California's Proposed Single Payer Health System: Unlimited Demand Does Not Result In Unlimited Supply

Hank  Adler
|
Posted: Jun 03, 2017 12:01 AM
California's Proposed Single Payer Health System:  Unlimited Demand Does Not Result In Unlimited Supply

California's state Senate is seriously considering a single payer health system.

Putting the state of California in charge of healthcare for 40 million people could result in the greatest medical disaster since the black plague in the 1300's. How good a job does California do today with its current responsibilities? California: that is the state that admits to underfunded government workers pension and healthcare funds of almost $400 billion (probably understated by hundreds of billions of dollars), that is the state that is building a multi-billion dollar train to nowhere, that is the state that cannot maintain its water reservoirs or provide remotely reasonable service at the Department of Motor Vehicles.

The California Senate wants to create a governance structure almost identical to the University of California system to implement and operate a single payer healthcare system. The UC system has only recently been accused of hiding hundreds of millions of dollars in a slush fund and wining and dining the supposed overseers of the system, the University of California Board of Regents.

The California state Senate wants to provide free, absolutely free, medical services to all residents of California, legal or otherwise. In an effort to out Obamacare Obamacare, California would define its free medical services to include: acupuncture, chiropractic, podiatry, dental, vision, skilled nursing care and equally unlimited mental health care.

Without any deductible or any form of cost sharing, all medical services would be completely free to the user. Of course, there is literally no plan to increase the supply of services for this deluge of individuals seeking care. Understand that insurance co-pays place a high level of discipline on the patient. Without a co-pay or any other costs, there is no reason not to seek that Friday afternoon acupuncture and massage or to cancel that medical appointment at the last minute to go shopping;  demand would outstrip supply in a matter of hours. Unlimited demand does not result in unlimited supply. Unlimited demand can only result in rationing and corruption.

In former President Obama's famous quote about Obamacare, he talked about keeping your doctor and keeping your insurance. In the California plan, if a California resident likes his/her employer health insurance, it is lost. If a California resident likes his/her Medicare plan (with or without Medicare Advantage), it is lost. If a California resident likes his/her union sponsored healthcare program, it is lost. If a California resident already has a fully paid, for life, health insurance plan, as many resident have, it is lost.

It would be literally illegal to sell healthcare service plans or offer healthcare benefits to anyone in California.

If one thinks about all of the money that they have paid into Medicare and now they will be asked to pay new taxes to have a single payer healthcare system, one wonders if there is literally anyone who is or is nearing retirement who could possibly think this is a good idea.

The California state Senate plan requires the state of California to reinvent virtually every element of healthcare delivery. The plan is essentially accompanied by no operating or financial implementation plan. (Note that every individual currently working in the healthcare insurance field in California would lose their job.)

In true California fashion, the plan offered by the California Senate provides not a word on how to fund the program or increase supply. All that is known is (1) that the federal government would have to provide California with 100% of the money it is currently spending on Medicare and Medicaid and (2) all other tax revenues would have to be doubled to fund the projected costs. (The estimates of projected costs are unlikely to come close to the ultimate costs of a free healthcare system.)

No other problems with free healthcare except that the top 1 percent of California's taxpayers already pay almost 50 percent of California income taxes. Each time one of them leaves and they will leave if taxes are doubled and access to healthcare becomes limited as it must, everyone else will need to pay even higher taxes.

Who would be hurt by free single payer healthcare? Probably everyone in the state of California who currently has medical insurance. Who would win? The winners would be those without healthcare insurance. If the California Senate wants to be honest about their real goals and objectives, let them propose a tax increase to provide healthcare to those without legally mandated healthcare insurance.

If California has totally free medical care, there is not enough money on the planet to pay for such care. When there is unlimited demand, there can never be sufficient supply to meet that demand.