Single Payer Can’t Wait
California is huge, and it is blue. Why don’t we have single payer healthcare?
California assembly speaker Anthony Rendon scuttled SB 562, the law that would bring single payer universal healthcare to the world’s sixth largest economy. A Democratic legislator, with a supermajority and a popular Democratic governor, decided the bill had too many problems and that the ‘focus should be on the Senate healthcare bill.’ As such, the bill won’t come back up for debate until 2018, a full year after the CA Senate passed it, and in the middle of a contentious election year. Today is the rules committee meeting where he will motion for such a move and the people behind this bill, including an upswell of regular people who want to see this done, are calling their representatives to pressure them and Rendon to keep the bill alive.
There is plenty of analysis and opinion this effort, but the only one that matters is Anthony Rendon’s, since he and his party leadership alone have the power to advance the legislation, amend it, or kill it. It looks like they will kill it.
But why? Isn’t it a flagship goal of the Democratic Party to bring affordable healthcare to everyone? Don’t they want to alleviate crippling debt, substandard or nonexistent care provided to low income families, and the thousands of preventable deaths caused by gaps in the insurance market and the failures of the industry at large? Isn’t it a popular proposal at large?
Some say yes, the Democrats are the party of single payer. After all, there was a time when universal social programs was the trademark domestic agenda for the Democratic Party. Even the Clintons tried to create a “Health Security Card” which, while falling short of more successful and critical programs like the UK’s NHS, the original Hillarycare more closely resembled a national insurance program than what the Affordable Care Act ended up being. Elizabeth Warren said just this week that Obama sold Democrats and Americans on “a conservative model that came from one of the conservative think tanks that had been advanced by a Republican governor in Massachusetts.” She is finally supporting a push for single payer at the federal level. Warren Buffett, the man who has profited from mandatory insurance more than any other human being, says single payer would a good thing.
So why would a Democratic leader with a supermajority and a friendly governor kill hopes for a single payer system?
There are two ways to approach this question.
One: you could give Rendon the benefit of the doubt that he does in fact want to turn healthcare into the public good that it’s meant to be, and that his reasons for sidelining the bill is so that it can be approved, its constitutional issues addressed, and the political climate made perfect for it to pass and succeed. This would be a worthy goal, because there are in fact major hurdles to the success of single payer healthcare at the state level, and they need to be dealt with.
Two: you could assume the simpler and more likely scenario that Rendon doesn’t care much about universal healthcare, but that the party’s donors from the insurance industry sure do. Statements saying that the focus should be on Trumpcare seem like transparent attempts to deflect the desire for progress here at home into more generalized rage against the already unpopular GOP in Washington.
“How can you talk of the poor
when the Saracen sleeps in Jerusalem?”
If Rendon is bowing to pressure from donors, conservative wonks, and fellow Democratic powerplayers, then he is a coward. If the Democratic leadership in California or DC thinks the Obama model of healthcare reform – take absolute power, propose your opponent’s plan, fail to get even that, declare victory, watch as your opponent sabotages the country – is going to fly any more, they are sorely wrong. Major political movements have formed around healthcare in the last ten years, on both right and left. This is not an area of politics that can be managed by corporate liberal tinkering and means-testing, hand-in-hand with Merck, Kaiser and the AMA.
If Rendon is serious about his concerns for the single payer’s success, then he has many tools to help improve the bill and its chances in the legislature and the courts. Backburnering the bill until everyone is home campaigning is not one of them. So let’s go through some of those potential issues and the tools at Rendon’s disposal that could make Single Payer a reality.
It needs a reserve fund.
States may not run a deficit. They can borrow money, in the form of bonds, but they cannot spend more money than they take in. That ‘balanced budget amendment’ that conservatives want at the federal level? The one that would jeopardize security, health and basic infrastructure programs in any time of economic or national security crisis? It already applies to all states, including California. The reason Medicare and Medicaid are so successful is the reason why all government-backed spending creates lucrative and stable (if corrupt) industries – the federal government can borrow an effectively endless amount of money to pay their bills. Through inflation, immense credit lines, and the constant stream of compulsory taxes, the government can fund universal programs like SSI and Medicaid and never miss a payment. Even when the economy tanks and states like California are struggling to lower spending and increase revenue, Uncle Sam can always cut a check or make an ironclad I.O.U. Wars are fought on this credit card.
Another recession will happen. Business and credit cycles, and the crises they frequently create, are built into capitalism. When that happens, and it will, any state-backed program large enough to provide healthcare to the entire population will inevitably have more bills than the state can afford to pay. This is partly due to the countercyclical nature of health spending; poorer people need more healthcare, and the lower their income, the more costs are borne by the state. If California could borrow to cover those dips and help ‘smooth’ the curve during rough time, then such a program would be a huge benefit in escaping said recession, providing a constant stream of employment dollars and wellness to millions when they need it most. But because California cannot borrow to pay for these programs, they instead would have to send an I.O.U., or shut down the program altogether.
Such a failure would not only destroy hopes for single payer in the state, it would likely damage efforts nationwide. This is ironic considering that such a failure would happen because it was not implemented nationwide, but that won’t matter.
There are solutions to this problem, but they are all politically difficult. Probably the simplest one is to create another “rainy day” fund like the one Governor Brown pushed so hard for following the last recession. Such funds are a way for the state to bank money during the good times to use in the bad times, to avoid cutting critical programs in education and social welfare. A single payer regime would have even more need of such a fund, and it would require a great legislative effort to implement.
