If California wants to go all in on universal health care, Vermont’s former governor is here to help
By Angela Hart, ahart@sacbee.com, Dec 14, 2017, Sacramento Bee
As Republicans in Congress continue their efforts to undo Obamacare, California is going in the opposite direction.State lawmakers are exploring how – and when – to expand coverage to all Californians, while also reining in soaring health care costs that make the U.S. the most expensive country in the world for medical care.The best option for California is to create the nation’s first universal, taxpayer-financed health care system that gets rid of the need for private insurance companies, some Democrats said this week after hearing from a blue state governor who tried to create such a system, known as single-payer health care.
In a wide-ranging health care hearing in Los Angeles, Shumlin outlined a political and legislative strategy for California lawmakers:
Set specific goals
“I would write a bill that sets very clear goal posts that you have to meet, before your public financing kicks in,” Shumlin said. “I’d write the bill for the next governor – not this governor – because as someone who was trying to work on this toward the end of my tenure as governor, I found that I lost a lot of political clout.”
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Still, lawmakers this week endorsed Shumlin’s idea, saying their efforts should be focused on writing a bill that improves on Senate Bill 562, the single-payer proposal introduced earlier this year.
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Assemblyman David Chiu, D-San Francisco, a co-author of the Lara-Atkins bill, said he’s open to reworking the proposal or writing a new bill.
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Tie the bill to cost controls
“My big mistake was not going after cost before I promised a better plan,” Shumlin said.
Any form of single-payer coverage would require a new taxing system to replace current insurance premiums, co-pays and deductibles. Shumlin, first elected governor of Vermont in 2010, made publicly funded universal health care his most ambitious campaign promise. His proposal included an 11.5 percent payroll tax on businesses and an additional income tax on employees of up to 9.5 percent.
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Change how providers are paid
Shumlin attributed escalating costs, primarily, to the fact that many medical providers are paid based on volume of care rather than quality.
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“Look at Vermont’s example, and quickly move away from fee-for-service to an outcome-based payment system or I don’t believe you’ll ever get number one, the savings you need or number two, the outcomes you need,” Shumlin said. “Let’s not forget we spend more money on health care than any other nation in the world. Our outcomes aren’t as good. It’s bankrupting us, and until we crack that nut, no system will work.”
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Impose tighter regulations on health insurers
Vermont regulates health insurers, in part, through its Green Mountain Care Board, created by the state’s legislature in 2011.
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The state also regulates insurance companies by requiring consumers to purchase plans on the state-run exchange. California does not have such a system in place.
“You can’t buy insurance in Vermont right now, as an individual, without going through the exchange,” Shumlin said. “What that allowed me to do is have my insurance regulators push out anyone who was in the market to…cherry-pick the easy lives, the cheap lives, the safe lives, the young lives, the healthy lives and leave everybody else behind.”
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“You’ve got to get the regulatory system up and running to move this from the private sector to government having the ability to say ‘no,’ whether it’s CEO salaries or what you’re paying pharma,” Shumlin said.
Improve the Affordable Care Act
Shumlin acknowledged that restructuring the state’s health care system with state and federal financing would require federal cooperation, including approval of waivers.
“You need a federal partner,” Shumlin said, but California should “start work toward a fairer system now… We worked with the Obama administration to get the first waiver in America… that allows us currently to take Medicaid, Medicare, private pay – the entire system – and move it to an outcomes-based payment system from fee-for-service. That’s an incredibly difficult thing to do.”
He recommended that California assume it will get nothing in Washington for the next three years, setting up for a new president that would be willing to work with the state.
In the meantime, he said the state should add funding to current subsidies that help Californians pay for health coverage. California lawmakers could also expand Medi-Cal to cover all undocumented people, as well as open it to the wider public for a state-run insurance option.
“Enrich the program, don’t give up on it,” Shumlin said. “The reason people are complaining about it is because it’s not adequate. So do everything you can to make it whole.”
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