California just took a significant step toward single payer health care.
On Oct 7, Governor Gavin Newsom signed Senate Bill 770 (Unified Health Care Financing) into law. Introduced by Senator Scott Wiener (D-San Francisco), the law directs the Secretary of the California Health and Human Services Agency to research, develop and pursue a waiver framework for unified health care financing in the state.
That is wonky language. So let me explain.
For California to deliver single payer health care, it not only needs its own funding to cover uninsured state residents. It also needs to redirect existing federal dollars that fund Medicaid (Medi-Cal in California) and Medicare coverage for millions of Californians. To do so, the state would need to work out a first-of-its-kind arrangement (a “waiver”) with the federal government to use those dollars in a new way. That is no straightforward task.
Money has long been a sticking point for single payer
California has contemplated single payer health care for decades. In fact, California has debated variations of single payer legislation at least 10 times since 1994. Assemblymember Ash Kalra (D-San Jose) authored the most recent attempts. He introduced Assembly Bill 1400 in 2022 that would have created a single payer program called CalCare. He introduced a different version of the bill as AB 1690 this year. Neither bill advanced beyond the state Assembly.
A main sticking point has been cost. Despite extensive evidence that single payer health care systems save money, fear of higher federal and state taxes up front has often stymied momentum. In fact, CalCare legislation was uniquely designed to separate the financing debate from the bill. If CalCare had advanced, the financing would still have had to be decided, in part, by voters at the ballot box. And asking voters to approve a substantial tax increase is no small feat.
Even if approved, the state would have had to work out how to redirect Medicaid and Medicare funding to CalCare. And there was no guarantee–none whatsoever–that would happen. The newly signed law, however, seeks to ease that sticking point by resolving those major financing questions…in advance.
The law builds on the work of a visioning commission
SB 770 builds on SB 104 from 2019, which established the Healthy California for All Commission. That commission worked to identify ways California could move toward universal coverage. Their 2022 final report [pdf] recommended a unified financing system that would entitle all Californians to comprehensive health care services without distinction between private and public health insurance plans.
The commission also concluded that a single payer system would save money. It also emphasized that the transition to a unified financing system would require a total overhaul of health insurance financing arrangements in the state. It did not fully propose how to create that unified financing system, leaving that task for later. And notably, commissioners indicated there was little room for corporate profit-making in such a system.
A consequential step forward
The Los Angeles Times has reported that the bill faced opposition from the right and left. On the right were the usual opponents to universal health care. On the left was the California Nurses Association, which has otherwise been a major sponsor of many single payer efforts in the state. Their concern? The bill doesn’t move us quickly enough to enacting single payer legislation.
They may be right. But convincingly figuring out how to finance health care for all of California is a daunting task with little guarantee of success. Solving this preemptively (if it can be done at all) makes sense. And beyond expanding Medicaid to more people, it is among the most consequential steps the state can take toward single payer health care.