The left desperately wants universal health care, but they just cannot seem to figure out how to make it work.  Obamacare was originally envisioned as a public option system, according to the 2008 campaign website of the former president.  Bernie Sanders wants a single-payer system, or “Medicare for All.”  So far, nothing besides subsidies for private policies on exchanges in addition to expanded Medicaid coverage has stuck at the federal level, so the Democratic Party has been forced to turn to friendly statehouses.

DAN INGRAM

Both Hawaii and Massachusetts have implemented strict rules for private insurance, with the latter serving as the starting point for Obamacare’s structure.  However, neither state has

been able to achieve real universal health care, though both places come closer than most to a 0% uninsured rate, according to the Kaiser Family Foundation.  Oregon tried and failed to start a serious discussion about single-payer in 2010.  Then in 2014, Vermont came closer than any other state to an actual single-payer system until the governor admitted defeat after staring down a $4.3 billion price tag.  To put this into perspective, the entire state budget of Vermont was only $4.9 billion at the time.  There was just no way to make it work.

 

Vermont is a small state in both the geographic and population sense of the word.  With fewer wealthy individuals or highly profitable companies to tax, it is no surprise that single-payer crashed and burned in the dark blue mountains that Bernie Sanders calls home.  California, on the other hand, has no shortage of wealthy citizens and companies to tax.  Perhaps single-payer will fare better there?  Last week, the state Senate crossed the first hurdle to begin this reboot of the experiment, according to The Mercury News.  The Healthy California Act now heads to the California Assembly.

While many supporters argue that the plan will help to create savings through lowered drug pricing and administrative overhead reduction, this single-payer legislation will nonetheless be extremely pricey.  The California Senate committee charged with estimating the cost admits that the tab could be as big as $200 billion.  This amount is in comparison to the existing total state budget of only $122 billion.  Of course, California is also notorious for underestimating the cost of their progressive utopian projects.  Originally slated to run $40 billion, the high-speed rail project linking Southern California to San Francisco is now estimated to cost $64 billion to complete, and years behind schedule, to boot.  How to pay for what may very well become a tripling of the entire state budget?  Quite simple, according to the committee: with an additional 15% payroll tax.

California is free to try their hand at this experiment, and conservatives and libertarians (at least, the ones who live outside their borders) should be happy and wish them the best of luck.  After all, when each state is free to pursue what its citizens decide is best for themselves, within the limits of the U.S. Constitution, that is when the country is at its finest.  Mandating things at the federal level is a recipe for tyranny and lost liberty, so even when a liberal state embraces a progressive agenda, as long as it is not forced on others, that should be celebrated.

However, (and this is a big “however”), the Californian bill contains a particularly disturbing line which calls into question whether this is even constitutional or not:

This bill would prohibit health care service plans and health insurers from offering health benefits or covering any service for which coverage is offered to individuals under the program.

This prohibition would, in essence, destroy the entire existing heath care market in California.  No company would be legally allowed to compete with the California plan when it came to standard benefits – the only policies you would be able to buy on the private marketplace would be those which would cover procedures outside of mainstream care.  Everyone would be automatically taxed to support the state-run plan, with no option to opt out.

By eliminating the possibility of private competition, the California bill goes too far.  The Healthy California Act will almost certainly never see the light of day and will die a slow death due to insurmountable cost estimates, just like the Vermont bill.  However, the reason conservative legislators should cite as the basis for their opposition is the appalling breach of liberty contained within the text.  The mandatory tax, coverage, and payout amounts alongside the prohibition for any private competition reeks of big government run amok.

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Dan Ingram

Business Correspondent at LibertyNation.com

Dan is a freelance writer specializing in finance, economics, and tax policy. He is a U.S. Army veteran and holds an MBA in Information Technology Management.He resides in New England with his wife and young son.

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