Socialized Health Care Back From Grave

JAN. 19, 2012


Like a bad horror movie in which the monster dies only to come back from the grave, socialized medicine has once again reared its ugly head in California. Not content to wait for Obamacare to kick in, state Sen. Mark Leno, D-San Francisco, has introduced SB 810. It’s a reincarnation of SB 840, a government-run health-care bill authored by Sheila Kuehl that was vetoed in 2008 by then-Gov. Arnold Schwarzenegger.

“According to the Legislative Analyst’s Office, the bill is estimated to cost $210 billion in its first full year of implementation and cause annual shortfalls of $42 billion,” said Schwarzenegger in his veto message. “To place this in proper perspective, our state budget deficit this year started at $24.3 billion.”

The fiscal hemorrhaging from SB 810, which is likely to be looked on more favorably by Gov. Jerry Brown, could be worse, perhaps $250 billion annually, according to the bill’s analysis. Startup costs could be in the hundreds of thousands to millions of dollars. Additional costs would result from the transition to a health care system run by state bureaucrats, including the implementation of a claims payment system, electronic medical records, labor market disruptions, reduced tax revenue and job loss from insurance companies.

Where’s the money going to come from? “Since no revenue source is currently identified, it would be pressure on the state General Fund,” the analysis states. That’s the same General Fund that has been running multi-billion dollar deficits for much of the past decade and which is on track for another $9.2 billion shortfall in the next fiscal year.

“There would be ongoing General Fund pressure in the millions to billions of dollars, because this bill would provide that the General Fund would be responsible for providing loans to the Healthcare Fund in the event of a shortfall or the delayed passage of the state’s annual Budget Act,” the SB 810 analysis states. “This bill would also permit the [health] Commissioner to use reserves and to borrow funds in such a situation and to take cost control measures.”

It would likely result in tax increases. The funding mechanism for Kuehl’s bill would have imposed a 12 percent tax on employers and employees along with another 11.5 percent in unspecified taxes.


If you thought the health care system was already bureaucratic, convoluted and confusing, wait until Sacramento takes over. A California Healthcare Agency would be formed along with the Healthcare Policy Board, the Office of Patient Advocacy, the Office of Health Planning, the Office of Health Care Quality, the Healthcare Fund, the Public Advisory Committee, the Payments Board, and the Partnerships for Health.

Few would argue that the current system is not in need of improvement.

Leno pointed out at the Jan. 17 Senate Appropriations Committee meeting that health care premiums have risen five times faster than the inflation rate since 2002. As a result, more employers are cutting back or dropping employee coverage. Employees are picking up more of the costs of premiums along with higher deductibles and co-pays. In the past year, 12 million Californians went without health insurance.

In 1960, the United States spent 5 percent of its gross domestic product on health care. That increased to 11 percent by 2000. Not it’s 17.6 percent of GDP, according to Leno. Without significant reform, the projections are that by 2015 we will be spending 20 percent of GDP on health care. Next: 25 percent by 2025 and 50 percent by 2060.

Leno said the World Health Organization ranks the United States 37th among nations in health care, despite Americans paying twice per capita than higher-rated countries with government-run health care. “So there is money in the system,” he said. “It’s just being wasted on both administrative and clinical waste. That’s what we’re purchasing: bureaucracy and waste instead of health care provision.”

He said costs can be cut through bulk purchasing of medicine and medical equipment. And he dismisses the concern about the impact on the General Fund budget, saying, “This is not a new $200 billion cost to the state of California. It’s the current $200 billion we are spending inefficiently on health care put into a new health plan that will be much more efficient, create greater results, keep Californians healthier and saving us billions of dollars.”

Leftist Support

California’s leftist organizations turned out in such large numbers that it took 17 minutes for all of them to come to the microphone and state their names and affiliations. In comparison, the opposition to the government takeover of a $200 billion industry was paltry.

Mark Burgat, representing the California Chamber of Commerce, said the Chamber disagrees that government systems are more efficient than private businesses, and that a single-payer system would be less costly than the current private system. But he provided no facts to back that up. He also warned about deficits in the tens of billions of dollars annually.

But he said the chamber supports Obamacare: “We believe the federal program is a program that is workable and we are working towards that end. We think that the state and the businesses in the state should focus on that. Trying to implement a California-only one-payer system is simply counter-productive.”

Also supporting Obamacare while opposing Lenocare is Nick Louizos, representing the California Association of Health Plans, who said, “Our industry is appropriately focused on implementing this [Obamacare] law and making it work. We believe the debate around SB 810 is counter-productive to those efforts. And, whether or not the funding is addressed in this bill or some future legislation, the cost of single-payer, as mentioned previously, is massive.”

Small Businesses Snuffed Out

The strongest argument against SB 810 was made by Ken DeVore, representing the National Federation of Independent Business.

“Right now small businesses in California are just struggling to survive,” he said. “Many of them can’t afford health care insurance for themselves, let alone for their employees. This could be the last thing that would drive them out of business, out of state. A study [on Kuehl’s bill] said that it would cost nearly a quarter million jobs in California if it was implemented with the imposition of all of these new costs on businesses. With 2.2 million unemployed in California right now, we just can’t afford something like this at this point in time with an economy that is still faltering.”

Several committee members spoke in favor of the bill; none spoke against it. But due to the need to further analyze the cost impacts on the General Fund, Chairwoman Christine Kehoe, D-San Diego, ushered it into the suspense file with an agreement to vote on the bill today (Thursday, Jan. 19).

Like its predecessor, SB 810 is likely to pass the Legislature and reach the governor’s desk. Leno is optimistic that Brown will sign it, noting that the governor pushed a government-run health plan when he ran for president in 1992. “In the brief conversations I had with him when he was a candidate [for governor in 2010], he does want to sit down, look at the numbers and understand it more clearly that it is, of course, affordable for California,” said Leno.


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  1. CalWatchdog
    CalWatchdog Author 19 January, 2012, 08:45

    If this passes, I’m outta here. No way I’ll put up with Sovietized medicine run by Jerry Brown and Mark Leno.

    — John Seiler

    Reply this comment
  2. Bob
    Bob 19 January, 2012, 09:14

    Where will you go?

    Maybe it’s finally time to secede.

    The state of Seilerville’s time has come!

    Reply this comment
  3. Bob
    Bob 19 January, 2012, 09:17

    They will pass it this year and worry about the funding next year.

    And you know the answer to every problem from DemoNcrats is yet another tax increase.

    Mark my words. This year the DemoNcrats will get their two-thirds majority in the legislature and next year they will be able to raise taxes as much as they want.

    Reply this comment
  4. GoneWithTheWind
    GoneWithTheWind 19 January, 2012, 09:18

    It’s not as though they are going to give free health care to illegal aliens. What’s another $210 billion more or less? It’s only fair that we continue to support those who are keeping a trillion dollar illegal drug cartel in business.

    Reply this comment
  5. Beelzebub
    Beelzebub 19 January, 2012, 10:42

    Our medical delivery system as it stands today in America is financially insolvent. We spend 18% of our GDP on health care and about 35 million Americans go uninsured. The euros provide health care for their entire populations and spend only 9%-11% of GDP. As our population ages – the percent of GDP will only go higher – until it destroys the entire economy. But that’s what happens when 80 years olds are guaranteed their hip transplants and heart bypasses or when Juanita can come across the border illegally in her 7th month after poor prenatal care – and drop a $2M special needs kid in an American hospital compliments of the California taxpayer. Do any of you know that we pay triple or quadruple the price for American made phramaceuticals than the europeans pay for the same product??? The American pharma companies entered into a pact with their bought-off lawmakers on Capital Hill – that makes it illegal to reimport originally packaged American made pharma products back into the USA. So the American pharma companies force YOU to subsidize the rest of the free world when it comes to prescription medicine. And mandated health insurance is more government-corporate collusion by forcing you to buy medical insurance from private companies – which will provide the insurance companies with an ADDITIONAL $80 billion in revenue annually. Corruption, waste and fraud destroyed your healthcare system.

    Reply this comment
  6. Beelzebub
    Beelzebub 19 January, 2012, 11:04

    I challenge you. Go talk to any maternity ward nurse at UCI Med Center, Western Med Center, Garden Grove Med Center, Anaheim Memorial, Fountain Valley Reg Hospital, etc… and ask her what percentage of the new moms are non-english speakers. Don’t be surprised when you are told 50% or more. Other nations simply refuse allow this nonsense. Not only do we provide them with cost-free medical care – after they give birth we allow them to remain in our country – and we provide them with food and shelter on the taxpayer’s dime. And you are surprised when we spend 18% of our GDP on healthcare???

    Reply this comment
  7. queeg
    queeg 19 January, 2012, 12:53

    Relax everyone…the Dems are setting up the social, cultural and economic collapse of California.

    There are no ways to prosperity with the bullet train drain or the open quarry pit of socialized horrors/medicine.

    Reply this comment
  8. Bob
    Bob 19 January, 2012, 22:09

    ‘Corruption, waste and fraud destroyed your healthcare system.’

    Yup, Mr. Bub. And science has been completely corrupted. Medical research is not about curing disease, reversing the damage done from disease or even preventing disease.

    It’s all about getting and keeping the grant money flowing and doing what is politically expedient.

    This is one reason why will never see any cures to the major diseases in our lifetimes, or any disease for that matter.

    But really, that’s what the elites want. If you consider that they believe the planet’s population should be a tenth or less of what it is then it is highly unlikely that they want to see people living to 150.

    Reply this comment
  9. Barb
    Barb 20 January, 2012, 07:14

    Aside from the costs, because individuals and employers would be penalized, isnt this the same problem Obamacare has e.g. a mandate and wouldnt this be challenged in the courts?

    Reply this comment
  10. doug
    doug 20 January, 2012, 09:51

    Even if stem cell research was able to eliminate all the diseases, the govt would be right there to make sure our premiums were “at market prices”.

    Reply this comment
  11. Pam McDonald
    Pam McDonald 20 January, 2012, 19:01

    Healthcare premiums have been rising drastically since Obamacare was passed. The reason for this rise in premiums is Obamacare has no cap or controls on the insurance industry’s premium rates, just like they fail to address tort reform. After 2016 (full implementation), the insurance company giants who have become participants in the “insurance exchange” will not be able to raise their premiums, while providing healthcare for millions more with no stipulations or adjustments for people coming into the system with costly chronic illness such as diabetes (which is epidemic). So, they raise their premiums now while there are no regulations preventing them from doing so. This is detrimental to the budget of a small business, forcing them to either lay off employees, or stop offering healthcare benefits. The astronomical rise in the cost of healthcare they speak of controlling incorporates the cost of the hundreds of thousands of illegals and people on the entitlement programs. It is strangling the economic viability of hospitals and healthcare providers. Hospitals in California are mandated to treat anyone who walks through their emergency room doors seeking care, and they have been overwhelmed and continue to be so.

    Having been employed in the healthcare system in Sacaramento for 42 years, now a medical business administrator/consultant, my information is accurate. Further consequences of universal healthcare of any kind is the loss of physicians and heathcare providers who will be, and are now, forced out of practicing medicine because they all are actually small businesses with costlier overhead and unable to survive economically. We will also begin to see the bankruptcies of hospitals as they are now experiencing in Massachusetts. Our legislature is totally out of control, and the insanity they continue to produce is destroying this State. We absolutely need a part-time legislature, or California will not continue to survive.

    Reply this comment
  12. anonymous
    anonymous 21 January, 2012, 16:14

    yeah cause the existing system works so well! We’re #37 (and you like it that way!)

    Reply this comment
  13. ElGato
    ElGato 23 January, 2012, 09:26

    “The funding mechanism for Kuehl’s bill would have imposed a 12 percent tax on employers and employees along with another 11.5 percent in unspecified taxes.” That totals 23.5% in new taxes! Time to move my company to Nevada.

    Reply this comment

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