State Sen. Ricardo Lara, D-Bell Gardens, is renewing his push to reform health care in California, this time proposing new legislation to cover illegal immigrants’ health care.

“Two years ago we passed #Health4All children in California & now the Senate is fighting to cover our seniors in the CA budget. #Health4AllElders is the answer to every child who asked: What about my grandfather? What about my abuela? They deserve to age with dignity and security,” Lara tweeted to promote the bill.

While Lara originally intended to have the bill cover all undocumented immigrants, the bill was reportedly amended in the Senate appropriations process. It now covers minors up to 19 and undocumented adults 65 years and older. 

Currently, most illegal immigrants in the state rely on emergency rooms for care – a reality that drives up health care costs for everyone in the state, supporters of the bill argue.

Lara, who’s currently running for insurance commissioner in Tuesday’s primary, has taken several steps in defiance of the Trump agenda, putting himself at the center of the so-called “resistance” – like his failed efforts to pass a universal health care bill last year.

More broadly, it comes at a time of rising health care costs in the Golden State, with about 60 percent of the state’s uninsured being those here illegally.

“It has been 32 years since Congress last passed comprehensive immigration reform for those already living in the U.S., and their failure should not fall on our elders’ shoulders,” Lara added in a press release. “Dysfunction in Washington and Trump’s constant attacks on immigrants should not distract California from doing the right thing and extend health care to those who have given so much to our state.”

And in the Assembly, a similar bill has passed. Introduced by Democratic State Assemblyman Dr. Joaquin Arambula, that legislation expands the Medi-Cal program to cover undocumented young adults up to age 26.

“The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions,” Assembly Bill 2965 reads. “The federal Medicaid program prohibits payment to a state for medical assistance furnished to an alien who is not lawfully admitted for permanent residence or otherwise permanently residing in the United States under color of law.”

Offering such coverage would cost the state around $3 billion next year, according to California’s Legislative Analyst’s Office.

However, the bill comes with the risk of heavy political blowback, with Republicans in the state already energized in opposition to California’s sanctuary state law and the gas tax heading into the November elections.

“It’s another freebie given by an out-of-control Legislature,” GOP gubernatorial candidate John Cox recently said on Fox News about the policy. “We’re a compassionate society but there’s a limit on what we can afford to do.”

Under the legislative proposal, the state would create an independent agency that would set prices for the health care market – prices that would be based off the current pricing structure for Medicare.

However, there would be a process for hospitals to appeal and argue that certain procedures require a higher rate.

“By building upon existing models, we can establish a transparent process by which increases in health care costs can be kept reasonable while also expanding access to care,” Kalra said at a Monday press conference.

Proponents of Assembly Bill 3087, including major labor groups, argue that it would help control rising health care costs and give consumers more predictability in assessing health care pricing, while opponents, like doctors and hospitals, maintain that it risks decreasing the quality of care and would cause physicians to leave the state.

“No state in America has ever attempted such an unproven policy of inflexible, government-managed price caps across every health care service,” said California Medical Association President Theodore M. Mazer said in a statement. “It threatens to reverse the historic gains for health coverage and access made in California since the passage of the Affordable Care Act.”

California spends about $8,000 per capita on health care every year, totaling around $300 billion, according to the California Health Care Foundation, and it’s a cost that is affecting everything from the state budget, business’s bottom lines and employee paychecks.

“Medical monopolies are the only ones who benefit from skyrocketing prices; the rest of us are paying the price because we have no choice,” Roxanne Sanchez, President of SEIU Local 1021 and SEIU California, said in a statement supporting the bill posted on care4allca.org.

But the overarching concern is that state officials would be making decisions on behalf of patients – raising concerns about rationing, a lower quality of care and longer wait times.

Additionally, the proposal is also being opposed by progressives in support of single-payer, seeing the legislation as just making a dent in a larger problem that needs complete overhaul.

More broadly, it’s just the latest effort to overhaul the Golden State’s health care system. Last March, state Sen. Ricardo Lara, D-Bell Gardens, introduced a bill to create a single-payer model, but the plan stalled in Sacramento after there were few details laid out on how to pay for the “Medicare for all” system.

