Universal health plan would save Californians $37 billion annually, study says

[Rollo]

Source: San Jose Mercury News

SACRAMENTO — As the California Senate considers voting this week on a proposal to replace private health insurance with a statewide health plan that covers everyone, the bill’s main backers on Wednesday heralded a new study that says the plan could save Californians $37.5 billion annually in health care spending — even after adding the state’s nearly 3 million uninsured.

The favorable findings by economists at the University of Massachusetts, Amherst, comes a week after a Senate committee released eye-popping estimates that threatened to dampen enthusiasm for the bill. The committee’s analysis projected that the statewide plan would cost $400 billion annually, half of which would likely need to come from workers and businesses through a 15 percent payroll tax.

If the state adopts a single-payer plan, “Californians will get more and will definitely pay less,” Sen. Ricardo Lara, D-Bell Gardens, the co-author of Senate Bill 562, said at a news conference Wednesday.

But a statewide poll released Wednesday night could foreshadow the political challenges ahead for enacting a single-payer system — which would inevitably be funded through new taxes. The first-ever question to Californians on the topic by the Public Policy Institute of California shows that the vast majority of state residents were in favor of a universal, government-run health care system — as long as it doesn’t raise their taxes.

Read more: http://www.mercurynews.com/2017/05/31/universal-health-plan-would-save-californians-37-billion-and-cover-more-people-study-finds/

[nycbos]

1. Would private health insurance than work as a supplement like it does in many European countries.

I studied aboard in France.


When I was there you pay 200 euros for the national healthcare (Social Security) and it covers most health cost but not all. I was told that 80% of French citizens have supplemental insurance to cover the difference.

[Rollo]

2. Good question

The linked article does not discuss supplemental private insurance.

However I doubt there would be a ban on private insurance for those who want it. I believe in the UK you can still get private insurance if you don't want to use the NHS.

[nycbos]

5. It is an important thing to discuss.

When someone says the favor universal single payer healthcare they need to be more specific. Pretty much every country's system is stlightly different.

[mwooldri]

17. UK: Private is for routine, elective, acute and planned care.

Private is to skip the waiting time for some NHS procedures. To have nicer facilities. And in some cases get care for things the NHS doesn't cover.

You're having a heart attack? Oh dear... you're going NHS until you're stable enough to be transferred to the private hospital. Critical condition at the private hospital? Quick, call an ambulance, we don't have the facilities so they've gotta go to A&E... no such thing as a private A&E department. Private health won't cover life critical emergencies.

Bupa is the big 800lb gorilla in the UK health insurance market.

[rurallib]

8. Even if there was a need for a supplemental, the cost would probably

be far less than current insurance.

I would bet that taxes + supplemental would be far less for most people than current insurance. Add in the co-pays and deductibles and I bet potential yearly outlay is far less.

Repubs will pull out the higher tax bugaboo out of closet and shake it around. Advocates must make sure people understand the whole cost difference.
There will also be the old "government coming between you and your doctor" crap. I would much rather have good government involved than some guy trying to make a profit off my health.

[stopbush]

3. That 15% increase in payroll taxes to pay for universal health care

is right on target. It's less than it would have been to enact the plan Sanders put forth during the primaries (even though the true cost was not played up by his campaign), but it should do the trick.

Now, the supporters of the bill need to talk openly and often about the OFFSET to that 15% increase that will come in the form of no more premiums, co-pays etc. that come with a universal plan. And, they need to have a truthful and compelling answer for the many who would be paying more than they are today for a form of healthcare delivery that has been demonized for decades.

Fingers crossed.

[Rollo]

6. Not 15%...

The study cited in the OP proposes less than 3% payroll tax and less than 3% sales tax to cover the costs of universal California healthcare.

Moi, I figure the sales tax is too regressive and it should all be from payroll taxes, perhaps less han 6%.

[haele]

13. I don't like sales taxes for revenue, but a lot of Californians get their income "under the table".

If you're going to make it universal, you have to pay for it universally.

