Three Key Principles That Should Guide Efforts to Create a Single-Payer Health Care System in California

Senate Bill 562 (Lara and Atkins), which would establish a single-payer health care system with universal coverage in California, was approved by the state Senate in early June, but stalled in the Assembly. Although SB 562 will not move forward in 2017, a single-payer proposal could be revived in 2018. This post is the second in a series examining key issues related to the single-payer approach and, more generally, to efforts to move toward universal health care coverage in California. The first post in this series examined whether state policymakers could implement a single-payer system without seeking voter approval.


It’s a well-known fact that there are multiple paths to universal health care coverage. The experience of high-income countries shows that universal coverage can be achieved through both single-payer and multi-payer systems, as we point out in a recent presentation. However, because of the tireless advocacy around SB 562, Democrats’ growing interest in single-payer at the national level, and the possibility that a single-payer proposal could end up on the statewide ballot in California, single-payer is likely to continue attracting the lion’s share of attention in the Golden State. So it’s critical that state policymakers and the public take a clear-eyed view of the single-payer approach, considering not only its potential benefits but also the challenges it would face with regard to financing, implementation, and various provisions in the state Constitution. In our view, any effort to create a single-payer system should adhere to three key guiding principles.

Create a Comprehensive Transition Plan and a Realistic Financing Plan Before State Lawmakers or the Voters Are Asked to Approve a Single-Payer Proposal

A key goal of this planning process would be to help ensure a relatively smooth and successful transition to a single-payer system, should policymakers and/or the voters decide to move the state in this direction. In developing such plans, single-payer advocates would need to contend with — and provide credible answers to — a number of challenging questions, including those we outline in a new Fact Sheet.

Assume the Gradual Phase-In of a Single-Payer System

Even under the best of circumstances, shifting the state’s health care system to a single-payer model would be a highly complex undertaking, requiring fundamental changes to how health care is provided and funded. While single-payer advocates and analyses often imply that such a complex transformation could be achieved virtually overnight, the reality is that a single-payer system could not be implemented with the flip of a switch. Instead, a careful and gradual phase-in would be necessary in order to address the many uncertainties associated with such a transition and ensure a successful implementation.

Is there a real-world example of a similar phased-in policy implementation in California? Yes, there is: California’s new Secure Choice Retirement Savings Program. Secure Choice is a voluntary retirement savings plan for the more than 7 million private-sector workers in California who lack access to such a plan on the job.  Following years of development, the Secure Choice legislation was signed into law in 2016, and its implementation has been gradual and systematic. The program is being phased in over several years and may not reach all eligible workers until around 2022. This methodical timeline should help to ensure an effective roll-out of this new and important retirement security option for California workers.

Let the Voters Weigh In

In California, the inherent difficulties of implementing a single-payer system are magnified by the complex rules that voters have added to the state Constitution — rules that restrict state policymakers’ ability to increase revenues and expenditures as well as to prioritize how new revenues should be spent. As we explained in a prior blog post, California’s Constitution contains two fundamental constraints: the state spending limit known as the Gann Limit and the Proposition 98 minimum funding guarantee for K-14 education.

Proponents of SB 562 contend that these constitutional obstacles could be overcome solely through the legislative process without consulting the voters. This is a dubious assertion. Moreover, implementing such an approach would likely create an extremely shaky legal foundation for a new single-payer system. Rather than trying to devise a clever — and likely counterproductive — way to avoid going to the ballot, single-payer advocates would be well-advised to ask California voters to remove these key constitutional obstacles. At the same time, voters could be asked to approve other key components of a single-payer proposal, such as the substantial tax increases that would be needed to finance the new system.

Conclusion

Implementing the single-payer approach in California would be an extremely challenging endeavor. Adhering to the principles advanced above would help to ensure that a single-payer system at least has a fighting chance of starting off on the right foot, should Californians decide to shift away from the state’s current multi-payer health care system.

— Scott Graves