Why doesn't liberal California just implement Universal Healthcare on its own?

Question

California has an overwhelming left-leaning majority that probably loves the idea of universal healthcare. But even if you don't want to take the whole of California (which still has a large conservative presence in its rural areas), you could focus on select counties or cities like SF, which are undeniably overwhelmingly progressive.

Why don't they implement Universal Healthcare on their own (since getting the entire nation to go with it seems impossible). They have a progressive supermajority that I'd imagine wants it, as well as an absurdly high GDP to support it. So what's stopping them from doing it? And conversely, it seems to me that if even California won't go for it, then the mere hope that the entire nation would go for it seems absurd.

The only explanations I can think of is that I incorrectly assumed liberal Californians overwhelmingly want Universal Healthcare, or that those running California are in the pocket of insurance companies and special interests (and so refuse to make it happen). Or maybe I'm just underestimating the practicality of a single state/district having Universal Healthcare on its own?

Answer 1

Because there is a strong possibility that anyone who ever had a health risk would migrate to California and bankrupt the system. Meanwhile, given the extra taxes needed to pay for it, anyone feeling healthy would move out.

The reason even Obamacare doesn't work very well is because countries that have successfully implemented universal health care have taken away the rights of individuals to opt out. Most of us, in countries running those programs, understand that we get less out of the system than we put in. Until we need it (which, btw, is precisely the very notion of an insurance model).

Meanwhile, a side gain is also to limit the massive paperwork needed to manage enrollment ("ugh, keep the sicks out!") and claims in the US. In the California hypothesis, that paperwork would be replaced by lawsuits and/or administrative challenges whenever California tried to ration care for recent arrivals.

It's simple economics - and common sense - that make universal health care work * (though not necessarily in poor or corrupt countries). Not politics. That's why even right wing studs like Boris Johnson or Orban still run these programs.

* within limits: ageing populations stress these programs, massively. But, in the US, thanks to gray power, Medicare still stresses taxpayers. To the tune of $829B in 2021.

p.s. Simple economics is based on the US spending more per capita than other countries. For comparatively bad outcomes. I would expect tax-watchful, but politically neutral, individuals to be able to work through the implications of this math.

Rest fully assured: any health care providers that are part of that gravy train can be expected to strenuously object to rationalization that would bring costs in line with the USA's peers and near-peers.

p.p.s. No, provincial/regional management of plans in some countries doesn't change the fact that the availability of health care is present nationally and the funding often carries a sizable central component.

Update, from comments: There was no federal medical system when Tommy Douglas introduced the Saskatchewan Hospitalization Act in 1947. This was not a universal system, but I think it was close enough to counteract the "people would just move there for medical care" argument.. Possibly, but I would still worry, a lot, if I were doing this in 2024, in California, at current healthcare costs and procedures, much higher population mobility, with the current CA deficit and with an aging population.

p.p.p.s. "But the poor get covered through Medicaid!" misses the point that its coverage can be sub-par when compared to the more egalitarian European or Canadian universal plans. And tying coverage to employers can be economically bad both by keeping workers in suboptimal jobs and the financial burden to employers.

All these undesirable characteristics remain with a California homebrew. Which, as another answer points out, would only be improving things for 6.5% of hitherto-uncovered people, at very significant costs, making rejection whenever such bills are proposed unsurprising.

Let's finish up with why this bill failed the last time it was presented:

(Feb 2022) California Democrats Kill CalCare, a Single-Payer Health Care Proposal | The New Republic

CalCare was murdered like Caesar: betrayed by its ostensible allies, all of whom participated so that none of them could be fully blamed.

Why the betrayal? Because the bill was a nonstarter for California’s most powerful business groups. The California Chamber of Commerce led a coalition of 122 business groups in opposition to the bill. Opposition was the most vehement from the groups representing Big Health Care

This is the pro-bill side, complaining. Is it incompatible with the analysis above? Not really: the current providers would have much to lose if moving to a less wasteful model, comparable with other countries.

And their own link pointing to those dastardly Brutuses:

(Jan 2022) Calif. Chamber of Commerce Announces 122-Member Coalition Opposed to Single Payer Health Care Proposals

In their letter, the coalition points out that similar past proposals have been estimated to cost more than $400 billion annually, which is a financial commitment four times that of Medi-Cal. "Successfully standing up a new function that would be twice the size of the existing state budget is highly doubtful, given the state's recent experience with benefit delays and massive fraud in the unemployment system," the letter states.

More recently...

(Jan 2024 this time) California single-payer healthcare faces doubts from Democratic leader - Los Angeles Times

A legislative analysis of that bill (note: the 2022 version) pegged the cost between $314 billion and $391 billion in state and federal funds — a sum that is larger than the entire state budget Gov. Gavin Newsom proposed for the 2024-25 fiscal year: $291.5 billion.

The proposals usually wind up dividing Democrats and withering due to concerns over cost, opposition from private insurers and the complex bureaucracy that undergirds the nation’s delivery of healthcare.

