What Really Happened With the California Single-Payer Bill?

Let me begin by saying I have never lived in California. I don’t know exactly how the state government works, and I don’t generally pay close attention to California news.  If that’s true for you, too, then let’s explore this together.

A few days ago there were news stories about California possibly moving to a single-payer health care system within the state. There was a bill moving toward passage, the news stories said. Then there were stories about the bill being killed by California Assembly Speaker Anthony Rendon. In progressive circles the death of the bill was attributed to Rendon’s being a corporate stooge who took money from the medical industry. David Sirota wrote in International Business Times,

As Republican lawmakers grapple with their unpopular bill to repeal Obamacare, Democrats have tried to present a united front on health care. But for all their populist rhetoric against insurance and drug companies, Democratic powerbrokers and their allies remain deeply divided on the issue — to the point where a political civil war has spilled into the open in America’s largest state.

In California last week, Democratic state Assembly Speaker Anthony Rendon helped his and his party’s corporate donors block a Democrat-sponsored bill to create a universal health care program in which the government would be the single payer.

Rendon’s decision shows how progressives’ ideal of universal health care remains elusive — even in a liberal state where government already foots 70 percent of the total health care bill.

Now, you all know David Sirota’s work, I suspect. I’ve been reading his stuff for years. He’s one of “our” writers. Sirota goes on to say that although the bill had passed in the state senate, Rendon had quashed it before it could go on to the state assembly. Sirota continues,

Since 2012, Rendon has taken in more than $82,000 from business groups and healthcare corporations that are listed in state documents opposed the measure, according to an International Business Times review of data amassed by the National Institute on Money In State Politics. In all, he has received more than $101,000 from pharmaceutical companies and another $50,000 from major health insurers.

In the same time, the California Democratic Party has received more than $1.2 million from the specific groups opposing the bill, and more than $2.2 million from pharmaceutical and health insurance industry donors. That includes a $100,000 infusion of cash from Blue Shield of California in the waning days of the 2016 election — just before state records show the insurer began lobbying against the single-payer bill.

Well, that’s pretty damning, isn’t it? Another reason Dems always lose.

I didn’t think anything more of it until I read this article by David Dayen at The Intercept that gave a different view.

IN THE DAYS SINCE California Assembly Speaker Anthony Rendon shelved for the year SB562, which intends to establish a state single-payer health care system, he’s been subject to mass protests and even death threats. The bill’s chief backers, including the California Nurses Association and the Bernie Sanders-affiliated Our Revolution, angrily point to Rendon as the main roadblock to truly universal health care.

They’re completely wrong. What’s more, they know they’re wrong. They’re perfectly aware that SB562 is a shell bill that cannot become law without a ballot measure approved by voters. Rather than committing to raising the millions of dollars that would be needed to overcome special interests and pass that initiative, they would, apparently, rather deceive their supporters, hiding the realities of California’s woeful political structure in favor of a morality play designed to advance careers and aggrandize power.

And I’m thinking, holy bleep, what the bleep is going on here?

Did I mention this is David Dayen? I’ve been reading his stuff for years, too. He’s good. And he is known to be a wholehearted supporter of single payer healthcare.

Having done some digging, I’ve come to think the bill, SB562, was never a serious bill. It was more about grandstanding and legislative theater than actually initiating single payer in California. I could be wrong, but that’s what it looks like.

Kevin Drum at Mother Jones provides some background.

Funding. Single-payer would cost something like $200 billion, give or take a few billions. This is nearly double the entire state budget, but SB562 blithely ignored it. It included no funding mechanism at all, and simply passed that responsibility to the state Assembly. It’s not surprising that Rendon was reluctant to shoulder this on his own over the course of the next few months.

Prop 98. Like it or not, California has a school funding law put in place years ago by Proposition 98. It’s insanely complicated, but basically requires that 40 percent of the state budget go to K-12 schools. Using round numbers, if the state budget is $100 billion, school spending has to be at least $40 billion. If state spending goes up to $300 billion, school spending has to be at least $120 billion. Aside from being ridiculous, it also leaves only $120 billion for the health care bill. Oops.

As far as I know, there is no tricky way to get around this. It would have to be dealt with by a ballot initiative. That’s obviously not going to happen in this legislative session.

Waivers. This is the issue nobody pays attention to, but is probably the most important of all. To implement single-payer, California would need $200 billion in new funding plus $200 billion in federal money that currently goes to Medicare, Medicaid, veterans health care, and so forth. Without federal waivers to give California access to that money, the plan can’t go anywhere. As Duke University researcher David Anderson puts it, “If there aren’t waivers, this plan is vaporware.” What do you think are the odds that the Trump administration will grant all those waivers? Zero is a pretty good guess.

Along the same lines, Michael Hiltzik points out that self-funded health care plans are governed exclusively by federal law. That means California would need an exemption from the law. What do you think are the odds that a Republican Congress will grant that exemption? Zero again?

