Lots of folks have heard about the State of California threatening to secede from the Union. Personally, I don’t think there’d be that many people sorry to see them go. Recently, the California State Senate passed a universal healthcare bill; actually, to be more direct about, the Golden State Senate approved authorization to keep talking about it. The stated goal was to phase out all other insurance – – – private insurance, government insurance and even Medicare – – – so California could cover everyone. Legislators joyfully announced the notion was “Medicare for all,” which of course ignored the fact it wasn’t Medicare at all. Senators Ricardo Lara and Toni Atkins sponsored the bill without having a clue as to just what it would cost taxpayers. Lara, Chairman of the Senate Appropriations Committee, finally determined it might cost $400 billion annually. The entire budget for the State of California is $290 billion; the federal government provides $107 billion of that.
Not to worry says Senator Lara, as he estimates Californians spend $367 billion on healthcare currently, which would include all private money, federal and state dollars. Lara’s bill would co-opt that money and he says there’d be no patient co-pays or deductibles. It just so happens Lara is running to be California’s State Insurance Commissioner, an elected position in that west coast utopia. Another coincidence is the Lara bill’s loudest and most enthusiastic supporters is the California Nurses’ Association. The nurses paid for a special study, which estimated the cost of the Lara bill to be a paltry $331 billion, a bargain at the price to be sure. One more coincidence is the Nurses’ Association is strongly supporting Ricardo Lara for Insurance Commissioner.
Even the most optimistic outcome would require a tax increase on the order of $100 billion and nobody seems to have a clue just where that money might come from. The nurses have helpfully suggested the legislature adopt a $15% payroll tax, as well as raising sales taxes and increasing taxes on business.
Not surprisingly, the bill was passed by Democrats voting for it and every single Republican in the State Senate voting against it. Four Democrats did have the guts to vote against it. Nor did logic play a part in its enactment, especially with people who define compassion as the number of people enrolled in a government program. One senator wondered, “We give Trump crap day in and day out, and we’re going to beg him for a couple hundred billion dollars?”
One University of Massachusetts economist claims the figures cited by those supporting the Lara bill as being wrong. “California’s analysts erred by understating health care cost savings and failing to subtract current health care spending from their projected payroll tax increase,” Gerald Freidman said. Professor Freidman did say he believed ultimately single payer healthcare would “save the public and business money via cutting bureaucratic costs and negotiating for drugs.” Of course Freidman offered no explanation just how businesses would save money if it was taxed more to pay for the new system through a 2.3% gross receipts tax; not to mention just how red tape would be eliminated by replacing the red tape bureaucracies of insurances companies with that of government bureaucracy.
Obviously, California has gone from creative accounting to no accounting.
I hear Barack Obama’s words echoing in my head that we could keep our doctors and that premiums would go down significantly under Obamacare. And let us not forget some insurance premiums went up 125% last year.
Even supporters of the bill say they realize it would take years for California to develop a technology information system able to track all enrollees, as well as medical providers and processing payments.
How long did it take for the Obamacare website to work? Does anyone remember?
If you think Californians are under taxed presently, consider a three bedroom, two bath craftsman home for sale in north Los Angeles. The price tag is $939,000 and the property taxes are $5,238 with the property assessment on less than half the house’s value. The legislature also passed this pie-in-the-sky proposal after Governor Jerry Brown, no mossback conservative, warning California’s deficit was back. When Governor Brown revealed his budget recommendation for the state, he estimated California would have a $1.6 billion deficit by this summer and summer is here. In something of an understatement, Governor Brown said, “The trajectory of revenue growth is declining.” One of the primary reasons Brown’s economic advisors had lowered the expectations on projected revenue was the slower than expected growth in wages. Imagine that!
Last, but not least, California is $400 billion in debt, largely due to unfunded liabilities for public pensions and retiree health care. In perhaps yet another show of compassion, California set aside $74 billion it doesn’t have for health and dental benefits to state employees and retired workers. “These liabilities are so massive that it is tempting to ignore them. We can’t possibly pay them off in a year or two or even ten,” Jerry Brown said. “And there is little satisfaction in the notion of chipping away at an obligation for three decades to pay for something that has already been promised. Yet, it is our moral obligation to do so – – – particularly before we make new commitments.”
Evidently, the legislators either didn’t listen or didn’t care and have sailed off proposing to spend an amount equal to the present debt. Clearly, California is a bailout waiting to happen. Of course, nobody has speculated on who will bailout the United States of America.
For those indulging in the fantasy California will secede, get over it. It’s like the dependent adult child in the basement threatening to move out if he or she can’t have what he or she wants at any given time. They can’t afford it.