A California lawmaker has pulled down his own bill that would have created a single-payer healthcare system in the Golden State—even before a vote was scheduled. Even with the Democrats’ supermajority in the California capitol, he couldn’t round up the votes.
According to the Sacramento Bee, the bill by San Jose Assemblyman Ash Kalra “threatened the existence of private insurance companies and would have overhauled the healthcare system, prompting fierce push-back from many parts of the industry.”
In fact, the new system would have required California to more than double state taxes—at a time when the state is already bleeding residents who are seeking more opportunity and a lower cost of living. The yearly price tag, an estimated $356 billion, is far higher than the state’s budget of $263 billion for 2022.
California has repeatedly tried to go it alone with single-payer; voters in 1994 rejected a ballot initiative, while then-Gov. Arnold Schwarzenegger vetoed enabling legislation twice. And in 2017, a similar bill died in the Assembly.
California residents may not know how lucky they are; the media coverage has focused on the political wrangling instead of the real outcomes of a single-payer, government-run system: Universal coverage, sure, but a real and deadly decrease in access to care.
Proponents of single-payer healthcare (such as the California plan or Medicare-for-All) always promise patients affordable, accessible, and equitable care for all. But the iron economic law of scarcity means there are never enough resources to match demand. And as every other single-payer system shows, rationing is inevitable.
What’s notable about the California plan’s failure is that Democrats have a supermajority in the Assembly; if even they must admit the plan is unworkable, what does that mean for continued efforts at the national level?
The fundamental flaw of single-payer is that it increases demand (covering more people) while ignoring supply. Healthcare providers simply can’t afford to add more patients at the reimbursement rates the system can offer. That’s why we’re seeing rationing occur even now in Medicare and Medicaid, the closest things we have to the proposed California plan.
“According to the 2018 Physicians Foundation Survey, more than 1 in 5 physicians either limit the number of Medicare patients they see or refuse to see them at all,” the Heritage Foundation reports. “For Medicaid, the number is almost 1 in 3.”
Contrast this California catastrophe to the bipartisan reforms passed in Texas in the recent legislative session. The Healthy Families, Healthy Texas slate focused on improving Medicaid, making prescriptions more affordable for the uninsured, driving down the cost of services, and providing new options for the uninsured rather than increasing government control through Medicaid expansion.
And it worked; as former Louisiana Gov. Bobby Jindal pointed out in the Wall Street Journal, Texas “found ways to reduce the cost of prescription drugs and health plans, increase access to providers, and improve outcomes for women and children.”
California’s single-minded focus on single-payer coverage misses the point. American families aren’t clamoring for policies that mean little when they’re trying to schedule appointments; they want costs to come down. Nearly one-third of Americans say they’ve skipped needed care because of costs—in the last three months alone.
Reducing the cost of care is where California should focus its efforts. Like Texas, which has an opportunity double down on these successes in the 2023 legislative session, California could see a brighter, healthier, and more prosperous future.