Understanding the Healthy California Act, SB 562 (Lara/Atkins)

The Healthy California Act, Senate Bill 562, authored by Senators Ricardo Lara – Bell Gardens and Toni Atkins – San Diego, proposes a publicly financed, but privately delivered healthcare plan for everyone in California. There will be hearings, committee votes and amendments this year in the California Senate, and then consideration by the Assembly in 2018. I encourage you to become familiar with this bill (Google SB 562 Lara). It is 36 pages, and understandable (mostly). After all, it is legislation.

SB 562 will replace private insurance plans that cover benefits contained in SB 562. Private insurers may write policies covering cosmetic surgery, private rooms not warranted by medical condition, etc. The California administered plan will fold in all the publicly funded programs as well.

The benefit package will be comprehensive, including dental, hearing, vision, mental health, addiction treatment, translation services, case management and coordination, adult day care and many others.

Funding will be simple and fair. More than half the funds needed are already raised through existing taxes at the Federal and State level to pay for Medicare, Medi-Cal, public health services, and public clinics in California. Those Funds would go into the Healthy California Trust Fund. The U.S. Dept. of Health and Human Services will need to issue waivers for that to occur.

The balance of the funds needed to finance care are already being paid by Californians via premiums that workers, non-workers and businesses pay to private insurers, by money paid out of pocket for co-pays, deductibles, dental and vision and other uncovered services. That money would be collected “…based on his or her ability to pay and funded by broad-based revenue”.

That means: no more rationing of healthcare based on income; everyone and every business pays a fair share; no more interruption of care with job loss; no more outlandish premiums for those over 50 or in the individual insurance market; no more delaying treatment because of lack of funds; no more choosing between food and medicine; no more bankruptcy due to medical debt.

As the results of the fiscal analysis of SB 562 will not be available until summer, the funding language in SB 562 is necessarily vague. However, historically, multiple analyses have been done in states and nationally.

All of them show dramatic savings that lower the cost for every person (except the top 2%) and every business now paying insurance premiums for workers. Savings in administrative costs will cover expanding the benefit package and eliminating the share of cost.

All licensed healthcare providers and hospitals can participate, including plans such as Kaiser Permanente.

Physicians can participate in groups or individually. Patients choose their own GP’s and specialists, but must have a designated coordinator (a clinically recognized strategy to improve patient care) who the patient chooses. Patients do not need permission from their coordinator to see any eligible provider.

There will be a nine member appointed Healthy California Board, an independent public entity not affiliated with any other state agency or department, to set policy and otherwise govern the system. There will also be a large public advisory board representing 15 stakeholder areas such as health practitioners, labor, small and large business and four patients.

Healthy California, through various strategies and analyses, will reduce the inflation rate of healthcare costs. Providers of care will negotiate with Healthy California, just as they now have to do with private insurers. Healthy California will also develop a mechanism to negotiate drug prices.

Planning for the future, Healthy California will study long term nursing care and the medical component of Workers Compensation with the goal of eventual inclusion of those benefits.

(Peter Conn 4-18-17)