SACRAMENTO – Assembly Speaker Anthony Rendon, D-Paramount, an avowed supporter of single-payer health care, nevertheless announced last week that he was pulling the plug on a Senate-passed measure that would create such a system in California.

Rendon, who is holding the bill in committee, was only the proximate cause of AB562’s death. Its fate was sealed after a Senate floor analysis last month pinned its likely cost at $400 billion – more than three times the state’s entire general-fund budget.

“It didn’t make any sense,” Rendon recently told the Sacramento Bee. “It just didn’t seem like public policy as much as it seemed a statement of principles. I hope the Senate takes this chance to take the bill more seriously than they did before.”

According to its bill language, the Healthy California Act would “provide comprehensive universal single-payer health care coverage and a health care cost control system for the benefit of all residents of the state.” The measure would have tossed out California’s myriad systems of private, insurance-backed and government-funded health care and replaced it with a single, government-managed system run by a newly created state agency.

Such a massive change would demand volumes of detailed legislative language, yet the bill itself was remarkably brief and lacking in specifics. It even failed to include any explanation for how it would receive the necessary waivers from the federal government.

The Appropriations Committee analysis concluded the bill would lead to “increased utilization of health care services,” given that all residents would be free to “see any willing provider, to receive any service deemed medically appropriate by a licensed provider, and the lack of cost sharing, in combination, would make it difficult for the program to make use of utilization management tools such as drug formularies, prior authorization requirements, or other utilization management tools.” So all financial bets were off, given an expected – and probably massive – hike in demand.

To fund the $400 billion program, the Appropriations Committee concluded the state would have to raise about $200 billion in new tax revenues. That would mean a new 15 percent payroll tax, with no cap on the wages subject to the tax. Shifting any of those costs from taxpayers to enrollees would be impossible under provisions that prohibit “members from Healthy California from being required to pay any premium” or “from being required to pay any co-payment, co-insurance, deductible and any other form of cost-sharing for all covered benefits.” 

State officials often argue about programs that spend millions of dollars, but had a surprisingly short debate about one that would cost hundreds of billions of dollars. One reason that might be is that Gov. Jerry Brown already had expressed deep skepticism about the measure. “This is called ‘the unknown by means of the more unknown,’” he told reporters in March. It was unlikely he would have signed it, especially given his concern about creating new spending programs. Critics argue that the governor’s public views gave Democrats a free pass to vote for it and assuage their political base while knowing it was unlikely to become law. Rendon’s comments to the Bee certainly give ammunition to those who saw the bill as a half-baked “statement” bill.

Support and opposition fell along predictable and partisan lines. Liberal interest groups, unions and Democratic politicians typically supported the bill, while conservative groups, taxpayer organizations and Republicans opposed it. Some groups expressed views similar to Rendon’s – supporting the single-payer concept but expressing concern about specifics.

The latter, cautious point of view won the day. After all, the bill raised more questions than it answered. It’s unclear how the new system would work or how the new government agency would operate. There are questions about the effects a 15 percent payroll tax would on the economy and jobs creation and about the magnet effect if California created an unlimited, valuable new benefit available to anyone who simply lives in the state. There are questions about federal waivers and how the California system would intersect with federal programs. And that’s just for starters.

Instead of trying to answer those questions thoroughly, the bill’s backers did as Rendon suggested – introduced a measure that stated some principles and goals, but didn’t really explain how the state government might fund them. Given the debate the health care issue sparked at the latest state Democratic Party convention and on the floor of the Legislature, it’s clear that the single-payer issue will be around or a while, regardless of the fate of this particular bill.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

SACRAMENTO – During the California Democratic Party convention in Sacramento last weekend, the spiciest news was outgoing chairman John Burton dropping an f-bomb on a group of activists demanding that the party embrace a single-payer health system. It’s not really news when the notoriously foul-mouthed Burton says such things, but the fracas highlighted the pressure party leadership faces to embrace government-run medical care.

Yet the foulest rebuke to advocates for single payer this week did not take place at the convention. It took place nearby at the state Capitol, in the form of an appropriations committee report that found that a single-payer bill working its way through the state Senate would cost more than double the state’s total budget.