So a half and half sales tax/income tax - or better yet, add a .5% or 1/2 cent per dollar targeted service transaction fees on property insurance, investments, specialty or risk transactions (i.e., entertainment events and weapons sales - firearms, bows, tazers/pepper spray, large knives/martial arts weaponry - I can hear the 2nd Amendment screaming now!) and business property transactions to keep the tax from being too onerous to either the consumer or the worker, and you might have something most people can agree on.
If you add fees to the taxes, you can drop that 3% addition Sales and Income tax down to perhaps 2 - much more palatable.

Roll 1/3 state Worker's Comp payments from employers into it, and you could pay for Universal Health Care from multiple sources and provide a buffer for it during lean times or recessions.

The trick with universal - or Single Payer - is to spread the cost about so no one type of payer is unfairly burdened.

Haele

[Rollo]

15. Got any stats to support the claim that "a lot of Californians get their income under the table?

I doubt it. I suspect it's a very small figure. And, besides if they are flying under the radar, they might also have a tough time getting treatment if they can't show how they get by day to day.

Perhaps there are homeless who don't report their incomes. LOL, they'd qualify for free healthcare anyway, under Medicaid.

Basic message is that sales taxes are regressive, and California already has a very high sales tax (10% when combined with local sales taxes in many counties).

Surcharges on property taxes and such? You'll hear a chorus of yells from seniors on SS. But they are on Medicare anyway, so why double dip them?

[haele]

21. Your comments are not really directed to what I posted.

We're discussing Universal Medical Coverage that everyone is going to access, not just some form of Medi-Cal that is means tested, or even a Single Payer sort of coverage.
So yes, every household and business, whether they work or not, needs to contribute at least a little.

BTW, in other countries, a mix of VAT and Income Taxes pay for theirs at a much higher rate that what is being discussed for here in California. The 15% Income Tax in a post above is closer to what they pay in Canada than the 3% in the estimate for California. And there's not a lot of tax credit for the lower income taxpayers that takes the bite out of their universal coverage costs. Sure, they don't pay as much when they use it, and tax is much less than the average U.S. premiums based on whatever an Insurance Company decides is the proper market risk level, but it's still quite a bit out of the take-home pay of everyone, plus the VAT - all for the benefit of not having to worry about health costs that will be incurred one way or another throughout everyone's life.

As to your complaints -
1) I do know a lot of people who get paid under the table here in Southern California - some do pretty well. Most of the ones I know are native born Californians, BTW - not immigrants. Family members of petty "real estate apartment tycoons (aka "slum lords&quot and small business people - especially in mechanics and light construction/handyman type of jobs. There's no real statistics because that's not something people admit to; it's Income Tax fraud, after all...
I can tick off at least 25 people just off the top of my head, and if I poked around, could find a lot more. A lot of regular help who sometimes manage to take in an extra $100 - $300 on a weekly basis in both seasonal and regular work; you know - the "friend of a friend", "I know a guy" type of work.
Probably around 5% here where I live do some form of under the table or friend of a friend work on the weekends and after hours; about 3/4th of them hold down one regular lower wage job just so they have a tax record for their credit checks and at least some form of medical benefit and other social benefits; the other quarter are stay-at-home caretakers or other people who have problems managing either a job or the attendant responsibility, background checks, or paperwork associated with maintaining a real job for any length of time.
How do you think a lot of ex-cons are able to maintain a standard of living when most businesses won't hire felons and their probation programs aren't there to find them work with the ones who get money to hire on probation felons anymore?

2) To clarify - my "Surcharges on property taxes" was specifically directed the Business Property transactions that are currently cheating the state out of money due to Prop 13.

Like my "Pretend we're from La Jolla" Tea-party in-laws, who made themselves an LLC and own around 30 crackerbox 1980's condos throughout the county they rent out at far above market value that they scooped up during the S&L crisis, yet are still paying the much lower residence specific property taxes than the potter I know who owns a run-down three-store storefront and leases two of the spaces out to other local small businesses.
BTW, they (on edit - the in-laws, not the potter) have three people that I know of working for them under the table; one was recently injured while working at one of their properties, and has to come up with the money to pay his own ER bill, because they don't pay Worker's Comp, being an LLC that has "no employees". LLCs get a lot of tax breaks that S-Corps or private business owners that carry liability don't.
Having them pay a bit more in any of their business property transactions as they're winding down the business and selling off during the current bubble is not the same as making Grandma pay a surcharge on her current property taxes, or adding an extra 1% on a Mello-Roos property.

