SACRAMENTO, Calif._With a state Senate vote possibly imminent on a single-payer health system for California, supporters Wednesday released a study estimating it would cut spending on health care in the state by 18 percent and cost tens of billions of dollars less than the state's estimate for the plan.
Extra costs could be covered by tax increases, according to the analysis sponsored by the California Nurses Association/National Nurses United, the leading supporter of legislation.
A legislative analysis had estimated the cost of the proposed system to be $400 billion annually, but a study released by the nurses Wednesday estimates the yearly cost would be $331 billion as of 2017.
The estimate was made by the Political Economy Research Institute at the University of Massachusetts, Amherst, in a study partly financed by the nurses association.
State Sen. Ricardo Lara, a Democrat, authored a bill that would provide a Medicare-for-all-type system and said the study shows the plan can guarantee health coverage for all Californians without the out of pocket costs that leave a third of all state residents underinsured.
"The good news is that California can get a lot more for our money," Lara said at a Capitol news conference. "Families will pay less for health care."
The study estimated the amount spent on health care will drop up to 9 percent for middle-class voters who are currently insured, and 5 percent for low-income residents.
Senate Bill 562 is eligible for a vote by the state Senate this week, although Lara said he planned to meet with supporters on how to incorporate the findings of the new financial report into the proposal. The financial review proposes to cover part of the cost of the single-payer system with a 2.3 percent increase in the state sales tax and its gross receipt tax applied to California businesses.
The new plan could use public health care revenue sources that are currently covering 71 percent of all health care funding in the state, including Medicare, MediCal and tax subsidies for health care, said Robert Pollin, the institute's director.
Polon was an economic adviser to California Gov. Jerry Brown's campaign for president and Lara said he hoped his involvement would convince Brown to support the legislation.
If the state can obtain waivers in all of the present areas of public health funding, it will provide $225 billion of the cost of a single-payer program.
"That means that the remaining $106 billion to fund Healthy California will need to be provided by new revenue sources in the state," the study says.
To ease the tax burden, the proposal would exempt the first $2 million in receipts for all businesses, meaning companies that average up to nine employees will have no gross receipts tax obligation. The sales tax would exempt spending on housing, utilities and food at home.
"What this new study proves is that we can finally achieve the dream of guaranteeing healthcare for all Californians, without the punishment of crippling out-of-pocket costs," said RoseAnn DeMoro, executive director of the California Nurses Association.
Meanwhile, the nurses association released a poll it sponsored that says 70 percent of Californians support the legislation and 58 percent remain supportive after hearing opposition arguments. The poll was conducted by the Tulchin Research firm, and involved the survey of 600 likely California voters.