Senate Bill 562, which had previously passed the Senate health committee, was placed in the “suspense file” by the appropriations committee on Monday as legislators analyze the huge price tag. They have until the end of the week to move it out of the file, or it will die this year.

The committee made clear the size of the undertaking: “The fiscal estimates below are subject to enormous uncertainty,” it explained. “Completely rebuilding the California health care system from a multi-payer system into a single payer, fee-for-service system would be an unprecedented change in a large health care market.”

The appropriations analysts estimate an annual cost of $400 billion a year, which soars above the projected $180 billion state budget. Of that cost, the committee explained, about half of it would be covered by existing federal, state and local health care funding. That leaves a $200-billion hole, which the committee says could be covered by a 15 percent payroll tax. Even if the calculation includes reduced health care spending by employers and employees, the committee still estimates a $50-billion to $100-billion shortfall.

And, quite significantly, these costs could be understated given the kind of demand that would be created by this system. Its main advocates, Sens. Ricardo Lara, D-Bell Gardens, and Toni Atkins, D-San Diego, view health care as a “human right,” so the system the bill would create would provide nearly unlimited access to medical care. In fact, the Senate health committee report opined that “SB562 will change health care in California from commodity to a right.”

“Under the bill, enrollee access to services would be largely unconstrained by utilization management tools commonly used by health care payers, including Medi-Cal,” according to the committee report. “The ability for enrollees to see any willing provider, to receive any service deemed medically appropriate by a licensed provider, and the lack of cost sharing, in combination, would make it difficult for the program to make use of utilization management tools … . Therefore, it is very likely that there would be increased utilization of health care services under this bill.”

And the committee only is talking about predicted costs. It’s not its job to engage other policy debates, such as those touching on subjects including rationing, waiting lists for services if the demand overwhelms supply and the quality of care. The bill would apply to illegal immigrants, which raise critics’ concerns about the state becoming a worldwide magnet for “free” health care.

The bill is fairly short given the complexity of the subject. But the Mercury News captured the gist of the single-payer approach in a March news article: “Instead of buying health insurance and paying for premiums, residents pay higher taxes. And those taxes are then used to fund the insurance plan — in the same way Medicare taxes are used to provide insurance for Americans 65 and over.”

This bill would put control of health care in the state under the authority of a nine-member panel and essentially eliminate the role of insurance companies – thus replacing them with a government bureaucracy. But the size of the tax bill and state costs even have Democratic Gov. Jerry Brown expressing what the newspaper calls “deep skepticism.”

The analysis makes some other important points. For instance, it’s not clear that the federal government would go along with this, and it is totally discretionary whether the feds would grant the necessary waivers involving Medicare and Medicaid services. The bill’s funding is based heavily on the ability to divert federal funds from those programs.

The analysis also notes, “There are several provisions of the state constitution that would prevent the Legislature from creating the single-payer system envisioned in the bill without voter approval.” In Colorado this past November, voters defeated a single-payer initiative, Amendment 69, with an overwhelming 79 percent to 21 percent “no” vote.

Supporters of the measure claim that it will reduce “waste” by putting all health plans under a single umbrella, thus ending the duplication of multi-plan systems. But critics note that competition is the best way to keep costs low – not putting a system under one giant governmental entity. Advocates see it as a way to ensure proper health care for everyone, but the appropriations report confirms critics’ concerns that such a system could obliterate the state budget and kill job-creating private enterprise because of the high tax bite.

As the Democratic Party protests illustrated, we can expect the debate to become even more acrimonious and obscenity laden as the days go on.

Steven Greenhut is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

Will progressive lawmakers challenge Gov. Jerry Brown over his decision to dash their big dreams for the 2017-18 fiscal year? Or will they acquiesce as they mostly have in recent months of May after Brown released revised budgets without money for new or expanded government programs?

Despite the pleas of Assembly Speaker Anthony Rendon, D-Paramount, and Senate President Kevin de Leon, D-Los Angeles, that he take a break from his usual frugality, the governor’s revised 2017-18 $124 billion general fund budget released last week is far more concerned about helping public schools and beefing up the state’s rainy-day fund than any new liberal cause.

