Single-Payer: How to Turn California into Cuba

Liberal legislature weighs government health care, even though it would bankrupt broke state

by Ramin Oskoui, MD | Updated 25 May 2017 at 11:28 AM

Just imagine if someone said: I have no desire to control the American automobile industry, or tell people what kind of car to drive, I only want to simplify life for the American people, and make driving safer and fairer, by having a single, government-controlled car dealership for the whole country, with every new or used car, bought or sold — and likely serviced as well — by that single dealership. And under my plan, everyone will drive a good, safe, fun car!

We haven’t gotten there yet for cars — and the experiments in the Soviet Union, Cuba, and Venezuela are not very encouraging. But the dream of American socialists, progressives, and many Democrats is to do the same thing for health care — to nationalize or socialize the huge segment of the economy now occupied by the medical and nursing professions, hospitals and clinics, the pharmaceutical industry, medical device manufacturers, and health insurers.

The seemingly innocuous term they use for this is “single payer,” as if all they were seeking was to reorganize the health insurance industry — an industry that is probably about as popular as car dealers. But in a country where the vast majority of medical expenses are paid by insurance, control over the health insurance industry means control over the whole system.

It’s no different than if we continued to have scores of car manufacturers and theoretically independent repair shops, but only a single, national, government-owned dealership that had to buy or sell, or approve the servicing of, every new and used car in the country. He who pays the piper calls the tune.

Even if liberals and Democrats succeed in ensuring that nothing is changed in Obamacare, they still wouldn’t yet have the progressive and socialist dream of single payer for the vast majority of us who get our health care through private insurance. We would have it with the VA, for veterans, and we would have it in some areas for those accessing the individual market (now that Obamacare has virtually eliminated that market in many areas of the country). How’s that working out for you?

The response to those failures is usually that they haven’t been tried long enough, or widely enough, to give them a chance to succeed. Margaret Thatcher had a phrase for that — “The only problem with socialism is that you eventually run out of other peoples’ money.”

But Californians can’t wait for socialism to fail economically — as it always has and presumably always will — or to succeed politically on a national level — which seems unlikely in the near future. They are designing their own single-payer system for their own singular state.

The leading bill put forward, SB562, would eliminate traditional insurance companies and guarantee coverage for everyone. The state would contract with health providers and pay the bills for all residents, much as the federal government covers seniors through Medicare.

Medicare isn't that bad, from the patient's perspective. The problem with Medicare, of course, is that it is completely insolvent and unsustainable, with the taxes and premiums paid covering only about a third or less of the actual costs, and the remainder borrowed from the Chinese and shifted to future generations. Eventually, even though it only covers the elderly, it will go bankrupt, the same way Bernie Madoff's ponzi scheme ran out of new investors to fleece.

Given that financial pedigree, how does California figure it will make single payer work for the entire California population? Indeed, presumably the "single payer" will pay for anyone who immigrates there, legally or illegally, from Mexico or New Mexico, showing up with a heart condition and asking for medical care. After all, who could imagine California denying health care to immigrants?

A study by the State Senate's appropriations committee found that a proposed single-payer system would cost $400 billion a year — more than twice the state's current bloated budget of $182 billion. How will it be paid for? According to the Sacramento Bee, half or $200 billion would come in the form of a new tax of about 15 percent on all earned income. That's in addition to the 13 percent-plus state income tax already levied on Californians, and their federal income and Social Security taxes.

Unfortunately, that would still leave another half — another $200 billion to find somewhere else. Very likely they will go after employers for that, but presumably they would only be able to impose new taxes on California employers. Those who move to Texas or Rhode Island would be safe. It will be interesting to see the effect that has on jobs. California has already lost millions of residents and thousands of businesses because of its excessive taxation and onerous regulations, even without taking on health care as a government responsibility.

Taxes can’t be raised high enough to pay for such a system. And regulations — such as requiring a minimum salary for every job — cannot be enforced without driving businesses out of state or into bankruptcy. Economic reality does not respect their utopian delusions. But don't take my word for it. By all means, let's encourage California to try it. And anyone who is anticipating high bills can vacation there, or move there for a few years.

It won't be long before such "medical tourism" stops, most likely because very few doctors will remain in the state. But that's okay. If California goes bankrupt a few years earlier than it otherwise would, as its citizens enjoy the same lovely climate and health care enjoyed in Venezuela, it might give the rest of us a few more years to learn from their failures and use the market system to help bring down health care costs for the rest of the country. Every time socialism has been tried, it has failed. That's okay, as long as California can keep its failures to itself.

Dr. Ramin Oskoui, a cardiologist in the Washington, D.C., area, is CEO of Foxhall Cardiology PC and a senior health care adviser to LifeZette.

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  12. PoliZette
  13. single payer
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