Kevin Drum and David Dayen are both Californians, I understand, so they know the ins and outs of how California works a lot better than I do. And if Kevin Drum is right, then even if the bill passed the assembly and were signed into law, it still wouldn’t be implemented. There is language in the bill that would stop it from going into effect if funding isn’t available, and because of all the reasons stated above, it currently wouldn’t be possible for the funding to be available.

So what, exactly, is the point?

If any state could make single-payer work it ought to be California, which claims to have the sixth largest economy in the world. But it appears to be true that SB562 contains no mechanism for funding, and this is one of the reasons Anthony Rendon delayed the bill. This doesn’t strike me as being unreasonable.

Let’s go back to David Dayen:

There’s a reason that every California single-payer bill in the last 25 years — and there have been at least seven, two of which passed the legislature and were vetoed, so we in the Golden State have seen this movie before — never includes a funding mechanism. It’s not necessarily because of fear of voting for higher taxes, or even the two-thirds threshold to increase a tax in the legislature.

It’s because you can’t do the funding without help from the voters, because of California’s fatal addiction to its perverse form of direct democracy. The blame, in other words, lies with ourselves.

To figure this out, you need only turn to the actual legislative analysis of the Senate bill, which passed in early June. It states very clearly what Rendon alluded to in his announcement shelving SB562: “There are several provisions of the state constitution that would prevent the Legislature from creating the single-payer system envisioned in the bill without voter approval.”

Those provisions include California’s byzantine, previously mentioned Proposition 98, which Dayen explains in more detail. To make single-payer funding possible Prop 98 would have to be suspended.

Self-appointed experts have countered that the state can suspend Prop 98 with a two-thirds vote of the legislature. This has been done twice in the past, during downturns in the economy. But the suspension can last for only a single year; it would have to be renewed annually to keep single payer going. More important, as the California Budget and Policy Center explains, after any suspension, “the state must increase Prop 98 funding over time to the level that it would have reached absent the suspension.”

So legislators would have to vote year after year to suspend Prop 98, but add more money back to cover it in subsequent years. That backfill would grow with every budget, and over time lawmakers would need to vote for ever-increasing giant tax hikes. If this didn’t return Republicans to power in Sacramento within a few years, some enterprising lawyer would sue the legislature for violating the spirit of Prop 98. Suspension is not politically, legally, or financially sustainable.

So, again, it sounds as if SB562 couldn’t be put into effect even if it became law, a point its supporters stubbornly refuse to concede. And the many unacknowledged roadblocks are also being overlooked by progressive organizations eager to make points about corporate sellouts in the Democratic Party. Certainly the Dems have more than their share of corporate sellouts, but IMO in this case making a scapegoat out of Anthony Rendon is just wrong. Dayen continues,

The California Courage Campaign pleaded with Democrats in an email blast to “fight for single payer today, not next year.” But Democrats can’t pass single payer today or this year; under state law, ballot measures only occur during statewide elections in even-numbered years. Even the chair of the state Democratic Party, Eric Bauman, insisted that “SB562 must be given the chance to succeed,” even though it, um, can’t succeed.

The California Nurses Association, when not posting “stabbed in the back” imagery in reference to Rendon, called his decision “heartless,” “unconscionable,” and “disingenuous.” But there’s nothing more disingenuous in this debate than failing to level with people that SB562 cannot become law on its own.

Did I mention that Anthony Rendon has actually received death threats? And I’ve been an admirer of the California Nurses Association since they took on Arnold Schwarzenegger awhile back. But this is wrong. Everybody needs to chill about Anthony Rendon.

I know everybody’s tired of being told that we can’t have nice things now because pragmatic incremental whatever. But it’s also the case that sometimes things aren’t possible until paths are cleared for them. While, in theory, California’s economy ought to be able to support single payer, it’s not going to be possible until other laws — like Prop 98 — are changed first.  And if you aren’t working on that, you aren’t serious about passing single payer.

I run into this a lot with lefties. Yesterday I ran into a rant that Bernie Sanders has his priorities wrong because he didn’t introduce a Medicare for All bill into the Senate this week.  Would somebody explain to these puppies that a snowball has a better chance in hell than Medicare for All has in the current Congress? Because I don’t have the strength. And there’s been this little matter of stopping the passage of Trumpcare, which must have escaped their notice. That’s the priority.

I’m really tired of explaining why there can be no viable, national third party for progressives until we have significant voting and election reform that allows for proportional representation. I’ve tried and tried. They don’t listen to me. And like it or not, it’s way too soon to introduce a serious proposal to impeach Donald Trump into the House. This is not about whether or not he deserves it; it’s about the plain fact that such a proposal would go nowhere. The time may be ripe one of these days, but it isn’t now. And introducing unserious proposals now might make it harder to introduce a serious one later.

Bottom line, I fear that David Dayen is right on this, that SB562 was not a serious attempt to establish single payer in California, but instead was just legislative theater designed to aggrandize power within the progressive movement. Let’s stop doing this, people.