With a month until the June 15 deadline to adopt a state budget, that means Democratic lawmakers – especially those from liberal districts in the Bay Area and Los Angeles County – have a big decision to make: Do they accept a wipeout? Or do they put pressure on Brown by sending him bills popular with Trump-agitated grass-roots Democrats and making him veto them?

This is the dynamic created by the fact that Democratic legislative leaders entered the current session in January with ambitious hopes for bold new programs making college much cheaper, expanding state affordable housing efforts and providing health care for all.

Ambitious legislation not taken seriously

The governor doesn’t even think the ideas are worth discussing.

Brown’s budget rejects the basics of Assembly Bill 1356, by Assemblywoman Susan Talamantes Eggman, D-Stockton, which would have added a 1 percent surtax on California families earning $1 million or more to cover the cost of fees and tuition for in-state students at the University of California, California State University and the California Community College system. The governor also dismissed without comment Assembly Democrats’ push to help cover basic living expenses for 350,000-plus UC and CSU students from families which make less than $150,000 a year.

Brown’s budget makes no mention of SB562, a bill by Sens. Ricardo Lara, D-Bell Gardens, and Toni Atkins, D-San Diego, that would create a government-run single-payer health care system. It’s won some early committee victories, despite not having a fiscal analysis that explains how or who will pay for the program.

And a push supported by dozens of Democratic lawmakers to impose a fee on real-estate transactions to provide a steady stream of hundreds of millions of dollars in annual funding for subsidized affordable housing projects was flatly rejected by Brown as inadequate to addressing California’s housing crisis.

At a Thursday press conference, the governor said, “I don’t think we should throw money at the housing problem if we don’t adopt real changes that make housing production more efficient and less costly. We’ve got to do that first.”

For nearly two years, the governor has pushed for laws reforming the California Environmental Quality Act to give builders fewer obstacles to constructing new housing units. But legislative Democrats have heeded their union, trial lawyer and environmental allies who say CEQA shouldn’t be weakened.

Brown and top Democratic lawmakers pulled off a big win last month on an issue they agreed on: the urgent need to improve California’s decaying infrastructure, both for quality-of-life reasons and to help the economy by reducing the drag on the economy caused by bad, clogged roads. They pushed through gas tax hikes to pay for a 10-year, $52 billion infrastructure improvement and repair initiative.

But Brown’s pragmatism about government spending has been the calling card of his second stint as governor. Given his high approval ratings, the governor seems unlikely to believe he needs to make concessions if Democratic lawmakers send him spending bills he doesn’t like.

The saga of Gov. Jerry Brown’s budgetary labors has taken an unexpected twist, potentially triggering an all-but-forgotten provision designed to funnel money back to taxpayers. 

In 1979, taxpayer advocate Paul Gann spearheaded a ballot measure designed to place a curb on Sacramento spending by requiring rebates at a certain level of state spending. “Subsequent voter-approved changes to the limit have made it a fiscal afterthought for the past quarter-century,” as the Sacramento Bee noted. “Yet a recent report by the nonpartisan Legislative Analyst’s Office contained breaking news in the complex world of government budgets: Brown’s January proposed budget wrongly excludes $22 billion from total spending subject to the limit, and after accounting for the money, state government is as close as it’s been in decades to exceeding the threshold.

“The report creates the prospect of upended spending priorities or even the first taxpayer rebates in 30 years. And if lawmakers stick with the governor’s methodology, the state would be ‘highly vulnerable’ to a lawsuit, in the analyst’s view.”

Entangled budgets

State Sen. Ricardo Lara, D-Bell Gardens, has introduced a bill to overhaul California’s health care system to create a single-payer model, the latest example of the Golden State bucking the Trump agenda and taking a “go it alone” approach.

The Healthy California Act would create a universal health care system – including covering residents who are in the country illegally. It’s a measure in response to the looming repeal of the Affordable Care Act in Congress. Since the ACAs passing, California has embraced Obamacare despite continued concerns over access to affordable care.

“We have reached a pivotal moment where there’s a threat to health care,” Lara said. “I felt it was important that we create a different narrative here in California.”

This isn’t the first time such legislation has come into focus, as then-Gov. Arnold Schwarzenegger vetoed a single-payer bill back in 2006.

Critics of a “Medicare for all” system cite heavy costs associated with an overhaul, as health care expenditures in California totaled $367.5 billion in 2016, making it the state’s largest industry. Furthermore, with undocumented immigrants being covered, those costs would substantially increase. As the Los Angeles Times explained, employees and their employers would face increased taxes and those revenues would be combined with the funds used for Medicare and Medicaid.

While at this point specifics appear light, it’s important to note that California currently relies on about $22 billion in federal funding every year to cover insurance subsidies.

More broadly, it’s the latest example of California waging a fight against the Trump administration. The state has already stoked high-profile battles to defend so-called “sanctuary city” policies, with major cities like Los Angeles and San Francisco vowing to continue to defy federal law by not cooperating with immigration authorities.

A recently published Rasmussen poll found that 41 percent of Republicans say America won’t be hurt if California became a separate country – and given its solo approach in the Trump era, it may already feel that way to those between the coasts.

Drew Gregory Lynch is a CalWatchdog contributor

@_drewgregory

Time to work toward 100 percent renewables?

Good morning! TGIF. It’s inauguration Day. So, in honor of the festivities, whether you’re watching in adoration of the incoming president, in morbid curiosity, or just plain ol’ hate watching, we’ll keep it short this morning.  

• Environment: “It’s time to talk 100% renewable energy, California Senate leader says,” writes the Los Angeles Times. 

• NFL: “The Oakland Raiders have made good on a threat that loomed over hometown fans for months, filing paperwork Thursday to move the National Football League team to Las Vegas.” SF Gate has more. 

• Trump: “Scientists in California have named a newly discovered moth species after President-elect Donald Trump, saying the white and yellow scales on the insect’s head are reminiscent of Trump’s blond hairdo.” Capital Public Radio/AP have more. 

• Pensions: “San Diego county and city pension funds have nearly $7 billion less in the bank than they need to cover benefits already earned by current and former employees, a deficit that’s risen 90 percent in just two years, new reports show.” Voice of San Diego has more.

• Obamacare politics: “Democratic legislators took their pro-Obamacare message on the road Thursday, convening a hearing in Bakersfield to examine the repercussions of repealing the Affordable Care Act. The state Senate health committee pointedly held its hearing in the Central Valley — far afield form the state Capitol and the home districts of most members in attendance, but the home turf of key Republican members of California’s congressional delegation including House GOP leader Kevin McCarthy.” The Los Angeles Times has more. 

Legislature:

• Gone till Monday. 

Gov. Brown:

• No public events announced. 

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New follower: @JonathanArambel

CA sales tax dips, tax burden rises

Good morning! It’s Friday. Let’s get down to business. 

“Four years ago, voters approved Proposition 30, which raised the income tax significantly on the wealthiest Californians and raised the sales tax a tiny bit on everyone,” Capital Public Radio recently recalled. “That quarter-of-a-cent increase equated to paying an additional $0.01 on a $4 coffee; $1 on a $400 television; and $100 on a $40,000 car.” 

But on Election Day 2016, that changed. “Voters extended Proposition 30’s income tax increases in [November’s] presidential election with Proposition 55 — but that initiative allowed the Prop. 30 sales tax hike to expire.”

The shift means California’s sales tax is the state’s only tax to be decreased this year, from 7.5 percent to 7.25 percent.

As the U-T reported, “Some local jurisdictions tack on their own assessments, so residents in certain areas will still pay more than the statewide rate.” In certain parts of the state, like the San Francisco Bay Area, voters allowed substantial increases. 

CalWatchdog has more. 

In other news:

• Health Care: “As Washington grapples with health care policy again, the head of the 185,000-member National Nurses United is turning her attention to a seemingly unlikely advocate for a single-payer system. ‘The one I’m counting on the most is Trump,’ RoseAnn DeMoro said. DeMoro, who serves as executive director of both the Oakland-based National Nurses United and the California Nurses Association, told POLITICO California on Thursday that she is ‘disgusted’ with Democrats like House Minority Leader Nancy Pelosi and believes that the president-elect may actually get action.” Politico has more. 

• Minimum wage: “San Diego is cracking down on several restaurants that city officials say are adding surcharges in misleading and illegal ways to help cover increased labor costs from the minimum wage hike that took effect Jan. 1.” The San Diego Union-Tribune has more. 

