Negotiations between the state of California and federal agencies will seek to identify paths toward a universal health care system after Gov. Gavin Newsom signed a measure into law on Oct. 8 that establishes a working group to facilitate such discussions and negotiate funding opportunities with the federal government.
Senate Bill 770, authored by Sen. Scott Wiener (D-San Francisco), mandates that the California Health and Human Services Agency pursue waivers from the federal government—meaning a request for permission to redirect funds—to allow the state to use federal funding to restructure the state’s health care coverage system.
“California must continue our progress toward universal health coverage,” Mr. Wiener said in a June statement.
“SB 770 advances that goal by requiring the state to rapidly gather information about our options for securing federal healthcare funding streams. This information will be critical to construct a policy framework for any universal healthcare system, including single-payer.”
A single-payer system would consist of government-run health insurance, without the option for other companies to offer services. Proponents say it would lower costs and improve access, while critics argue the opposite is more likely to occur.
The author said such legislation is necessary because of increasing health care costs and the high cost of living.
“In the wake of COVID-19’s devastation, and as costs for working people have skyrocketed, the need to provide affordable healthcare to all Californians has never been greater,” Mr. Wiener said in March when he introduced the proposal. “This bill takes tangible steps on a concrete timeline toward achieving universal and more affordable healthcare in California.”
Operating under the direction of the state’s Health and Human Services Agency, a 17-member working group will be established with eight members appointed by the governor and four each by the Assembly speaker and the Senate resident pro tempore. The group is required to include a variety of stakeholders, including health care, labor union, and employer representatives.
Meeting quarterly, the working group must advise the governor about negotiations with federal regulators and provide quarterly reports to lawmakers.
“This approach retains flexibility for the Administration and Legislature to decide how the system will ultimately be structured and allows for engagement with stakeholder groups every step of the way,” Mr. Wiener said.
A so-called Healthy California for All Commission to develop a single-payer health care system was established by Mr. Newsom in 2019. The group engages stakeholders and issues reports to the Legislature—with one describing the total cost of implementing such a system at about $500 billion.
“We must move the process along in order to avoid the hundreds of billions of dollars in healthcare costs projected by the Governor’s Commission if we fail to act,” he said.
Supporters suggest the bill is needed to gauge the potential for partnering with the federal government and identify funding sources.
“This bill is not an attempt to decide each issue or debate, but to facilitate California’s efforts to work through some of the questions as well as to get clarity on the ‘threshold issue’ of federal approval of the use of Medicare, Medicaid, and other federal dollars,” Health Access California—a nonprofit consumer advocacy group—wrote in the legislative analyses. “The ability or willingness of the federal government to grant such approval would then shape what California can and should pursue in its ongoing health reform discussions.”
Determining a “threshold” level—the amount the federal government permits the state to repurpose—will allow lawmakers to better understand the cost to taxpayers, according to supporters.
With about $200 billion already coming from the federal government to cover existing health care plans yearly, the state will be seeking to repurpose those funds to a single-payer system—leaving taxpayers to cover at least $300 billion if the federal government agrees to the negotiations, according to analysts.
One group, though supportive of a single-payer system, opposed the bill based on its approach and reliance on a working group to provide solutions.
“The Legislature must not rely on an unaccountable workgroup to ensure that all Californians have a right to comprehensive health care but should instead develop and pass legislation to approve a single-payer program before the development of a federal waiver application can begin in earnest,” the California Nurses Association stated in the analysis.
Other opponents, including health care professionals, insurers, and the California Chamber of Commerce, argued the new law is too costly—with taxes for single-payer estimated by analysts to increase by $300 billion annually—and that it creates uncertainty and could cause some people to lose access to their existing health care plans.
“The ultimate goal is to force all Californians out of their existing health coverage—including Medicare, employer-based coverage and ACA plans—and into a new untested government-run system, with no ability to opt out or choose private coverage instead,” the groups wrote in the legislative analysis.
“Any waiver obtained through this bill would not be permanent and could be disallowed by Congress at any time, eliminating 40% of the funding for the new health care system. Finally, this bill provides little details on how the transition to this system would be achieved, how providers would be reimbursed, and could ultimately cause providers to leave the state.”
