Critical Analysis of SB 770

An analysis of SB 770, a multi-payer, anti-single-payer bill

The term, “Unified Health Care Financing” is used 15 times, including the title of the bill. “Single-payer” is mentioned once after “including among other options”:

Assembly Committee on Appropriations Analysis:

SB 770 is NOT a single-payer bill. Instead of actual single-payer policy, it proposes that California hold more discussions and more study of the waiver process, via an unelected “Workgroup” of appointees of the Governor, Assembly Speaker, and Senate President Pro Tem. Not only would this duplicate work already accomplished by the Healthy California for All Commission, work which took 2 1⁄2 years and was completed only last year in 2022, SB 770 would do this duplicative work in the dark, without the public hearings the prior Commission held, and with unaccountable political appointees.

SB 770 is NOT a single-payer bill. In fact, SB 770 contravenes federal statute on the consolidated waiver process that permits states to roll federal funds into a state single-payer trust fund. The Affordable Care Act’s Section 1332 “State Innovation Waiver” is clear that states cannot conduct any lawfully actionable negotiations with or apply for consolidated waivers from the federal government without first enacting actual health care legislation, such as state-level single-payer. Section 1332 even requires that a copy of the enacted health care legislation be attached to the waiver application. (There are waivers other than Section 1332, but 1332 is the only one that is comprehensive enough to cover single-payer reform.)

Watch Single-Payer CalCare advocates being gaslit by proponents of multi-payer, “Unified Financing” in the CA Committee on Health last year: HERE

Paragraph 1000.h of SB 770 also states that “discussions with the federal government” will be “regarding the terms of a potential waiver…” That is absurd. Waivers are exemptions from laws to fulfill specific policy. They are not “potential.” One can’t have waiver discussions “to effectuate the creation of a health care system,” as SB 770 proposes. One has waiver discussions with the federal government to seek exemptions to specific provisions in enacted legislation.

Since SB 770 fulfills none of the Section 1332 requirements while proposing fruitless discussions with federal authorities, one has to ask what would SB 770 actually do if it passes?

SB 770 sets up a reporting timeline that would provide cover for legislators to say they can’t vote for single-payer CalCare in May 2024 (when the successor bill to the placeholder AB 1690 must pass out of the Assembly to advance) because they have to wait for SB 770-mandated reporting about waivers due by June 1, 2024 or possibly as late as 2028.

If SB 770 passes, it will go into effect on January 1, 2024. SB 770 says: “The Secretary shall provide quarterly reports to the chairs of the Assembly and Senate Health Committees that detail the status and outcomes of federal discussions, as well as the progress of the Waiver Development Workgroup.” So we’ll see a total of one quarterly report (for the first quarter of 2024) plus a final report by June 1, 2024? Or will the California Health and Human Services Secretary seek an extension because the Workgroup could take more than the allotted six months to deliver quarterly reports? Recall that the Healthy California for All Commission whose work SB 770 seeks to duplicate took 2 1⁄2 years. It is a naive assessment of how power works in the legislature to believe that opponents of CalCare will not point to the undelivered results of SB 770’s Workgroup as an excuse for voting against CalCare in May 2024. SB 770 provides legislators a ready excuse to delay acting on CalCare.

Even the Healthy California for All Commission admits that each year of delay in implementing a single- payer system results in 4,000 or more deaths and $50 billion in medical costs for our state. How can a bill that provides cover for such monstrous delay ever be “complementary” to CalCare?

SB 770 contains slippery loophole language to preserve and possibly accelerate insurance companies profiteering off health care in California. The bill does not propose to enact a single-payer system, but instead identifies the system it wishes to set up as a “Unified Health Care Financing System” – as per the

Healthy California for All Commission definition of “unified financing,” which the Legislative Counsel describes as “including, but not limited to, a single-payer financing system.” “Unified financing” opens the door to California adopting the public option, or a publicly financed but privately administered system with for-profit HMOs or ACOs along the lines of the current Medicare Advantage privatization scheme against Medicare.

Not only have the sponsors of SB 770 argued for the inclusion of just such “reform” to include loopholes for HMO insurance like Kaiser, but the language in the bill bears these potentialities out.

For example, section 1001.e calls for the “elimination of the adverse impacts of insurers” (1001.e) rather than the elimination of insurers – which is what true single-payer would do. And verbiage such as “cost- effectiveness by pooling patients together and leveraging their purchasing power to negotiate the best prices from providers” (1000.k) echoes what ACOs claim they do.

In section 1001.d: “The elimination of the distinctions that currently exist among the disparate systems of Medicare, Medi-Cal, employer-sponsored insurance, and individual market coverage to the greatest extent possible.” This does not definitively eliminate distinctions and leaves the door open for tiers of care.

And in 1001.f: “absence of cost for essential services” is not the same as eliminating out-of-pocket costs for all treatment.

1001.l: “Greater” freedom is not “complete” freedom to choose. “Greater” leaves room for continuation of networks which are removed in CalCare.

And while SB 770 is silent on the Section 1332 consolidated waiver that is necessary to implement state single-payer, the bill seems more interested in Medicare and Medi-Cal waivers that are not necessary to implement single-payer in California. States have recourse to administrative workarounds to use Medicare and Medicaid funds without rolling them into a state single-payer trust fund.

This therefore begs the question: If the Medicare and Medi-Cal waiver discussions SB 770 calls for fail because there is no single-payer bill, will this “failure” be used to mislead single-payer advocates in California and other states into believing state single-payer is a lost cause if their states can’t obtain Medicare and Medicaid waivers?

Or is SB 770’s emphasis on non-essential waivers for state single-payer setting the stage for its “Workgroup” to eventually recommend an incrementalist, multi-payer program for California, such as an HMO/ACO system or the public option? Multi-payer “reform” would maintain, perhaps even accelerate, the current system of fragmented and tiered health insurance whose outcome has been the deadly medical apartheid that afflicts California – where poorer, Blacker, browner, and more rural communities are condemned to lack of care.

An HMO/ACO system especially would enable insurance companies to extract enormous profit from siphoning taxpayer money and resources away from actual health care. One need only look at the estimated overpayment of $100+ billion in the last 13 years to insurance companies under Medicare Advantage, an ACO system, compared to traditional Medicare. Or the billions in public money the federal government has charged that the largest insurance companies have defrauded by gaming the fragmentation and complexity of Medicare Advantage.

Any bill that sets the stage for California to codify multi-payer insurance company profit-making as SB 770 does is not only NOT single-payer, it is ANTI-single-payer. That is why Yes on CalCare means No on SB 770.

See more regarding SB 770 and “Unified Financing” of private insurer interests on the Health Care for Us website: