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Fri05252018

Last updateWed, 27 Sep 2017 1pm

By many measures, the rambunctious campaign for a single-payer health-care system in California appears to be struggling.

A bill that would replace the existing health-care system with a new one run by a single payer—specifically, the state government—paid for with taxpayer money remains parked in the Assembly, with no sign of moving ahead. An effort by activists to recall Assembly Speaker Anthony Rendon for shelving the bill has gone dormant. And an initiative that would lay the financial groundwork for a future single-payer system has little funding, undercutting its chances to qualify for the ballot. 

But even if single-payer is a lost cause in the short term, advocates are playing a long game. For now, it may well be less a realistic policy blueprint than an organizing tool.

And by that metric, advocates are making gains.

Riding a wave of enthusiasm from progressive Democrats, supporters of single-payer have effectively made it a front-and-center issue in California’s 2018 elections. It’s been discussed in virtually every forum with the candidates running for governor, emerged as a point of contention in some legislative races, and will likely be a rallying cry at the upcoming California Democratic Party convention.

“This issue is not going away,” said Garry South, a Democratic political consultant who has worked with the California Nurses Association, which sponsored the stalled single-payer bill. “The progressive elements who are supportive of the single-payer concept know that it’s not going to happen now; it’s not going to happen tomorrow. It’s a long-term process, and Jerry Brown is gone as of January 2019.”

The governor has not needed to stake a position on the bill, because it skidded to a stop in the Assembly last summer without reaching his desk. But state Sen. Toni Atkins, a San Diego Democrat who co-authored Senate Bill 562, said Brown was not receptive. Analyses peg the cost of a statewide single-payer system at between $330 billion and $400 billion—far exceeding the state’s entire budget. That made it an anathema to Brown’s record of prioritizing fiscal stability for state government.

“When the governor saw that we introduced that bill… all he could look at me and do is shake his head and say, ‘$400 billion dollars.’ And I kept trying to say, ‘Can we back up and talk about what you've got to do to get (there)?’" Atkins said in an interview.

“He wasn’t letting it go.”

Atkins, who will take over as Senate leader next month, said she’s not giving up on the goal of single-payer, but does not expect it to happen this year. “People are polarized on this issue in a way that’s not good for coming together to get it done,” she said.

Led by the nurses association—a labor union that embraces firebrand activism—supporters of single-payer have targeted Rendon after he shelved the bill last summer, saying it lacked critical information on how to pay for a massive overhaul of the healthcare system. They peppered social media with images that not only portrayed the bill fight as a boxing match between Rendon and the nurses, but also depicted a knife labeled “Rendon” back-stabbing the bear symbol of California.

The nurses were not involved in the campaign to recall Rendon, said recall organizer Stephen Elzie, who has since dropped the effort and is now helping Democrat Maria Estrada challenge Rendon’s re-election bid. But the nurses union leapt into the governor’s race as one of the first labor unions to endorse Lt. Gov. Gavin Newsom. Single-payer has emerged as one of few issues on which the Democratic candidates disagree.

Newsom and Delaine Eastin, the former state superintendent of schools, have both said they support the nurses’ single-payer bill. Fellow Democrats Antonio Villaraigosa, former mayor of Los Angeles, and John Chiang, the state treasurer, say they want to expand health care so that everyone is covered, but not necessarily with the single-payer model that would abolish private health insurers and replace them with a government-run system.

A coalition of medical groups is lobbying against the single-payer bill, arguing that it makes more sense to protect and expand the federal Affordable Care Act, which has increased the number of Californians who have health insurance. Some members of the coalition have a history of spending big money to sway California elections. One of them, the doctors’ association, donated to Newsom before he voiced support for single-payer; it’s not yet clear if they will shift support to another candidate. 

Almost two-thirds of Californians like the idea of a statewide single-payer health-care system, although enthusiasm drops significantly if it would require raising taxes, according to polling last year by the Public Policy Institute of California. Still, Californians didn’t cite health care as a top priority when asked last month what the Legislature and governor should focus on in 2018.

The Assembly just wrapped up a series of hearings on what it would take to create a health-care system that covers all Californians. It exposed many obstacles—in both federal and state law—to swiftly enacting single-payer. For one, the state would need permission from the federal government—and perhaps an act of Congress—to shift billions of dollars from Medi-Cal and Medicare into a state-run single-payer plan. For another, if lawmakers raised taxes to fund single-payer, voters would likely need to approve changes to the California Constitution to allow the money to go to health care instead of schools. (That’s the only single-payer initiative that someone is trying to get qualified for the ballot; while a Silicon Valley tech consultant is gathering signatures for it, he doesn’t have support from the nurses’ union or any other well-financed group.)

Assemblyman Jim Wood, a Healdsburg Democrat who chaired the panel, called the single-payer bill “aspirational” and said he’s instead considering legislation that could help more Californians get health care without requiring permission from the federal government. One idea: extending subsidized health plans to adults who are undocumented immigrants.

“I believe we can actually get to single-payer, once we go through a lot of study and a lot of work,” Wood said. “But this feels, at times, more like a litmus test.”

CALmatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Politics

California’s resistance began before there was a resistance.

When Gov. Jerry Brown unveiled his final budget on Jan. 10, it bookended eight years of a progressive march to reduce greenhouse gases, expand health care, grant more rights to undocumented immigrants and raise the minimum wage to $15 an hour. Along the way, voters have assented by passing temporary taxes on the rich—not once, but twice. The top marginal income tax rate is now 13.3 percent, the highest state income tax rate in the country.

In short, policies that are now labeled acts of resistance to President Donald Trump were alive and ascendant in California long before Trump won the White House. But the contrasts have become much more stark.

Instead of cutting taxes, the Democratic governor and his party’s legislative leaders have passed a gas tax to help pay for aging infrastructure. Instead of trying to shift government out of the healthcare marketplace, California is looking for a way to fund single-payer health care, including coverage for undocumented immigrants. Instead of criminalizing pot, the state is looking forward to collecting taxes on marijuana sales.

In the months between now and the June deadline for a final budget, the governor and the Legislature will hammer out details. The focus this year: what to do with an expected surplus of $6.1 billion—and there are definitely differing opinions all around. Republicans say return it to California’s 40 million residents as a nice tax refund. The governor's priority is to fill up the state’s rainy-day fund. Democratic legislators mostly want to spend it.

“We have a very different approach,” said Assemblyman Phil Ting, D-San Francisco, who chairs the Assembly Budget Committee. “Our focus, the people who we think need tax relief, are the working Californians who are making less than $25,000. That’s where we want to spend our money, making sure they have money to pay rent, to pay for food.”

Rather than giving out “huge corporate tax breaks and a huge tax break for the wealthiest in this country,” Ting has a long list of how he would like to spend that extra money, including:

• Increasing the state’s Earned Income Tax Credit, which puts money into the hands of the working poor.

• Expanding Medi-Cal health care for poorer Californians to cover all remaining uninsured residents, mostly undocumented immigrants.

• Expanding early education for 4-year-olds through preschool and transitional kindergarten programs.

• Increasing college aid.

• Expanding mental and social services to reduce the number of criminals who go on to re-offend.

As supportive as Brown might be of these Democratic aspirations, his administration is urging legislative leaders to proceed with caution. The state’s tax structure is more vulnerable than ever to the stock market gains and losses of its wealthiest citizens, and the governor said California must prepare for the next economic downturn, because a mild recession could wipe away at least $20 billion a year in revenues.

He also warns of uncertainty from Washington, D.C.

“There are certain policies that are radical departures from the norm, and California will fight those, whether it’s immigration or offshore drilling,” Brown said. “We don’t know what will happen. I wouldn’t want to portray a California-Washington battle, although there are some key differences, and we’ll espouse our values.”

Since Brown was elected to begin his second stint as governor in November 2010, the state has climbed out of the recession and enjoyed economic prosperity. The unemployment rate, which topped 12 percent, now stands at 4.6 percent. Since his return, California has added 2.4 million jobs, and hourly wages are up $4.76 an hour. The state, which carried a $25 billion deficit in his first year back, has enjoyed billion-dollar surpluses in recent years, and the state now has a rainy-day fund.

The governor’s proposed $190 billion budget is dominated by spending on education (29 percent) and health care (32 percent). Health care spending has been growing particularly fast since the state embraced the Affordable Care Act, also known as Obamacare. The act not only grew the marketplace for private health plans; it allowed states to expand their Medicaid health insurance programs for the poor.

Because California is among 30 states that expanded Medicaid, the federal government is paying at least 90 percent of the cost for newly eligible enrollees. That has allowed California to draw billions in extra funding from the federal government to bolster Medi-Cal, the state’s version of the national Medicaid program. As a result, the number of people without health coverage in the state has dropped to a historic low: from 17.6 percent in the 1980s to 7.6 percent in 2016. Today, one in three Californians is covered by Medi-Cal.

Public schools too have greatly benefited since the recession, with much of the extra spending on schools going to improve teachers’ salaries.

However, if the federal government doesn’t reauthorize the Children’s Health Insurance Program for 1.3 million children, that could add more than $850 million in costs to the state over two years.

Worse, if Republicans in Washington slash Medicaid funding in 2018, the state could lose between $25 billion and $50 billion, said Chris Hoene, executive director of the California Budget and Policy Center, a progressive think tank in Sacramento.

“The reality is California could not afford the scale of the cuts the GOP has been proposing,” Hoene said. “That’s going to put state leaders in a position of deciding who gets state services and how do they fund that.”

Other factors are straining the budget. For example, pension costs for public workers continue to be one of the fastest-growing liabilities—driven by lower investment-rate assumptions, higher health care costs and longer life spans.

Voters, too, could turn on Brown and lawmakers. Early polling suggests Republicans have a decent shot at repealing a gas tax hike that went into effect late last year. Brown said at a press conference Wednesday that he believes a repeal initiative could be defeated.

The Legislature’s nonpartisan budget analyst is also urging lawmakers not to commit to too many new spending programs.

“As it crafts the 2018-19 budget and future budgets, we encourage the Legislature to consider all of the uncertainty faced by the budget in future years and continue its recent practice of building its reserve levels,” the analyst wrote.

On the flipside, Republicans are calling for a tax refund, if not an outright repeal of state income taxes. They argue that California’s high taxes chase residents out of state.

“This surplus is a direct result of Capitol Democrats overtaxing hard-working Californians,” said Assemblyman Matthew Harper, R-Huntington Beach. “Rather than expanding an ever-growing list of government programs, our leaders should figure out a way to return that money to the people who earned it in the first place.”

Assemblyman Vince Fong, R-Bakersfield, said he plans to introduce tax cuts aimed at helping families and small businesses stay in California.

“As we see all too often now, we are losing families and small businesses to neighboring states that have tax burdens much lower than California’s high-priced tax code,” Fong said on Twitter. “We have an opportunity to change that.”

Brown dismissed the refund idea, saying it would only prompt service cuts to public schools and universities later. “If you want to budget responsibly, you need big surpluses in years that are good,” he said.

Still, there’s a growing sentiment that California may have to respond to recent changes in the federal tax plan, specifically a $10,000 cap on state and local deductions that will hit millions of households.

According to the state Finance Department, the average deduction for state and local income taxes alone is nearly $16,000 per return, while state and local property taxes average less than $6,000 per return. Because a portion of those taxes will no longer be deductible, it acts as double taxation for California taxpayers.

Senate President Pro Tem Kevin de León, who is running for U.S. Senate, introduced legislation Thursday to shield Californians from bearing the costs of the tax overhaul. The bill, dubbed Protect California Taxpayers Act, would allow taxpayers to make charitable deductions to the state and receive a dollar-for-dollar tax credit on the full amount of their contribution. By having residents donate to the state government as a charitable contribution, the contribution remains deductible on federal taxes.

“The Republican tax plan gives corporations and hedge-fund managers a trillion-dollar tax cut and expects California taxpayers to foot the bill,” de León said in announcing his legislation. “We won’t allow California residents to be the casualty of this disastrous tax scheme.”

Brown was particularly vocal against the GOP tax proposal, calling it a “tax monstrosity,” but the governor expressed reservations about whether the state could sidestep federal law.

“It looks interesting,” Brown said. “But two questions: Can it work? If it does work, can the Internal Revenue Service issue a regulation and completely subvert it?”

De León responded that he was confident it would work, because similar charitable deductions have already been given out for education-based contributions.

For now, state Democrats are in agreement about a common threat.

Whether it’s federal tax changes or entitlement cuts, the leader of the Assembly, Anthony Rendon, D-Paramount, said he’s most concerned Republicans in Congress and the Trump administration will take another swipe at liberal California in 2018. “We’re worried about the next shoe to drop.”

CALmatters is a nonpartisan, nonprofit media venture explaining California policies and politics.

Published in Politics

California’s Democratic legislators want to extend health benefits to undocumented young adults, the continuation of an effort that ushered children without legal status into the state’s publicly funded health care system last year.

