California Legislature Advances Bill to Socialize Healthcare Prices

The California State Assembly’s Health Committee passed a labor-backed bill on a strict 11-4 partisan vote last week under which the state would create a commission to socialize the price of all healthcare service costs.

The “Health Care Price Relief Act,” titled AB 3087, is sponsored by Ash Kalra (D-San Jose), a fast-rising star in progressive California Democrat circles. The legislation would create the “California Health Care Cost, Quality, and Equity Commission” as an independent state agency to control in-state healthcare costs and set the amounts accepted as payment by health plans, hospitals, physicians, physician groups, and other healthcare providers in the commercial market.

The bill is opposed by the California Hospital Association (CHA), including Providence St. Joseph Health and all of its faith-based ministries. They call the legislation a poorly constructed measure that would take billions of dollars out of the state’s healthcare system while doing nothing to improve the quality of patient care in California. The CHA is especially leery of allowing a government-run price setting scheme.

The state’s powerful labor union consortium backs the bill, including the Service Employees’ International Union; California Labor Federation; Health Access and UNITE HERE; and the California Labor Federation, representing 1,200 unions with more than 2.1 million members.

Executive Secretary-Treasurer and Chief Officer of the California Labor Federation Art Pulaski testified in the Assembly Health Committee that the cost of health care is too much for union members because most of their wage increases go to pay for health insurance.

Pulaski sounded like a conservative when he thundered that union members are paying more for health care to get less. But rather than unions joining the effort to dump Obamacare, they are blaming insurance companies, doctors, and hospitals.

The AB-3087 commission would set provider payment rates in the commercial insurance market based on a number of factors that would be tied to discounted Medicare rates. The advocates claim that the commission would make healthcare cost pricing more rational, more transparent, and more reflective of what it costs to provide medical services.

But Carmela Coyle, president and CEO of the CHA, says the bill is a recipe for disaster. CHA estimates the bill would make 60 percent of California hospitals unprofitable by slashing $18 billion of annual revenue. The CHA estimates 175,000 healthcare workers could lose their jobs.

AB 3087 was advanced on May 3 to the Assembly Committee on Appropriations.