- Last week, the proposal to create a single-payer system in California – called AB-1400 – was approved by a committee of the state assembly.
- California had previously considered establishing a single-payer healthcare system in 2017, but the bill was quickly defeated.
- Single-payer systems are common in other similar countries like the UK, but have not been adopted in the US.
California is seeking to introduce a publicly funded single-payer healthcare system to provide quality healthcare and long-term care to its residents.
A state assembly committee last week approved the proposal to create the AB-1400 system.
The bill is now heading to the California State Assembly, where it will be voted on by Jan. 31.
California had previously considered establishing a single-payer healthcare system in 2017, but the bill was quickly defeated due to outstanding hurdles, such as how the system would be funded.
Although single-payer systems, such as AB-1400, have been repeatedly proposed at the state and federal levels in the United States, none have ever been fully adopted.
Medical professionals say the likelihood of success with AB-1400 is unclear.
Several industry groups oppose the bill, but health officials could address their concerns by coordinating with hospitals and medical professionals to establish a fair and equitable health care system.
“Californians face a series of trade-offs here: higher taxes in exchange for lower point-of-care costs, system efficiency in exchange for less choice in how your healthcare bills are paid, and potential improvements in predictable and equitable access to health care in return for consistency of what is covered and what is not,” said Brigham Walker, assistant research professor in the Department of health policy and management at the Tulane School of Public Health and Tropical Medicine in New Orleans.
According to Dylan Roby, PhD, associate professor of health, society, and behavior in the public health program at the University of California, Irvine, the system would be built on a fee-for-service model, similar to Medicare.
Advocates have argued that the COVID-19 pandemic has brought to light gaps in care and disparities based on race, ethnicity, income and location.
A single-payer system would eliminate costly premiums, co-payments and deductibles, helping to close the gaps and expand access to care for all.
Roby, who has co-authored several reviews exploring costs and potential problems with AB-1400, says several issues would need to be addressed for the system to succeed.
Private state providers could continue to operate but would charge fees so providers receive standardized payment rates.
“A number of issues should be addressed given the integrated health care providers — like Kaiser Permanente Medical Group and Kaiser Foundation hospitals — which make up a large portion of health care providers in California,” said Roby said.
A program like AB-1400 could also have negative impacts on healthcare workers.
For example, if payments for provider services are in line with Medicare rates, hospitals and doctors — who typically charge more than Medicare rates — could potentially see their rates go down.
“The rate-setting commission should balance these concerns to ensure efficiency and fairness,” Roby said.
“AB 1400 would not change all day 1. There is a deliberative stakeholder process that would be needed to determine how much providers would be paid, how to fund certain parts of them, how to navigate federal waivers for Medicare and Medicaid, etc. added Roby.
CalMatters reported that a legislative analysis estimated the single-payer system would cost between $314 billion and $391 billion a year.
Roby says the system would likely be partially funded by tax increases.
The amount of funding required would depend on the benefits included in the single-payer system as well as payments made to providers, according to Roby.
“If payment to providers is based on lower health insurance rates, the program might be quite affordable,” Roby said.
Proponents of the single-payer system argued that the system would not cost more or require large tax increases because it would essentially realign the health insurance premiums currently paid by individuals and employers.
In general, single-payer health systems are considered less costly than privatized multi-actor health systems.
“California providers bring in more than $1 billion a year in uncompensated care costs, and many patients face unnecessarily high bills due to limited provider networks, so the increased predictability of a system single-payer can reduce cost exposures for providers and patients,” Walker said. .
California has proposed a bill that would establish a single-payer healthcare system to provide high-quality care and long-term care to all California residents.
Although several single-payer systems have already been proposed at the state and federal levels, none have been implemented. The system would follow a fee-for-service model, similar to Medicare.
It is not known how likely the bill is to pass. Still, health system professionals say there are several issues and cost considerations that need to be addressed before this system can be established.