It is unclear when the program would start or how much the state would spend if the proposal, which could cost up to $85 million a year, is approved by Gov. Jerry Brown. Lawmakers are working out details ahead of their June 15 deadline for passing a new budget.

The plan would provide full-scope coverage for 19-to-26-year-olds who qualify for Medi-Cal, the state’s name for Medicaid. Currently, the federally funded program covers only emergency visits and prenatal care for undocumented residents. Under the proposal, revenue from taxes on tobacco products would absorb expenses for all other coverage.

Democratic Sen. Ricardo Lara of Bell Gardens has been one of the strongest voices for expanded care. In 2015, he pushed for coverage for all adults. That proposal was changed to admit only undocumented children; it took effect last year. This year, he said in a recent video message to supporters, “We are going to make the final push to ensure we capture our young adults.”

Supporters’ ultimate goal is to include all undocumented adults, said Anthony Wright, executive director of Health Access California, a health care consumer group backing the proposal.

“We believe without coverage, people are sicker, die younger and are one emergency away from financial ruin. It has consequences for their families and their communities—both health and financial consequences,” he said.

The plan would mean that undocumented children currently in the program would not age out at 19, putting low-income undocumented immigrants on par with those allowed to stay on their parents’ insurance under the Affordable Care Act (often called Obamacare) until they are 26.

Republican Sen. John Moorlach of Costa Mesa opposes an extension of benefits. One reason is financial: California doesn’t have “a balance sheet we can brag about,” he said, citing the state’s debt load, among other reasons.

Secondly, he disapproves of illegal immigration. Moorlach migrated to the U.S. legally as a child with his family from the Netherlands.

“I’m kind of offended that we feel an obligation to pay for expenses for those who did not come through the front door,” he said. “I certainly have compassion and want to help people in need, but I’m having difficulty, as a legal immigrant, because we are already in such bad fiscal shape.”

Advocates argue that undocumented immigrants help propel California’s economy with their labor and the taxes they pay, and that they cost the state money when they don’t work because of illness or when they end up in the emergency room.

“Health care is a right,” said Ronald Coleman, director of government affairs for the California Immigrant Policy Center, an advocacy organization and supporter of the proposal. “These are folks we are investing in through the California Dream Act and through other programs our state offers, and it makes sense to invest in our future, which our young adults will be.”

Estimates vary for how many people this expansion of Medi-Cal would serve and what the costs would be. Each house of the Legislature has passed its own version of the proposal, with differing figures attached.

The Assembly allocated $54 million a year to cover an unspecified number of additional enrollees, with a July 2017 start date. The Senate proposed $63.1 million in the first year, beginning in 2018, and $85 million annually thereafter, also without specific population numbers.

Coleman’s center, which is working closely with lawmakers on the issue, estimates about 80,000 new people would be eligible, and the cost would be around $54 million a year. That assumes the federal Deferred Action for Childhood Arrivals program continues, because it provides access to Medi-Cal. If DACA were eliminated, the figures would increase to about 100,000 eligible people and about $84 million in annual costs, Coleman said.

The governor’s proposed budget does not include the proposed expansion or any money for it.

Kevin, a 19-year-old Angeleno who asked that only his first name be used, because he lives in California illegally, wants the proposal to succeed. He has been working for more than a year to distribute information about Medi-Cal children’s coverage to immigrant families.

He meets all but one of the requirements for DACA: He was not in the country before June 15, 2007. He arrived in the U.S. in 2011 at age 14 from Guatemala, on a visa that later expired. He graduated high school, has no criminal record and is now majoring in business administration at California State University, Los Angeles.

“There’s this misunderstanding that young people are healthy,” said Kevin, who suffers from eczema. He worries about the chronic condition flaring up. “When it gets worse, it doesn’t let me do anything with my hands.”

He is enrolled in a county health insurance program for low-income residents, but he can’t afford a dermatologist. He can barely pay for the prescription lotion he uses for the eczema, and sometimes goes without it.

“We are trying to have a better economic standard, and we are like the building blocks of this society,” he said. “Having health insurance will allow us to focus more on school and do our regular day-to-day activities. A healthier society works better for everyone.”

If lawmakers can now agree on details, a consensus proposal will go to the full Legislature for approval. The deadline for that is June 12.

CALmatters.org is a nonprofit journalism venture dedicated to exploring state policies and politics.

Published in Local Issues