Running Aground

Remember the state of California’s ambitious plan to create its own single-payer system? The Sacramento Bee reports that the plan has run aground on the shoals of reality:

Assembly Speaker Anthony Rendon put the brakes on a sweeping plan to overhaul the health care market in California Friday, calling the bill “woefully incomplete.”

Rendon announced plans to park the bill to create a government-run universal health care system in Assembly Rules Committee “until further notice” and give senators time to fill in holes that the bill does not currently address.

“Even senators who voted for Senate Bill 562 noted there are potentially fatal flaws in the bill, including the fact it does not address many serious issues, such as financing, delivery of care, cost controls, or the realities of needed action by the Trump administration and voters to make SB 562 a genuine piece of legislation,” Rendon said.

By that he means that under the terms of the Affordable Care Act California would require a waiver for its single-payer system.

Democratic Sens. Ricardo Lara and Toni Atkins, who introduced the proposal, acknowledged the bill was dead for the year. Lara and Atkins had described the bill as a work in progress when it passed the Senate earlier this month without a funding plan. A legislative analysis pegged the cost at $400 billion.

The abrupt announcement shields members of the Assembly from having to take a difficult vote that could be used against them by critics or supporters of the policy.

When Gov. Moonbeam represents the voice of reason, you can be pretty confident that there are some pretty serious practical hurdles to leap to implement a workable plan not to mention the political ones.

I wonder what would have happened when the tab turned out to be an order of magnitude higher than was being projected? When has any health care program come in under budget? Certainly not Medicare, Medicaid, or the Affordable Care Act. Medicare is presently two orders of magnitude more expensive than originally projected, even when inflation is taken into account.

9 comments… add one
  • Janis Gore Link

    Ummm. “potentially fatal flaws in the bill…such as financing, delivery of care, cost controls…”

    Maybe my vision is too narrow, but isn’t that everything?

  • Jan Link

    Good analysis, Janis!

    In the meantime think about what the CA super majority Dem party wants and/or is behind:

    State wide rent control
    Universial health care for everyone – citizens and non-citizens
    High speed rail between N & S CA
    A sanctuary state
    Travel ban to 8 other states
    Unfunded, huge public sector pensions weighing down it’s cities
    A crumbling infrastructure – i. e. roads, dams
    High gasoline and state income taxes
    A restrictive, costly regulatory bureaucracy that heavily leans on small businesses

    …..And, that’s just for starters.

  • Ben Wolf Link

    That Reason article is funny.

    A) In the late 1990s the right-libertarian argument du jour was that high medical costs in the U.S. would mean better health outcomes because markets.

    B) de Rugy’s initial argument is that economic forecoasts are too unreliable to trust. She then switches to an argument dependent on economic forecasting of costs seventy years in the future.

  • steve Link

    Costs of the ACA are running about 1/3 less than original CBO projections.

    https://www.cbo.gov/sites/default/files/115th-congress-2017-2018/reports/52468-outlookqfrs.pdf

    Steve

  • Guarneri Link

    So why are premiums absolutely through the roof………if you can find a carrier to pay them to.

  • TastyBits Link

    With a progressive state like California, the solution is easy – tax the rich.

    Even better, create some law to keep Hollywood from making movies outside of California and the US to take advantage of the tax breaks they decry.

  • steve:

    Your link doesn’t say what you think it does. It says the federal government spending 2019 will be a third less than they thought it would be in 2010. That’s not the same as “running”. That’s “will run”.

    BTW, here’s the original 2010 reference. The only figure that’s interesting is the gross costs. Net costs are speculative. And, of course, due to the construction of the PPACA the real cost we should be considering is total spending (federal government + individual).

  • steve Link

    Dave- Based upon it costing less already, and future trends.

    Drew- ACA premiums have generally been lower than expected. Early reports suggest larger increases for 2017 so will have to see at end of year if true.

    http://healthaffairs.org/blog/2016/07/21/obamacare-premiums-are-lower-than-you-think/

    Steve

  • Andy Link

    Steve,

    Well, as the link you provided explains, the cost reduction is due to a few factors:

    – Not as many people signing up as originally projected
    – The slowdown in the rise of health care costs generally
    – Changes to the ACA due to additional laws, SCOTUS decisions and administrative decisions.

    Then there is this:

    “The incremental budgetary effects of many provisions of the Affordable Care Act (ACA) are embedded in the spending for preexisting programs (Medicare, for example) and in broad categories of federal tax revenues. As a result, for such provisions, the actual results cannot be identified.”

    So for some portion of the ACA we don’t even know.

    It would be much more useful, IMO, to compare projected costs per enrollee with actual costs per enrollee, accounting for the difference in the overall rise of health care costs. The aggregate numbers are not useful because they don’t compare apples to apples.

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