The Healthy California Act, SB 562 (Lara and Atkins), will guarantee that every person living in California receives comprehensive healthcare services. It is similar to Medicare for All, but more comprehensive. There will be no deductibles or co-pays. It will cover all medically necessary care, including medical, vision, hearing and dental. You will be free to choose your provider without networks restricting your choices. The full text of the bill is available here.
The Healthy California Act will not disrupt how medical providers deliver healthcare services, but it will dramatically change how Californians gain access to those providers and services. The HCA will eliminate insurance companies. Instead of having an id card from an insurance company, Californians will have an HCA id card. That id card will provide access to medical providers - there will no longer be co-pays to providers, or out-of-pocket deductibles that must be paid. The Healthy California Trust will pay the entire cost of the visits and services received.
Coverage will be comprehensive. Californians will receive all medically necessary care, including hearing, dental, vision, chiropractic, addiction treatment, adult day care, care in a skilled nursing facility, and home health care, including health care provided in an assisted living facility. It will include medical equipment, appliances, and assistive technology, including prosthetics, eyeglasses, and hearing aids and the repair, technical support, and customization needed for individual use. No longer will Medicare recipients be in the untenable situation of having coverage for the doctor to diagnose hearing loss, but no coverage for the services and device to improve their hearing. Seniors in California will be in the enviable position of having better coverage under HC than under their current Medicare coverage - and with no co-pay.
Prescription drugs will be included in HC coverage. And, unlike Medicare which is explicitly prohibited from negotiating with pharmaceutical companies, our HC board will be charged with negotiating directly with drug manufacturers to get the cheapest prices possible for our 38 million Californians.
How will the bill be funded? First, California will apply to the federal government for waivers from all federal healthcare spending dollars. Waivers will be sought from Medicare, Medicaid, Children's Health and The Affordable Care Act (Obamacare). Those monies would be directed to the Healthy California Trust which will collect all health revenues and disburse medical payments to providers. Currently, 70% of healthcare dollars spent in California are government dollars (UCLA Center for Health Policy Research, 2016).
The remaining monies that are currently paid to insurers in the form of premiums (or directly from large, self-insured entities) will be replaced by a healthcare tax, the majority of which will be paid by businesses with gross receipts over $2 million and smaller portion from individuals' income. Although it will be collected as a tax, remember that it is really just a different way of collecting premium dollars.
Currently, premiums are paid by employers and employees to a health insurance company such as Anthem Blue Cross or Kaiser. The HCA will accommodate Kaiser as an integrated managed care consortium; so Kaiser will exist as medical care provider, but not as a collector of premiums.
Currently, insurers are allowed to keep 20+% of each premium dollar for administrative costs and profit. Medicare currently has just a 4% administrative cost per dollar. It is expected that the Healthy California Trust will operate will an administrative cost similar to that of Medicare, and significantly lower than 20%, resulting in 16+% efficiency savings.
When the bill was voted through the Appropriations Committee on 5/25, financials had not yet been incorporated. The comprehensive economic study conducted by Dr. Robert Pollin of the Political Economy Research Institute (PERI) of U Mass Amherst was available only three days before it was voted through the Senate in June, so it could not be included. Procedurally, the next opportunity to incorporate the financial mechanism would be when it is before the Assembly Appropriations Committee. There are two proposed funding mechanisms: a combination of gross receipts/sales tax of 2.3% each. There is an alternate payroll tax option. Healthy California prefers the combination of the gross receipts (first $2 million exempt) and the sales tax of 2.3% with the usual exemptions for utilities, groceries, etc. Here is a link to the comprehensive economic study: http://www.healthycaliforniaact.org/resources/. It is under the fiscal analysis link.