California’s Single-Payer Referendum

Against the Current, No. 52, September/October 1994

Mike Rubin

GIVEN THE ABSENCE of political will in Washington to impose employer mandates and provide universal coverage, the most important event this year in the struggle for real health care reform may take place in California — where voters this November will have the opportunity to approve a true single-payer plan, the California Health Security Act.

Undoubtedly all players in the health care struggle will be watching closely.

The act was written by two doctors and placed on the ballot through the state’s initiative process. Health care activists assembled a statewide coalition, Californians for Health Security, including senior citizen groups, some labor unions (notably SEIU locals), Neighbor to Neighbor, public interest groups and even a few local Democrats.

This coalition was able to mobilize thousands of volunteers and raise hundreds of thousands of dollars to pay for signatures to supplement the volunteer effort. Over one million signatures were turned in.

The act’s key feature is universal coverage. Each California resident would get a health security card. The only exception, unfortunately, is that the authors decided to duck the question of coverage for undocumented aliens, leaving this to the legislature.

Given the current California political climate the undocumented would likely not be covered, a fact that has already caused some political problems. While socialists strongly disagree with that decision, we should not withhold our support from the initiative.

Benefits would include comprehensive medical care, including long-term care and prescription drugs. Mental health benefits would begin in the second year, with dental benefits to be added as funding permits.

Californians would be free to go to any licensed care provider or facility — a great improvement for the millions who live on Medicaid or on county health systems. At the same time those in health maintenance organizations, preferred pro<->vider organizations or those who are part of union or union-management trust funds could continue to receive their health care through such arrangements or change as they wish.

This freedom of choice contrasts sharply, and very favorably, with Clinton’s health alliances/managed competition model.

Financing Single Payer

Funding will be provided from four separate sources.

* Existing state and county spending on health care, along with the money the federal government spends on Medicaid and Medicare, will be put into the fund.

* There will be a payroll tax paid by employers (ranging from 4.4% to 6.9%, depending on the number of employees).

* There will be a 2.5% income tax with a surtax of an additional 2.5% for individuals who have a net taxable income of $250,000 or more and couples who have a net taxable income of $500,000 or more.

* Finally, the tax on cigarettes will rise to $1 a pack.

From a left perspective, the tax on individuals and couples should be more progressive. For the unionized sector of the working class, collective bargaining could result in employers picking up that 2.5% tax.

The program will be administered by an elected health commissioner. There also will be a statewide consumer council, a technical advisory board and regional consumer advocates. Standardized fee schedules will be negotiated with each group of providers. Administrative costs will be capped at 4%. Health care spending will be capped at today’s level.

Spending will be allowed to rise only if the Gross Domestic Production of California rises and/or there is a rise in population. The first benefits would begin in 1996 if the initiative passes this November. Given these constraints, a concern has arisen about future raises for health care workers, but it is difficult to predict what will happen as the details are worked out down the road.

The Opposition’s Strength: Its Money

The struggle to pass this initiative will be massive. The representatives of large and small business, as well as the health insurance industry, have publicly promised to spend whatever it takes to defeat it. They will try to tap into the anti-government, anti-public sector sentiment that has grown since the 1970s. Their favorite line is: If you like the U.S. Postal Service, you’ll love single payer.

They will try to convince people that this initiative or any single payer plan is too complex, can’t work, etc. They will try to convince the better-off workers who have health insurance that single payer will mean worse care and higher costs for them. Based on talking to people in my union (California State Employees Association, SEIU), people are worried about what change might bring.

Organizing Our Side

We on the left must counter with our ideology. We believe that health care is a right; that people should come before profits; the fact millions of people have no health insurance including over five million in California alone is a disgrace, a sign that capitalism cannot meet human needs. We believe that extending health care is an act of class solidarity. We believe in an activist public sector and reject privatization. Rather we point toward a new society in which everyone makes a contribution and in return gets the things necessary for a good life.

The act would still keep the delivery of health care in private, for-profit hands. Hospitals and clinics would still operate within the context of a capitalist market. The profit motive in research, the cost of drugs and hospitals and doctors’ fees wouldn’t be eliminated — merely controlled by a global medical budget. That is, single payer isn’t socialized medicine.

But the California Health Security Act is a real reform. Coverage cannot be taken away, lost or denied for pre-existing conditions. It is not tied to a particular job. There are additional benefits for most people even if they have health insurance, such as long-term care and mental health benefits. With its passage, preventive medicine would become the primary means of controlling costs.

There is also a job-training provision for individuals who will be displaced from the insurance industry.

Eliminating the parasitic insurance companies would be a fantastic victory. Every socialist and every activist needs to do whatever possible to pass this initiative in November.

ATC 52, September-October 1994