The point is that just targeting Income taxes is just as unfair as creating a VAT to pay for Universal health coverage.

The point is also that because there are other Federal and State health programs that take money to provide Medicare, Tricare, VA, BIA Tribal Health Care, Worker's Compensation Health, Community Health initiatives, Medical Rehabilitation programs, etc.; these programs that the taxpayers of California also already pay directly into...it's critical so that we don't "double dip" the citizens that depend on those programs, that the cost of a State-run Universal Health Care system needs to be spread about more equitably across everyone in the state, not just the 70% or so who pay SSI and FICA on their Income Tax, and the 65% of employers who pay their portion of SSI, FICA and Worker's Comp insurance.

So, again lower the proposed VAT and Income Tax from 3% to 2%; offset that decrease with a small service fee on a) Business Property Transactions, b) investment transactions, c) entertainment events and weapons sales, and transfer the management of the Worker's Compensation Insurance fund to cover a Universal Health coverage for everyone in California. Worker's Comp in California should use the Universal Health program as a Single Payer entity to handle all medical claims; whatever the estimated cost of the medical benefits payout is in that program should go directly to the State Universal Health Care system, instead of being doled out by the insurance companies after getting their cut off the top.

Or do you think Universal Health Care is free? I spent 20 years in the military, and am eligible for Tricare in two years. I know how much the DoD Health Care System costs the American Taxpayers...and setting up a State Universal Health Care system will be a hard sell if people are already paying for some sort of Federal Health system, no matter how much the current GOP vampires are hoping shift that money to their Corporate buddies.
Look at it this way - if we aren't careful about spreading the costs around between businesses and citizens, everyone will be "double dipped", not just the Seniors on SS.

Haele

[still_one]

27. Sales tax is a regressive tax. In my view just increase the SIT.

[taught_me_patience]

25. The 15% payroll tax pays for only half the estimated cost. n/t

[Bayard]

4. Very encouraging

Calif leading the way again. It would seem to me that the raise in taxes would be more than compensated by the reduction in healthcare costs. It has to be framed, and documented, in such a way across the country so people aren't just screaming again about Dems raising taxes.

[Crash2Parties]

7. Decades ago there was this really corny movie...

It started Lee Majors, the kid from My Bodyguard and...Burgess Meredith. Majors was an ex-race car driver living in an authoritarian dystopia; he and the kid decided to take his old race car out from hiding (it had been banned) and escape to California. California had walled itself off and was the liberal/progressive foil to the conservative remainder of the USA. Meredith was the last pilot sent to stop Majors & the kid...in a Korean era jet fighter (like a Sabre, IIR). Anyway, I was young then & didn't quite get why the writers would make California this walled off progressive utopia. I'd spent time in different states and they pretty much seemed the same to me in my somewhat protected little world.

I get it now.

[David__77]

10. I love living in California!

And I've got no problem with self-identified right-wingers leaving if they so desire.

[NCjack]

9. But, wouldn't that end the careers of some CEOs etc.? Can we afford that?

[Xolodno]

11. Privately...they probably want it.

Much like flood, earthquake (in California), risk pools, etc. They don't actually underwrite and take on the risk, but become administrator of the policy. They take a small fee for the costs and a bit of state regulated profit.

They probably could still sell in the market using their own doctors, hospitals, etc. For example, Kaiser Permanente. The costs would probably be on top of the taxes, but if you wanted faster service, provide additional non-essential coverage (i.e. plastic surgery, etc.) or an employer wanted to add an additional benefit, etc. They would still be in business, albeit, in a more specialized way and not mandated.

[Rollo]

24. Kaiser Permanente has long been touted as a model for single payer health care...

Dating back to Hillary's aborted attempt to fix health care back in the 90's.

