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June 16, 2008

LAO Confirms California Single Payer Reduces Health Care Spending

This is my fifth essay for 2008. I interrupt my presentations on the current budget crisis to report on a confidential analysis of SB 840, my legislation creating a single payer health insurance system in California, requested by anonymous members of the Assembly [the requesters’ names are not revealed, as a matter of course, by the Legislative Analyst’s Office (LAO)] and conducted, in the middle of their budget analyses, by the California Legislative Analyst’s Office. My first 2008 essay was an update on the 2007 “year of California health reform”. The second set out some background information on actions taken by the legislature to re-balance the 2007-2008 budget given shrinking revenues. The third reviewed the Governor’s budget as he presented it in January of this year. This essay will analyze the LAO review of a single payer system for California.

Why the Legislative Analyst Looked at SB 840:

The LAO, in addition to their yearly on-going analysis of state spending and the budget, receives requests from members of the Legislature to look at the fiscal impacts on the state of various legislative measures. You may recall that during the discussion of the omnibus health measure put forward by the Governor and then-Speaker Fabian Nunez, Senate President pro-temps Don Perata asked the Legislative Analyst’s Office to report on the potential impact of the bill on State finances. In so doing, the LAO took into account a proposed funding initiative the Governor had submitted for the next ballot go-round which, if adopted by the people, would have set out a plan to fund the measure to be put on the ballot later in the year.

The LAO’s report was presented to the Senate Health Committee and the programmatic bill did not pass the Committee. The funding mechanism was not in front of the Committee and did not go on the ballot.

Following the defeat of that California insurance bill, three members asked the LAO to analyze SB 840, not only for its impact on State spending (which was found to be favorable), but also for the larger issues raised in funding the new program.

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Posted by healthinsurance at June 16, 2008 09:36 PM

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