• Budget: “But recent events in California and the nation suggest the fiscal proposal Brown unveils next week could be his most circumspect to date, even after voters in November approved billions of dollars in additional taxes,” reports the Los Angeles Times. 

• Obamacare: “House Majority Leader Kevin McCarthy has written to Gov. Jerry Brown and the leaders of other states soliciting their input for replacing Obamacare.” The Sacramento Bee has more. 

Legislature:

• Back on Monday. 

Gov. Brown:

• On vacation in Hawaii until Sunday, according to The Sacramento Bee. 

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New follower: @hilljobs

A small fence separates densely populated Tijuana, Mexico, right, from the United States in the Border Patrol’s San Diego Sector.

The face of immigration in California has become more complex than the political debate would suggest, with Roma, or gypsies, coming to the state in small but significantly increased numbers. The trend hearkens back to the old days of the controversy in the U.S., when Europeans fleeing adverse conditions at home sparked divisions over how many, and how much, to welcome. As Latin American immigration, lawful or not, recedes from its recent peak, current residents have begun to transition into more established roles, leaving openings for more newcomers. 

“This year, almost 1,800 Romanians have been apprehended at the southern U.S. border, up from fewer than 400 in all of last year and just a few dozen in 2008, according to government statistics,” Bloomberg reported. “They are propelled by an anti-immigrant wave sweeping Europe and pushing the Roma across the Atlantic Ocean.”

“The traditionally itinerant group, persecuted for centuries, is facing less-tolerant governments as more than 1 million migrants and refugees from Syria and other countries overwhelm the region. A resurgence of neo-Nazism from Romania to Italy has seen their camps demolished, businesses firebombed, neighborhoods walled off and children beaten.”

Times of transition

Although still vastly outnumbered by migrants and immigrants from Latin America, the number of Europeans seeking refuge in California could swell substantially if the political and cultural outlook in their homelands continues to sour. Syrian immigration, all but an asterisk until the war in that country displaced millions, became a hot-button issue as Californians split on how warily to treat incoming Muslims after the San Bernardino terror attack. “Since October, about 1,060 Syrians have landed in California — largely in San Diego and Sacramento, but also in Los Angeles and Orange County,” noted Southern California Public Radio.

“Even in California with a long history of welcoming immigrants, Gov. Jerry Brown said the state can help maintain America’s traditional role as a place of asylum, but he would work closely with Obama to ensure the Syrians arriving in the state were fully vetted. Brown’s comments came just days after coordinated terrorist attacks in Paris put people on edge and amid the rising rhetorical heat of the presidential campaign.”

Nationwide, shifting patterns of unlawful immigration have echoed developments in California. “Mexico still ranks as the leading source country for unauthorized immigrants, with a population of 5.8 million in the U.S. as of 2014, but it has declined since peaking in 2007,” KPCC observed, citing a new report from the Pew Research Center. “Meanwhile, unauthorized immigration from Asia, sub-Saharan Africa and Central America has been rising. India, for example, accounted for about 130,000 unauthorized immigrants in the U.S. in 2009. By 2014, an estimated 500,000 lived here illegally.” In California, the station added, the unauthorized population “has declined slightly, from an estimated 2.5 million in 2009 to a little more than 2.3 million in 2014, according to the report.”

Pushing benefits

In Sacramento, both lawmakers and Gov. Jerry Brown’s administration have worked to extend a growing list of benefits to undocumented residents once restricted to citizens. “California on Wednesday became the first state to require that undocumented immigrants be told of their right to an attorney before being interviewed by federal immigration authorities while in custody,” as BuzzFeed reported. “The Transparent Review of Unjust Transfers and Holds Act, parts of which goes into effect in 2017, was sign by Gov. Jerry Brown, who called it a ‘measured approach to due process and transparency principles.'”

Health care has become another targeted area on state Democrats’ agenda. Last year, the Los Angeles Times recalled, Brown “allocated funding to allow 170,000 undocumented kids sign up for Medi-Cal at an annual cost of about $143 million. Earlier this month, he signed a bill making California the first state to ask federal officials to allow immigrants here illegally to buy insurance through its state health exchange, without providing them with subsidies.”