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Author Topic:   California will rock (economically speaking) with single payer. Gavin Newsom in 2018!
Posts: 1306
Joined: 12-22-2015

Message 1 of 2 (822473)
10-25-2017 4:20 PM

Look at the numbers.

Look at the facts.

California will pay 100% of health care bills with a single payer ( cost controlled or no cost controls) type of plan.

(Not even Canada and Europe have a plan with 100% of co-pays covered)

The doctor and drug costs will be 100% covered and it would be unprecedented.

The California health system gets around $200 billion already from the federal and state government, while the other $200 billion is paid by individuals, businesses and insurance companies. (I forget the exact amount but read the article)

A wavier from the feds can allow the $200 billion to be put into a giant single payer pot with the state covering the other costs(think "free stuff" as individuals won't pay a thing).

A $400 billion cost would require a 15% additional income tax if the state income tax is all that is considered open for an increase. (leaving out capital gains, sales taxes, property, hotel, snack, etc.)

But what if cost controls were implemented (plus other tax options were considered)?



Op-Ed Single-payer healthcare for California is, in fact, very doable

Robert Pollin

June 21, 2017, 4:00 AM

The California Senate recently voted to pass a bill that would establish a single-payer healthcare system for the entire state. The proposal, called the Healthy California Act, will now be taken up by the state Assembly.

The plan enjoys widespread support — a recent poll commissioned by the California Nurses Assn. found that 70% of all Californians are in favor of a single-payer plan — and with good reason. Under Healthy California, all residents would be entitled to decent healthcare without having to pay premiums, deductibles or copays.

But as critics of the bill have pointed out, a crucial question remains: Is Healthy California economically viable? According to research I conducted with three colleagues at the University of Massachusetts, Amherst, the answer is yes.

Enacting Healthy California would entail an overhaul of the state’s existing healthcare system, which now constitutes about 14% of California’s GDP. In particular, it would mean replacing the state’s private health insurance industry with government-managed insurance. Our study — which was also commissioned by the California Nurses Assn. — concludes not only that the proposal is financially sound, but that it will produce greater equity in the healthcare sector for families and businesses of all sizes.

California will spend about $370 billion on healthcare in 2017. Assuming the state’s existing system stayed intact, the cost of extending coverage to all California residents, including the nearly 15 million people who are currently uninsured or underinsured, would increase healthcare spending by about 10%, to roughly $400 billion.

That’s not the full story, though. Enacting a single-payer system would yield considerable savings overall by lowering administrative costs, controlling the prices of pharmaceuticals and fees for physicians and hospitals, reducing unnecessary treatments and expanding preventive care. We found that Healthy California could ultimately result in savings of about 18%, bringing healthcare spending to about $331 billion, or 8% less than the current $370 billion.

How would California cover this $331-billion bill? For the most part, much the same way it covers healthcare spending right now. Roughly 70% of the state’s current spending is paid for through public programs, including Medicare and MediCal. This funding — totaling about $225 billion — would continue, as is required by law. It would simply flow through Healthy California rather than existing programs.

The state would still need to raise about $106 billion a year to cover the cost of replacing private insurance. This could be done with two new taxes.

First, California could impose a gross receipts tax of 2.3% on businesses, but with an exemption for the first $2 million of revenue. Through such an exemption, about 80% of all businesses in California — small firms — would pay nothing in gross receipts tax, and medium-sized businesses would pay an effective tax rate of less than 1%.

Second, the state could institute a sales tax increase of 2.3%. The tax would not apply to housing, utilities, food purchased for the home or a range of services, and it could be offset for low-income families with a 2% income tax credit.

Relative to their current healthcare costs, most Californian families will end up spending less, even with these new taxes, and some will even enjoy large gains. Net healthcare spending for middle-income families would fall by between 2.6% and 9.1% of income. Most businesses would also see a drop in spending. Small firms that have been providing health insurance for their workers will see costs fall by 22% as a share of payroll. For medium-sized firms, costs will fall by an average of between 6.8% and 13.4% as a share of payroll. Even most large firms will see costs fall, by an average of between 0.6% and 5% of payroll.

At the moment, about 2.7 million of California’s residents, or about 8% of the population, have no health insurance. Another 12 million residents, or about 33% of the population, are underinsured. A large proportion of the remaining 60% of the population who are adequately insured still face high costs, as well as anxiety over President Trump’s proposal to repeal and replace Obamacare.

Healthy California is capable of generating substantial savings for families at most income levels and businesses of most sizes. These savings are in addition to the benefits that the residents of California will gain through universal access to healthcare.

(Robert Pollin is a distinguished professor of economics at the University of Massachusetts, Amherst, and a coauthor of “Economic Analysis of the Healthy California Single-Payer Health Care Proposal.”)

(I quoted the entire text incase it is somehow no longer available some day. The Wall Street Journal isn't required to show its Google hits for free anymore, and they now require a subscription to see any text.)

(There were 4 hyper links in the first three paragraphs)





Now, what about that?

A plan that would cost about 13% (lower) of the California GDP?

Most funding come from the feds anyway.

The cost controlled plan would require an income tax increase of 9% (again - if NO OTHER TAXES are raised among the myriad of other taxes in California), which would save businesses money and especially individuals.

California is going to enter an economic golden age soon.

Out with Jerry Brown and in with the supportive Lt Governor who is running for governor (I hope) in 2018.

EDIT: I now think the cost would be lower than a flat 9% income tax as I think about the numbers. Been awhile since I had my actual issue of the paper, plus all the commentary in other big papers. Maybe more like 7%? (I hate many of the cost controls anyway, so whatever happens, I hope a national single payer bill lacks the controls)

Edited by LamarkNewAge, : No reason given.

Posts: 1903
From: Denver,Colorado USA
Joined: 12-03-2004
Member Rating: 1.8

Message 2 of 2 (822477)
10-25-2017 5:49 PM

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