Could single-payer be the future of healthcare in California?

Governor Jerry Brown presented his proposed budget for 2011-2012, today. It includes $12.5 billion in cuts.

If Brown’s proposal is accepted, Medi-Cal and Cal-Works would take the biggest hits, each losing $1.5 billion. Higher education would lose a billion dollars, though funding for K-12 education would stay level, as would funding for public safety.

Brown also called for a five-year extension of tax hikes – a move that would require voter approval. Californians rejected a similar measure just two years ago.

The state continues to suffer through a struggling economy, yet heath care costs are on the rise. Late last week, Blue Shield of California, a not-for-profit health plan based in San Francisco, announced that close to 200,000 of its policyholders will see an average increase of 30-35% in their premiums as a result of three separate rate hikes from October of last year to March of this year. The news comes just as backers of a single-payer healthcare plan for California began a campaign to put pressure on lawmakers in Sacramento.

KALW’s Erica Mu has the story.

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ERICA MU: Monday mornings at the Ashby BART station in Berkeley usually feature commuters catching trains into San Francisco and other destinations. But this morning, many people were in the parking lot, catching buses to Sacramento.

CLAUDETTE HOWERTON: I’m here today to embark on a bus with four other buses and a bunch of people that have been campaigning for a long time for single payer.

Claudette Howerton joined more than a hundred Bay Area residents who traveled to a rally at the state capitol. They joined over 500 health professional students for their annual lobby day and rally. On the agenda…

HOWERTON: Single payer.

Howerton is referring to the single-payer healthcare model, which would effectively eliminate the health insurance industry by consolidating thousands of different health insurance plans into a single system run by the state government. It’s not a new idea – the California Universal Healthcare Act was proposed twice before and even passed through the Legislature in 2006 and 2008. However, it was vetoed both times by Republican Governor Schwarzenegger.

The bill was proposed again last year, but then strategically held on the Assembly Floor by leaders of the Democratic party on the last day of the 2010 legislative session, because Governor Schwarzenegger said that he would veto it a third time.

GOVERNOR ARNOLD SCHWARZENEGGER: We believe very strongly that we want to do it through the private sector, not a government-run bureaucracy, and creating another big bureaucracy.

“Big bureaucracy” or no, with Democrat Jerry Brown in the governor’s seat, things could be different this year.

SENATOR MARK LENO: We know that when Jerry Brown ran for President of the United States in 1992, part of his platform was Single-Payer Universal Healthcare Reform for the entire nation, so he's very familiar with it.

That’s Democratic Senator Mark Leno, the sponsor and author of last year’s single-payer bill.

SENATOR LENO: … it is not as Arnold Schwarzenegger said in his most recent veto message, "socialized medicine." It is a public-private partnership, publicly-funded, privately-provided healthcare. So your doctor doesn't change, your clinic, your hospitals do not change. What changes is who pays for it.

The timing could be right, this time around. His bill is being introduced at a time when insurance fees are skyrocketing.

NPR’S ALL THINGS CONSIDERED: Blue Shield of California has told about 200,000 individual policyholders that their rates will go up on March 1^st as much as 59%.

The proposed increases sent a lot of policyholders complaining to California’s new insurance commissioner, Dave Jones, who was sworn in last Monday.

INSURANCE COMMISSIONER DAVE JONES: I've requested that Blue Shield delay implementation of the premium hikes 60 days, but they're not required to agree to a delay. That's entirely up to them.

Last year, Anthem Blue Cross sought a 39% rate hike and upon closer examination by the state insurance commission, Jones says, the company was found to have committed a series of math errors in its application. The company ended up resubmitting the rate hikes at a lower rate.

COMMISSIONER JONES: So I'd like the opportunity to closely examine the rate filing in this case to make sure that it's in conformance with the new federal law that requires 80% of the healthcare premium dollar to go into healthcare and to make sure it's otherwise in conformity with California law.

A written statement released by Blue Shield’s Chief Operating Officer Paul Markovich on Friday claims that in spite of the fee increases, the company still stands to lose $20 to $30 million this year. And, the statement claims, the company is on target to meet the federal requirement to contribute 80% of its revenue to medical expenses.

While talks between Blue Shield and the insurance commission continue, Commissioner Jones is pushing to pass legislation that would give him the power to prevent excessive premium increases – a power he currently does not have.

COMMISSIONER JONES: I announced at my inauguration that I'm going to be returning to work with the Legislature to try to get that authority because that is an authority that I believe most Californians believe and expect the insurance commissioner to have, but I don't have currently.

Back at the Ashby BART station in Berkeley, single-payer advocate Eleanor Clarke wishes Commissioner Jones had the power to limit rate hikes.

ELEANOR CLARKE: I have California Blue Shield, I have private insurance, and now they have just raised, said they were going to raise rates this year by 50.5%, and I am now paying $2,800 a month for private insurance with a $1,500 deductible. I can’t do it anymore.

If Clarke were unable to afford health insurance, she would become part of another problem. California is currently home to 7 million uninsured people – that’s the largest number of uninsured in any single state.

In Berkeley, I’m Erica Mu for Crosscurrents.

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