Fiscal Projection Overview. We estimated the revenues and costs of the [single-payer plan] for 5.5 years.. Our estimate indicates that that the SPP would result in a net shortfall of $42 billion in 2011-12 (the first full year of operations) and $46 billion in 2015-16.
Wow. Single-payer in California will cost the state $42 billion in its first year, this is much different than the analysis done five years ago by The Lewin Group where the program rolled out as cost neutral. What happened and is it the death knell of single-payer in California?
What happened is simple and it has nothing to do with single-payer costing more to operate.
Over half is due to the fact that California has faced another five years of outrageous health care inflation, and that alone has raised the baseline by over $20 billion.
Almost half (40 percent) is due to use of more recent wage data indicating that payroll tax revenue would be less because wages are comparatively lower than previously modeled.
Different assumptions used by the Legislative Analyst account for most of the remaining shortfall - a very modest amount.
This $42 billion shortfall is not a reason to turn away from single payer, but rather it confirms that single payer reform is even more urgent. Health care inflation is killing us, and it must be harnessed immediately. The financial burdens of wage earners are killing them (sometimes literally), and they must have immediate relief from the financial hardships caused by
their health care needs.
In short, medical care now costs the state an extra $20 Billion a year because nothing was done to contain it. Another $16 Billion a year in the shortfall is due to low wages in California which means the state will bring in LESS in income tax.
This does not mean that single-payer is more expensive, it means that IT STILL PERFORMS in a cost-neutral way, but that the economy has tanked and that people have less money for health care.
The LAO report confirms that single payer provides the financing structure that we need, and enacting it has become an emergency.
If you are in North Carolina you can fight for Universal Health Care by: