Go-It-Alone CA Healthcare Plan Won’t Fly

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

Go-it-alone California has staged daily dramas of opposing the new president and even talking about separating from the union. But the issue that will test whether California can indeed stand on its own is healthcare. The demand from the left grows that California go single payer. Even leading gubernatorial candidate Gavin Newsom is on board. But, going it alone on single payer health care is not going to happen for financial reasons.

Put aside for the moment that the California single payer plan would need check-offs from the Congress and president who have no compunction to assist the state that throws a stream of darts at both institutions. Even if the state continues to get its accustomed flow of funding from the federal government, the financial obligation of single payer as envisioned with no deductible and no co-pays would be massive. The lack of funding mechanism is what blocked the senate approved health care plan, SB 562, from advancing in the assembly.

Building a single payer health care edifice on top of the state’s current financial structure is too great a risk. The financial earthquake of a recession will come someday and the promises of a single payer system would not be met in such a circumstance.

Where would the money come from then? Would we start requiring payments from those who are not required to pay under single payer proposal? The typical answer when more money is required for government is to increase a tax on the upper-income taxpayers or businesses. But because the state’s tax system relies so heavily on commerce and the rich, a drop in government income during a recession is precisely because those sources have dried up during the economic downturn.

Pushing forward on single payer in California has other purposes, of course. Symbolically, the idea is to keep up the pressure for adopting some kind of single payer or universal health care plan on the national level.

Proponents of a California single payer plan hope that creating a universal plan can serve as a model for a national effort. But, there is a downside for single payer advocates if the funding needs cannot be overcome in California. It would send an adverse message on a national single payer plan. Like the California proposal, the universal health care plan introduced by Sen. Bernie Sanders did not have a funding mechanism attached to it.

The healthcare matter will be a prime issue on the national scene. Any single payer or universal health care success, if it happens at all, almost certainly would have to be a national program. The idea will stay active in California and be part of the governor’s race. But as rich as California is, under the state’s tax system, a single payer plan would be a rickety and unsteady program that likely would collapse during hard economic times.

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