And since numbers matter with budgets, let's work through this math.

• 314$B cost, lower estimate
• 39M pop * 0.065 : currently wo coverage
• $123k / person => how much it would cost to implement this plan

in the interest of transparency: how is that estimate costed? Per year? For the first 5 or 10 years (as sometimes done with budget projections)? Permanently, with an endowment fund to pay for it? 123k/yr/person seems absurdly high. None of articles I saw were all that clear.

Answer 2

First point, 'Liberal California' is more of a Rightist meme than a practical reality. Yes, California has distinct and vocal left-leaning groups; Yes, California is a strongly Democrat state; Yes, California has a lot of movie stars who tend to be liberal and outspoken. But the movie industry itself is Big Money and anything but liberal, agriculture and the military are two of its largest industries, and Silicon Valley is all about adventure capitalism. California produced (and elected) Ronald Reagan, Devin Nunes, and Clint Eastwood, and our current Governor (often tarred with the Liberal brush) is really an oligarchical centrist. California is considered 'liberal' because it's a rich state that's willing to spend its money on citizens, and unwilling to pander to theocrats and oppressive xenophobes. Best not to exaggerate its 'lefty-ness'…

Second, Universal Health Care needs to be handled on the federal level. Trying to implement it on the state level would produce a host of problems involving legislation of trans-state industries like insurance companies and major medical providers, e.g.:

• federal interstate commerce lawsuits
• loss of services and revenue as industries pull out of the state
• a largish increase in state taxes
• a deterioration of already already impacted housing markets (not to mention homelessness) as under-insured people from other states move to California for medical care

Californians respect the ideal that California should lead the country by passing universal health care, I suppose, but despite appearances California is not all that idealistic a state. Remember, it was not the first state to allow gay marriage or to legalize marijuana. We shouldn't reasonably expect it to take the lead here, either.

Answer 3

Medicaid and Medicare already cover the most vulnerable groups

Back in 1965 when Medicaid and Medicare were first introduced, one could make a compelling argument for how the government needs to support the elderly and the poor. As of 2024 this argument doesn't work as well, since those two groups are already covered.

Only 6.5% of California residents are uninsured

As per the America's Health Rating website, only 6.5% of California residents don't have insurance. Most people either have a corporate healthcare plan, are retired and have Medicare or are poor and have Medicaid. Therefore 93.5% of California voters have little incentive to vote for a Universal Healthcare plan. And they're unlikely to be overly sympathetic towards a person who makes (say) $100k/year but chooses to not buy an insurance plan. Some of those not covered are foreign nationals who usually get even less sympathy from voters when it comes to use of public funds.

Most Americans like their insurance

From Forbes:

A 2022 Forbes Advisor survey found that 85% of Americans said they are at least somewhat happy with their health insurance plans

I don't have the stats for California specifically but I imagine they should be similar.

Well off Americans would be worse off with Universal Healthcare

If you have a good job with a solid insurance plan and live in a major city, you've got incredible access to medical services of any kind. Low wait times, doctors who smile and listen (you're a customer, so they have to!), large choice of providers, low out-of-pocket costs. Most of these perks will go away if Universal Healthcare is implemented, so there's a strong incentive to vote against it.

So... who's going to vote for this plan? The 6.5% who don't have insurance for whatever reason? That's 43.5% too little, so this won't happen any time soon.

Answer 4

California could adopt a universal health care system.

It would need some cooperation with the federal government to do it, because every U.S. state has many people who get their healthcare through the federal Medicare program and Veteran's Administration health care system, because California has contractual obligations related to its participation in the joint state-federal Medicaid program and several smaller federal health care programs, because it would have to figure out how its Obamacare non-employer health insurance marketplace would be dealt with, and because it would have to do so in a manner that is sensitive to the federal tax code which includes Obamacare tax credits (and Obamacare investment taxes) and various exclusions from income.

Still, these are not insurmountable barriers. Every state has its own state level worker's compensation program with is (in part) a form of universal healthcare system for work related injuries and illnesses. A number of states have "no fault" car insurance which is effectively a universal health care program for minor injuries from car accidents. Every state has a system of health care for its prison and jail inmates. Colorado has a mandatory, payroll tax financed paid sick leave program. Every state has some state and/or local government owned hospitals.

The Obamacare system in place at the federal level is basically a reworking of a Massachusetts state government health care program.

The main reason that this hasn't happened is that the bureaucratic effort it would take to do so would be epic, and it would probably require some level of federal government cooperation, which would be hard to secure at a time when the federal government is gridlocked by a partisan divide between Republicans who control the House of Representatives, Democrats who narrowly control the Senate (but not a filibuster proof level of control) and a Democratic President.

Other countries have universal health care systems primarily set up at a sub-national level, and California could do so too.

Answer 5

California lawmakers have once again introduced a universal health care bill after unsuccessful attempts in the past.