The existing fund has $7.2 Billion saved. In 2009, Californians spent $230.1 Billion on healthcare. So you can see how even a displacement of 2-3% tax revenues intended for the program would wipe out the state’s existing reserves in a year. A successful reserve for a state single payer plan would need an accompanying special reserve tax to build such a fund, and rules for how to dip into reserves and postpone payments to providers in the case of financial crisis. Rendon could propose such an amendment today. Anything short of that would be an invitation for collapse, one that could doom the cause for a generation.
It needs a popular referendum.
Californians narrowly passed a proposition in 1988 requiring the state to spend at least 40% of its budget on education. The law has been made more complicated since, but it basically locks the growth of public spending to the growth of public education. Where it causes inflexibility is when trying to expand state spending in any direction other than toward growing public education.
According to Prop 98, any new tax must be 40% apportioned to schools. This would be impossible to square with the huge payroll tax necessary to support single payer. The goal of a Health Payroll Tax would be to cover all health spending under a single tax, swapping your health premium costs (and your employer’s) for a single tax that guarantees baseline care for everyone. Adding 40% to that tax to support education would confuse the otherwise straightforward program, and it entangle these two important aspects of public spending (and the related unions) in a zero sum game forever.
The only way to get around Prop 98 is to pass a popular referendum that gives the new healthcare tax permission to do so, effectively amending the California state constitution. Skeptics think this would be its downfall. Asking residents to impose a 25-30% payroll tax on themselves while putting Kaiser Permanente out of business would be a tall order. But many people welcome that fight. It’s the very reason many people got into politics in the first place. Use democratic power to fight entrenched profit interests at the heart of healthcare and provide universal care to all. Such a referendum would be a watershed moment for liberalism and American socialism. Preparing for that fight would take years.
Waiting until 2018 to even consider a bill means such a proposition would not be on the ballot until 2020 at the earliest, but 2024 is more likely. Just in time for the Olympics to give Governor Eric Garcetti a leg up to the presidency. Maybe then the Democrats will discuss single payer.
The special interest spending in such a fight would be gargantuan. The popular struggle to get it to pass would be on the scale of other great progressive victories. Rendon has the power to start that effort. Well-funded Democrats in the healthcare committees of both houses have a vested interest in the healthcare industry as is. It would never occur to them to lead such a referendum effort. Call them and suggest it.
It will be outside groups who push this effort. We could end up with a law written by an ambitious liberal attorney or social action group who runs a self-funded prop campaign to make this happen. Such an effort would face opposition from both parties.
Rendon and the Democrats could get this train rolling the right way now, if they wanted to. But they don’t.
It needs Medicaid funds and flexibility.
Federal and state spending on Medi-Cal would make up nearly half of all spending in a single payer program. The GOP and White House want to slash Medicaid spending. This would create a major hurdle for the implementation of SB562. Rendon listed the Trumpcare bill as the main impediment to the bill (even though it’s not the reason he killed it).
Stopping the AHCA should be the main focus of the national party. Proposing and implementing a viable alternative that actually brings the number of ‘uninsured’ to zero is an essential part of that.
If Trumpcare passes, it will drastically alter the financial reality of SB562. Without federal dollars, the state would need to impose taxes that would be politically and financially impossible to pass. (See issues with Prop 98 above.)
So Rendon is right when he says the AHCA must be defeated if state level single payer is to succeed. But how could it possibly be that the entire legislature and governor’s office of the largest state in the country is unable to focus on more than one thing at a time? How is the full apparatus and political capital of a supermajority totally consumed by a federal law over which they hold no influence?
It isn’t. Rendon just doesn’t want to rock the boat when there is such a clear and simple enemy to be against. He and Democrats don’t have time or inclination to be for anything. It is enough to be against Trump and the GOP. Any criticism otherwise is abetting the enemy.
The false choice between stopping the AHCA and enacting single payer health care is a particular favorite this month. The folks who spent the entire election blaming Bernie Sanders and Jill Stein for tarnishing HIllary Clinton’s pristine character and reputation now say BernieBros want you to die. Where did this idea come from? Is there some kind of centrist mantra that proposing any kind of real policy while you’re opposing policy you detest is counter-productive? Why do they think this?
They don’t. They need to protect the ACA and Obama’s reputation more than they want to cover the uninsured. If they give in to the wave of public support for single payer, they will have to admit that Hillary was wrong and that Bernie was right, and that ‘purity tests’ from the left aren’t a sexist/racist tool to sabotage Democrats, but actually based on helping regular people survive in this meat grinder of a fucking world.
So why can’t this bill wait for all these issues to be addressed?
Because people die everyday from being unable to afford care. They go to jobs that underpay them and treat them poorly because they fear losing their insurance. People are bankrupted because of sudden and often treatable or preventable illnesses. The moral imperative is crystal clear. The practicality of any solution is much harder. But we pay these people to solve these problems, and they claim to be the experts in policy and political strategy. For such a group of qualified experts, holding both the executive and legislative branches, in an era of mass mobilization against an unpopular foe, you’d think they could take the steps necessary to advance a truly social democratic vision. But they aren’t, and that’s why they need to hear from us, before it’s too late.
Call your representative and tell them you want SB562 kept alive, its issues addressed, and this campaign for health security and justice to continue.