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  HEALTH CARE REFORM

About the LAO Report on Single Payer Health Care System

On May 22, 2008, in response to a request from several legislators, the Legislative Analyst’s Office (LAO) issued a report on cost and funding issues for a single payer health care system for California. PDF File.  Click to download Adobe Acrobat Reader.

Read Senator Kuehl’s response.

The following main points may be used to respond to questions posed about the LAO report:

  • The LAO did not actually assess SB 840. The LAO was asked to assess whether the funding mechanism, developed for the 2005 Lewin Group study to fund the system in 2006, would still fund the single payer proposal if it were implemented in 2011 -- after five years of skyrocketing health care costs.

  • Unsurprisingly, the LAO found that following five years of health care cost inflation the specific revenue formulas used in 2006 will no longer work in 2011 and will have to be higher. However, whatever revenues are necessary to fund a single payer health care system in the year it is enacted, the cost to Californians will be less than the premiums they will be paying at that time.

  • The LAO report CONFIRMS that SB 840 would save billions of dollars in administrative spending and other efficiencies and that it would considerably contain the growth of health care spending. In fact, the LAO report specifically wrote that the Lewin Group's assessments, which found that the predecessor bill to SB 840 would have been fully funded in 2006, were reasonable. The projected deficit largely represents the cost to the state of California created by the Governor's veto of universal health care in 2006.

  • The LAO report illustrated precisely what Senator Kuehl has long been saying: current health care spending is plenty of money to pay for universal health care, in whatever year single payer is enacted.

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