The not surprising reaction of some in the California legislature to the debate over repealing and replacing the Affordable Care Act is to propose a state-run single-payer healthcare model. I say “not surprising“ because there have been attempts in the past to secure a single-payer plan in California, and the negative reaction in deep blue California to the Trump Administration gives supporters of the single-payer system belief that the time is right to implement single-payer.
The single-payer plan was not a good idea for small business when it was brought up in the past and it is not a good idea today. Ironically, the single-payer proposal suffers from the same shortcoming that the current debate over replacing the Affordable Care Act does—how to pay for it?
State Senators Ricardo Lara and Toni Atkins introduced the single–payer proposal in SB 562 but it was void of many details on how the plan would work. The senators promised to fill in details later.
Details include negotiating with hospitals and doctors and most importantly, deciding how to deal with ever–rising health care costs. Federal funding for a state–run health system is uncertain, which would only add to the state’s costs.
The small business community could be the most adversely affected by how a single-payer plan is funded. Even if efficiencies reduce some costs, funding for a single-payer health care plan must come from the providers or the consumers with likely additional help from taxpayers and even mandates on businesses.
Services would likely be slowed or parceled out (much like the constant complaint of long wait-times to see a doctor under the Canadian single-payer system), and taxes would be raised and businesses would become a target, mandated to cover health care costs. Even without a mandate, tax increases could be specifically targeted at businesses to fund health care. Taxing business seems to be the fall back position for many schemes discussed in the legislature.
Ensuring all Californians have access to quality, affordable health care is an admirable goal, but as most business people will tell you, it has to pencil out. Changes to the system creating insurance pools beyond state borders would be one step in the right direction. Small businesses could find a larger pool of the insured to reduce costs for covering their employees.
However, the current empty shell proposal of SB 562 should put small business on edge because their costs very well would skyrocket under such a plan.