At a time of inflation, California should take a bold step to tame rising health care costs
The single-payer advocacy coalition Healthy California Now and the National Health Care Workers Union recently developed a family health care cost calculator for use by individuals and families living in California. It is designed to compare the costs associated with a single-payer program to actual health care costs.
So far, 4,000 families have tried it. Users enter their premium payments for the previous year, employer premium contributions, out-of-pocket expenses and annual income. The calculator then compares their costs under the current system with the projected taxes for a single payer at their income level.
Eighty-seven percent of those who used the calculator found average annual savings of more than $6,000 per household. Medicare beneficiaries were more likely to achieve net savings at a slightly lower average of $5,150 per household. The 13% of households that would not enjoy net savings generally had very low current premium and out-of-pocket costs due to extremely generous health plans or annual incomes exceeding $350,000.
Take five minutes and try this exercise for yourself on the Healthy California Now website.
The results are consistent with economic studies of single-payer health care systems. Most people save with single payer for two reasons. First, single payer lowers total costs by improving coverage by drastically reducing claims and paperwork costs. Second, a single-payer insurance program is financed by a tax plan where everyone contributes, so the burden increases with higher incomes and on corporations who pay their share.
While the divided government in Washington, DC, won’t stop single payer from taking the national stage anytime soon, California is a different story. Our leaders in Sacramento already have the initial steps out of the way, and they have the power to make the single-payer state a reality.
The Healthy California Commission for All, formed by Gov. Gavin Newsom and the Legislature last year, laid out a “unified funding” plan that provides universal coverage and comprehensive benefits for all. Under this plan, out-of-pocket costs and cost-sharing will be eliminated. Instead of payments to private insurers, funding would come from a progressive tax that could easily generate the necessary funds.
The tax plan used in the calculator includes a 2% sales tax on non-essential items plus a payroll tax that starts at incomes of at least $75,000 and a personal income tax that starts at $300,000 a year. Additional taxes will be levied on the state’s wealthiest individuals and corporate profits.
It’s true that some well-paid professionals would be at risk of paying more for single-payer coverage, and the super-wealthy would have to share some of the burden. But in return, all Californians would get a system that guarantees excellent coverage, including long-term care, and a health plan that efficiently and equitably covers health care costs for everyone.
We can fight health care inflation by providing quality care for all, and California can lead the way. The words on everyone’s lips this year should be “Medicare for all.”
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