January 25, 2018
To: Interested Parties
From: Eric Jaye, Villaraigosa for Governor
Re: SB562 and Single Payer Healthcare
At the recent Empowerment Congress debate at the University of Southern California, Lt. Governor Gavin Newsom was finally pinned down on his support for SB562, the $400 billion single-payer healthcare plan.
Newsom’s support of SB562 now clarifies the healthcare debate in the contest for governor. Since all of the Democratic candidates support the concept of single-payer healthcare, the difference is not on the principle of universal healthcare – but on the costs and details of SB562.
Newsom’s plan would dramatically increase both sales taxes and gross receipts taxes, end Medicare as we know it and eliminate effective union and employer-based healthcare plans like Kaiser.
Former Los Angeles Mayor Antonio Villaraigosa opposes SB562, saying his top priorities as governor will be to protect, then expand, the Affordable Care Act (ACA) and grow middle-class jobs so more Californians have decent wages and quality healthcare benefits. According to the Public Policy Institute of California (PPIC), under the ACA, the percentage of uninsured Californians plummeted to 7 percent in 2016 from 17 percent prior to implementation of the ACA in 2014.
During the legislative hearings on SB562, the state’s legislative analyst concluded the bill would require $400 billion in spending to implement. Of that, the analyst estimated $200 billion in existing federal, state and healthcare spending could be re-directed and that $200 billion in new taxpayer funding would be required.
Villaraigosa has pointed out that redirecting federal funds is both unlikely, and unsound policy. It would require President Donald Trump and the Republican-controlled Congress to grant a waiver to California. It would also strip Medicare patients of their current coverage, automatically enrolling them into a new, state-run plan without any details about the plan’s coverage.
“Seniors have earned the right to Medicare as we know it. We should start the discussion withprotecting this effective single-payer system, not with the Newsomcare plan to demolish it,” said Villaraigosa.
“What is also missing from this debate is the fundamental principle that expanding the middle class expands healthcare coverage because it brings more Californians into jobs with decent benefits and allows more Californians to afford quality care,” said Villaraigosa.
Of all the candidates for governor, Villaraigosa has the strongest track record on extending health care to Californians. He wrote the legislation for The Healthy Families Program, which he passed as Speaker of the California State Assembly and helped extend health care to nearly 750,000 previously uninsured children. The San Francisco healthcare program Newsom cites as a model never enrolled more than 54,348 people and as of 2016, only had 14,404 active participants.
Newsom has not said how he will pay the additional $200 billion cost of SB562. For reference, the total state budget in 2017 was $183 billion, meaning that SB562 would require more than doubling state taxes and making deep cuts to other important state services.
At a debate sponsored by the San Francisco Chronicle at the City Club in San Francisco, Newsom refused to answer the question of how he would pay for single payer – seeming to propose the absurd notion that the plan would pay for itself through healthcare savings. Rather than answer the question, he said at the time he preferred to “reframe” the question.
He cites the example of Healthy San Francisco, which he says, “required no general tax increases.” That carefully worded statement hides the fact that the program required a massive increase in city spending and direct taxes on local businesses. These levies are routinely passed on to consumers in the form of an “SF Mandate” charge of 4% on typical restaurant and other bills.
Villaraigosa has said, “The Republican tax plan is already a massive tax increase for millions of Californians. This is not the time to double our state taxes.”
While the sponsors of SB562 admitted that their proposal was incomplete when passed by the State Senate, the decision of Assembly Speaker Anthony Rendon to hold up the bill for hearings in the Assembly caused proponents to accuse the Speaker of “stabbing California in the back.” Rendon was even the subject of death threats after he questioned the missing details of how to finance the bill.
According to the Sacramento Bee, “Absolutely nothing has happened with the bill,” Rendon said last week. “The sponsors of the bill have sat on their hands and done nothing for the past six months. None of the authors have made any significant amendments. We’re looking for all the same things in 562 that we were looking for six months ago.”
“I believe healthcare is a right – not a privilege,” said Villaraigosa. “I’ve supported universal, quality healthcare and single payer my entire life, but we shouldn’t start by dismantling Medicare – and misleading the public with a bill that proposes a massive change in how we provide healthcare without any details of what coverage would look like and without any realistic way to pay for it.”
“Pie in the sky will not put food on our table. SB562 will not give us universal quality healthcare.”