And Kaiser is actually two entities: the insurance part, which collects premiums and pays providers, and the providers or "Doctor Groups", which hire the docs and such and pay them from what the get from the insurance side. I think the insurance side also owns and runs the hospitals. I could easily see the Kaiser insurance arm being a subcontractor to the state, or getting turned into a state agency. It's not Cadillac care, but it's been good enough for yours truly for a number of years, and in some cases better than "private" providers charging a lot more.

[Hoyt]

28. I was a member for awhile. Liked it, but not much cheaper than other

insurers' plans.

[yurbud]

19. We could afford to throw some of them in jail for manslaughter

[LiberalLovinLug]

12. " as long as it doesnt raise their taxes."

TAXES TAXES TAXES!

The right wing news media in America has been very successful at demonizing the word to the point of absurdity.

To the point that some would rather pay more, through increasing private insurance payments, than pay a lesser increase in a "tax".

And even if it also means everyone is covered, and you don't have to worry about healthcare for the rest of your life and your children s lives.

[emmadoggy]

14. Yep! Same thoughts here.

Unbelievable stupidity.

[mwooldri]

16. Just don't call it a tax.

State Health insurance contribution. That's the new line most people would see on their paycheck. The line that's missing? Medical Insurance Deduction.

If we want to give choice, we could have variable contributions and price benefits accordingly.

California can do this.

[yurbud]

18. it's paying a lower premium to a different insurer

[Rollo]

20. Many state agencies and communities get around the tax issue by calling them "fees" ...

Like registration fees, mosquito abatement district fees, park maintenance fees, etc etc etc

It sucks because fees are not deductible on fed tax returns... and fees can be imposed without the usual 2/3 majority required...

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[stuffmatters]

22. The best revenue news here is that there will be a corp tx 0f 2.5% on gross receipts over 2 M

I'm for anything that benefits the citizens of our state and forces the tax cheat mega corps to pony up. You can expect a tsunami of ads against this corp tax from all these corps who freeload all of our state services without paying a dime of local or state taxes. Taxing them on automatic sales receipts in Ca over 2 M means they cannot (by being incorp'd in Nev or Ireland) escape starting to pay their share in Ca.

I love that this study was done by the Economics Dept at UMass Amherst. I'm an art historian, but if I were young again, I'd beline there to study economics. Just a few years ago a graduate Ph.D student there pretty much destroyed the foundational
Republican argument for Austerity Economics by discovering major data mistakes in the spreadsheets of the authors.

UMass Economics Dept rocks!

[taught_me_patience]

23. A 15% payroll tax would only cover half the cost? Hell no.

This is crazy.

[Rollo]

29. Try reading the article again...

The Senate analysis has been dated by the Amherst analysis. The Amherst analysis says the cost will be only $200 billion, not $400, so the 15% payroll tax would cover it. And there are other funding proposals that reduce the payroll tax to about 3.3%, albeit adding a 2-3% sales tax.

I think part of the problem here is that the Senate study didn't take into consideration savings achieved by eliminating the private insurance middlemen, as well as diverting the billions that businesses and employees spend for insurance in the current system. There are some controversial aspects to the Amherst analysis, such as savings garnered by negotiating with drug companies for the same prices the companies charge customers outside the USA. You can be sure Big Pharma will fight that tooth and nail, all the more reason to believe it's a good plan.
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[still_one]

26. Obviously those that said they favor a universal healthcare system as long as it doesn't

raise their taxes, had better pull their heads out of their assess, because they do not obviously understand how else would it get paid for?

The point being that the increase in taxes would be offset by the costs that people currently pay for premiums, deductibles, and other out of pocket expenses.

That is why I am somewhat skeptical of polls in this regard, because I suspect when these poll questions are asked, they don't explain the iintricacies involved, and their frame of reference is distorted because they are answering a poll without a full understanding.

As for me, I would gladly pay more taxes for single payer in California, even though I would not directly benefit from it.

[Voltaire2]

30. My guess is that the pollsters stuck that in there.

So one of the choices was "plus with free ponies" and people responded "sure, I like the free ponies option".