The bill’s latest iteration, formally known as AB 2200, would establish the framework for a single-payer, state-run coverage system called CalCare to control health care costs for all Californians. California to become first state to offer health insurance to all undocumented adults

“The bill, among other things, would provide that CalCare cover a wide range of medical benefits and other services and would incorporate the health care benefits and standards of other existing federal and state provisions, including the federal Children’s Health Insurance Program, Medi-Cal, ancillary health care or social services covered by regional centers for persons with developmental disabilities, Knox-Keene, and the federal Medicare,” according to the bill’s text.

While the idea seems good on paper, in the past, previous versions of the bill have faced pushback mainly due to its expensive price tag. Legislative analysts have previously estimated it could cost between $494 billion and $552 billion to fund the program.

The high price tag was one reason a similar CalCare bill couldn’t garner enough support to pass in 2022

https://ktla.com/news/california/california-lawmakers-once-again-introduce-universal-healthcare-bill/

Apparently, several bills were passed, but they were rejected, because of the eye-watering cost that it would entail. It was estimated that it would cost between $494 and $552 billion to fund the program, and since it would be the state that would have to fund it, the Federal government, which control the printing press won't help fund it, meaning that the state would have to issue bonds at a high interest rate.

Answer 6

What Is It?

How can we say why CA doesn't have "Universal Health Care" if we don't even know what it is? Does this mean single-payer? Private insurance is forbidden? Or it is allowed, but only as a supplement to the UHC? Does it allow balance billing? Does it have pre-authorization? Are there benefit limits? Everyone has a different idea of what UHC is or isn't, which is the biggest obstacle.

Senator Sanders has a simple idea: Medicare for All. Just extend Medicare to the entire US population. That at least makes the definition simple, even if the implementation is still gargantuan. Of course, CA cannot implement Medicare for All because it's a federal program.

A lot of people think that UHC should mean the end of medical bankruptcy in the US. But if balance billing is allowed, then that would not be the case. They think UHC should mean all essential care is covered. But if prior authorization is allowed, citizens would surely get rejected for some procedures, and forced to deal with the private markets. So the first problem is, someone has to define what UHC is and is not. They need a detailed plan. And so far, nobody has put forward a detailed plan for people to even debate or consider, because it's a political football with a high cost of failure.

Lobbying

The biggest cost is not paying for the plan. We already know it is possible to provide high-quality care for fewer dollars than Americans spend today. We already pay more than 2x for the same care in other OECD countries. The biggest cost is dealing with the entrenched stakeholders that will push back on any plan with every resource they can muster, because they will be the biggest losers. Obviously, that includes insurance companies. But it also includes employers, who now enjoy the leverage that comes with holding health insurance policies over employees' heads. And hospital systems, that would surely see lower reimbursement rates (after all, isn't lowering costs one of the major selling points of a UHC???). Even doctors and nurses, who will not come out personally to denounce it, will certainly enlist whatever proxies they can to fight for the status quo, whether that means lobbying from the American Medical Association & friends or siding with insurance and hospital lobbyists. Anyone trying to promote UHC is declaring war on all of these entrenched interests. Clearly, no politician, in CA or elsewhere, feels up to this challenge. Bernie can speak of it openly because he is just one man, tilting at windmills, and everyone knows he is not a serious threat. As soon as a credible threat materializes, that is when the knives will come out and blood will run in the streets.

ObamaCare is far, far short of UHC, but look at how much resistance it faced, not all of it from Republicans. ObamaCare is clearly the most that America as a whole will tolerate when it comes to medical reform, and many pieces in the original proposal were gutted so something could see the light of day (like the single payer option).

America has the greatest health care system in the world...if you're a capitalist. It doesn't matter what the outcomes are, in relative or absolute terms. It generates the most revenue and profit per capita of any health care system, bar none. It stands in a class of its own. And that means that everyone benefiting from this golden goose is highly incentivized to expend a lot of resources to maintain the status quo. California may have a lot of liberals, but perhaps you didn't notice...it has an awful lot of wealthy capitalists, too.

Answer 7

Because they have no money.

I explain. If the country is rich, it does not mean that they can allocate the money and universal healthcare would mean, that more people is going to visit the hospitals as today.

If there is not enough medic, it does not matter, how much do you pay them. By investing more money, making their lifepath more attractive, you increase the chance that smart people choose to become one of them, instead of choosing, for example, a legal or IT career path. On this way you can increase their number - 20 years later. You have no way to make more medic now.

If a poor man visits a hospital with a broken leg or with pneumonia, someone has to handle him and this whole thing has a price. Someone must pay it. You can let the health insurance pay it, but someone has to pay the health insurance. You can let the state pay it, but then you need to collect more taxes or withdraw the money from other sources.

Ultimately, someone has to pay the the invoices. What the state can do, is to let pay others. The state can not create the goods, it only can redistribute them... we create the goods, you and me, and being in the IT does not surely mean that any of us would have a health insurance, even if we are obliged to have it by law.

Ultimately it is a political decision. You could ask a chessmaster, why he did not capture the queen as it had seemed a good move.