Debate on Single-Payer Health Care Heats Up in Legislature
The Senate Health Committee on Wednesday approved a bill (SB 840) by Sen. Sheila Kuehl (D-Los Angeles) to abolish private insurance in California and create a single-payer, state-run health care system, as well as a measure (SB 1014) to fund such a system, the Ventura County Star reports. The Legislature approved SB 840 last year, but Gov. Arnold Schwarzenegger (R) vetoed it.
In a point of distinction from last year's debate, Kuehl this year is pushing legislation to fund the single-payer system through a new payroll tax that would apply to employers, as well as workers. Last year's effort did not include legislation to pay for the program.
Lenny Goldberg of the California Tax Reform Association said the system could be funded through a payroll tax of about 12% of wages, with employers contributing 8% and workers contributing 4%.
The financing measure also would increase the state personal income tax on residents whose annual incomes exceed $200,000 and impose a new tax on interest, dividends and other nonwage earnings.
Kuehl's bill does not specify tax rates.
SB 840 now moves to the Senate Appropriations Committee, and the financing bill goes to the Senate Revenue and Taxation Committee for consideration.
In making her case for the legislation, Kuehl argued that adopting a single-payer system is the only way to address growing problems with the health care system. Kuehl cited a study that found that a single-payer health care system would reduce California's overall health care spending by about $17 billion by cutting out profit and administrative costs associated with private insurers.
Insurance industry officials dispute the savings, saying that the study overestimated insurers' profit and administrative costs.
The California Chamber of Commerce also is lined up against the bill, maintaining that it prescribes too radical a change from the current system (Herdt, Ventura County Star, 4/19).