California’s Government-Run Healthcare Plan is Bad News

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The shortcomings of government-run healthcare in other countries should be a stern warning in light of the State of California’s new plan.

“All residents of this state have the right to healthcare.”  This is the first sentence of “The Healthy California Act” (SB-562). which passed in the California State Senate on May 26th and received its first reading in the California State Assembly on June 1st.  The socialists on the west coast are becoming bolder in the age of Trump and have decided to take the entire health care industry within the State of California and make it property of the government.   

According the California Appropriations Committee Fiscal Summary of (SB-562), the plan will cost $400 billion per year, which is a dramatic increase in spending considering that the current budget for the entire state is currently about $171 billion annually.  The increase in government outlays to cover the costs associated with provided health care to all Californians requires a new payroll tax of 15% on all employees in the state and transferring funds already committed to other health-care welfare programs into the new entitlement.

The Libertarian Party of California issued a press release upon the passing of the bill.  Unfortunately, the most compelling talking point used by the “Party of Principle” was comparing the service provided with socialized medicine to the service people are accustomed to receiving when dealing with the local DMV.  This tired old analogy does not address the underlying issues being tapped by the Democrats supporting the policy in California.  

The soaring cost of private insurance coupled with the appearance of wealth among the medical community has created class envy across the nation.  The healthcare industry is so far from being market based.  The Democrats are not even attempting blame the free market for the issues.  For the past several decades, governments at the state and federal levels have slowly ramped up regulations.  Americans are now well trained to accept the difficulties of dealing with Medicare, the Affordable Care Act, and medical income tax deductions.

Healthy California is the main group generating “grassroots” support for the measure.  On the website healthycalifornia.org the organization states that, “it’s imperative that California establish a better, truly universal system, which finally gets costs under control.”  Furthermore, the organization’s expressed goal is to, “set the standard for the country by implementing a just and equitable healthcare system.”  

Healthy California claims that socialized healthcare will create lower costs and create equity.  There is an empirical basis of comparison for fact checking these claims.  We don’t even need to leave the North American continent to find Canada with its own socialized health care system since 1984.

Socialized medicine in Canada has mixed results except for the overwhelming support it receives from the citizens of the country.  The Canadian system relies entirely upon transfer payments from young healthy workers in the form of taxes to pay for the medical expenses of the elderly and ill.

However, even in Canada, there is no such thing as 100% coverage.  Approximately 75% of Canadians have some sort or supplemental health insurance to cover things like dentists and prescriptions.  Canada’s system allows us to test the claim which Healthy California makes regarding keeping costs under control.  

TD Bank Financial Group produced a study of the Ontario Province and actually concluded that the socialized medical system in that one province will increase in cost by 80% by the year 2030.  The fact that the cost for each individual is hidden in taxes does not actually mean that socialized medicine is more efficient than free-market methods of allocating health care resources.

Next, the assertion by Healthy California that socialized medicine will create a just and equitable health care system may also be tested by analyzing Canada’s system.  In a 2014 report by the Commonwealth Fund, it was found that Canada ranked last among 11 industrialized nations for timeliness of care.  The horror stories of socialized medicine creating long waiting times for treatment appear to be true.  

However, this pain will not be felt by Californians of wealth because free market private health providers will simply be a car ride away.  That is the rub for the claim that socialized medicine creates equity.  Unless the rich are willing to accept substandard service they will undoubtedly find a way to be treated more swiftly than a constrained socialized medical system allows.  Many Canadians are known to come to the U.S. for timely treatment.

The Venezuelan socialism experiment shows that eventually the economic realities of creating artificially low prices causes scarcity for any product or service.  The Senate of California are pursuing a policy of measurable economic calamity.  Why do progressives insist upon creating artificial market constraints?

Only a return to market based healthcare will produce the types of cost savings claimed by supporters of socialized medicine.  The equity of socialism is not positive.  Whenever the government consumes an industry, suffering is the inevitable outcome.  Economic freedom is a high price to pay at the doctor’s office.

Anson Knowles is the host of the Alabama-based radio program The Anson Knowles Show Live, Local, Liberty Oriented Talk on 92.5FM/770AM WVNN and wvnn.com.

Anson Knowles is a radio show host and libertarian political activist from Huntsville, Alabama. He was a 2014 candidate for the Huntsville, Alabama school board and served formerly as the chairman of the Libertarian Party of Madison County, Alabama. His writing has appeared also on AL.com, and his radio program takes place each Saturday morning.

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