acts as he fights off a recall campaign.

"We're investing California's historic surplus to accomplish transformative changes we've long dreamed of – including this historic Medi-Cal expansion to ensure thousands of older undocumented Californians, many of whom have been serving on the front lines of the pandemic, can access critical health care services," Newsom said. He added that it would "bring California closer to universal health care coverage and advance comprehensive initiatives to ensure California's communities come back from the pandemic stronger and healthier than before."

The phrase "closer to universal health care coverage" is the most significant part of the announcement, because it evokes – and subtly changes – a promise that Newsom made as he was seeking the governorship three years ago.

During his 2018 campaign, the state Senate passed legislation to create a "single-payer health care system" that would, in theory, incorporate and supersede all other public and private medical insurance systems and fold in millions of Californians who lacked any coverage. Newsom heartily endorsed the measure, saying, there was "no reason to wait around."

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"I'm tired of politicians saying they support single-payer but that it's too soon, too expensive or someone else's problem," Newsom said, drawing praise from the California Nurses Association, the chief sponsor of the legislation.

The measure, however, contained no financing mechanism and the speaker of the state Assembly, Anthony Rendon, put the bill on hold, saying it would be irresponsible to act without a way to pay for it.

Once elected, Newsom continued to pay lip service to a single-payer system but never devoted any political capital to enacting it. Eventually, he stopped using the term and adopted, instead, the phrase "universal health care coverage," which is not the same thing.

As state finances have allowed, Newsom has incrementally added more Californians to the Medi-Cal program for health care for the poor, including blocs of undocumented immigrants who are ineligible for federally subsidized medical coverage either through Medi-Cal or the state's version of Obamacare, dubbed Covered California.

In theory, this incremental approach, if continued, could eventually extend coverage to every Californian, but it would be a heavy financial lift for a state budget that is heavily reliant on very volatile revenues from personal income taxes on high-income taxpayers.

When the 2017 single-payer bill was being considered, it was estimated that providing comprehensive medical coverage to 40 million Californians would cost $400 billion a year and simple inflation would probably raise that to $450 billion today.

The biggest hurdle would be to persuade the federal government, which currently picks up about half of Californians' health care costs through Medicare, Medi-Cal, Obamacare and coverage for federal and military members, to redirect that money to the state.

Even were the feds to chip in, which is highly unlikely, the state would have to absorb local government health care spending and money now paid out by private employers, then levy enough new taxes to close the remaining gap. The gap was estimated at $100 billion in 2017; it's surely larger now.

The bottom line is that even in a state as blue as California and with an advocate in the governor's office, single-payer health care is a virtually impossible goal – hence the shift in nomenclature to "universal health care coverage" and the shift in tactics from "no reason to wait around" to year-by-year incrementalism.

CalMatters is a public interest journalism venture committed to explaining how California's state Capitol works and why it matters. For more stories by Dan Walters, go to calmatters.org/commentary

Dan Walters

Columnist