Unified Health Care Financing System - Administration Of Public Health - CA Health And Safety

Section § 1000

The California Legislature recognizes and supports a shift to a unified health care financing system, as recommended by the Healthy California for All Commission. This system would aim to be accessible, affordable, equitable, high-quality, and universal.

The current health care setup is seen as fragmented and inefficient, particularly harming low-income communities and people of color. The proposed single, government-run funding model is expected to save the state over $500 billion in the next decade, while reducing consumer costs and expanding services.

Removing profit motives from health care decisions is a key goal, and achieving this change would position California as a leader in health equity. For this plan to work, federal support and approval are essential. The commission's vision offers a blueprint for enhanced health care at a reduced cost.

The Legislature finds and declares all of the following:

(a) Established by the Governor and the Legislature, the Healthy California for All Commission endorsed a system of unified health care financing that is accessible, affordable, equitable, high quality, and universal.

(b) The commission described the present health care system as one that is fragmented, wasteful, and disproportionately harmful to low-income Californians and communities of color and provided the rationale for a new single, government-administered funding system.

(c) The commission found that a unified financing system would create significant opportunities to deliver health care more effectively, efficiently, and equitably.

(d) California could save more than five hundred billion dollars ($500,000,000,000) over the next decade if a unified health care financing system is implemented, with overall costs lower even after most of those savings go to minimize consumer cost sharing and expand long-term care supports and services to all Californians.

(e) The report by the commission calls for the elimination of corporate profitmaking as the basis of health care decisions.

(f) The magnitude of the change from the status quo in cost savings and positive impact on Californians’ access to health care services that the commission contemplates represents a profound breakthrough in health policy and would establish California as the nation’s leader in pursuing health equity.

(g) Federal engagement is critical to the process of developing the framework for a waiver that would provide program approval and full federal financial participation in a unified health care financing system for California.

(h) The commission’s recommendations for a health care system with unified financing that guarantees all Californians the benefit of a standard, comprehensive package of health care services points the way toward better care at lower cost for our state’s residents.

(i) Based on these findings, the Legislature endorses a health care system with unified financing, such as a single-payer health care system, to provide accessible, affordable, equitable, and high-quality health care for all Californians.

unified health care financing Healthy California for All Commission single-payer health care cost savings health equity federal financial participation government-administered funding equitable health care consumer cost sharing long-term care expansion health care fragmentation corporate profitmaking in health care health policy breakthrough access to health care services

(Added by Stats. 2023, Ch. 412, Sec. 1. (SB 770) Effective January 1, 2024.)

Section § 1001

This law requires the Secretary of the California Health and Human Services Agency to explore creating a new healthcare system in collaboration with the federal government. The system should include a wide range of health services like medical, behavioral, dental, and vision care, and should not change based on age, employment, or any personal characteristics. It aims to eliminate healthcare coverage disparities and ensure fair access for all Californians.

The system should also avoid cost-sharing for essential services, maintain enough reserves for emergencies, and protect health industry jobs that may be affected by changes. It would feature a unified, efficient financing model allowing easier patient access to healthcare providers without worrying about costs. Key goals include improving public health, reducing administrative burdens, and addressing healthcare inequities.

The Secretary of the California Health and Human Services Agency shall research, develop, and pursue discussions of a waiver framework in consultation with the federal government with the objective of creating a health care system that incorporates the following features and objectives:

(a) A comprehensive package of medical, behavioral health, pharmaceutical, dental, and vision benefits, which includes primary, preventive, and wellness care services.

(b) A package of long-term care supports and services, including measures to support health and well-being while Californians age.

(c) Services that will not vary by age, employment status, disability status, income, immigration status, or other characteristics.

(d) The identification of disparities among Medicare, Medi-Cal, employer-sponsored insurance, and individual market coverage, with the goal to eliminate those disparities to the greatest extent possible in the new system.

(e) The elimination of the adverse impacts within the health care system of attempts to avoid covering the sick or providing the benefits patients need.

(f) The absence of cost sharing for essential services and treatments covered under the program, including primary, preventive, and wellness care services.

(g) The establishment of sufficient reserves to guarantee solvency during public health emergencies and times of economic disruption.

(h) A program to implement a just transition for members of the health industry workforce whose jobs may be disrupted.

(i) Assurances that no individual will pay more than a specified percentage of their income on a progressive sliding scale for the cost of financing the health system.

(j) Unified financing that delivers health care more effectively, efficiently, and equitably.

(k) Cost-effectiveness by systemwide pooled purchasing to negotiate rates with providers.

(l) Freedom for patients to choose providers and for primary care providers to choose practice models.

(m) Greater investments in public health, primary care, and health equity efforts to address the social determinants of health through an improved mix of health care and human services.

(n) Improvements in cost, quality, and health care system oversight and integration, which may include reducing overall administrative burdens on providers and improving connectivity and affordability of health care, built on the accomplishments of the Office of Healthcare Affordability and other current initiatives, including the Data Exchange Framework and California Advancing and Innovating Medi-Cal.

(o) A ratesetting process that could use Medicare rates as the starting point for the development of final rates that avoid disruptions in the health care system and expand the availability of high quality vital services by sustaining a stable, experienced, and equitably compensated workforce. This process should address historic inequities in primary care physician reimbursements as compared to other specialty practices and include policies and payments to support those providers that serve a disproportionate percentage of low-income Californians and other disadvantaged communities.

(p) Promotion of a workforce that addresses geographies and specialties with the greatest shortages and is diverse and able to provide culturally and linguistically competent care to all Californians regardless of race, nationality, ethnicity, sexual identity, and socioeconomic status.

(q) Prohibition on the kinds of risk-bearing contractual arrangements that could incentivize providers to withhold needed care, while allowing for payment models that guarantee access, promote quality, ensure equity, and enable multidisciplinary teams.

(r) Specific details on how care would be coordinated and organized.

(s) Methods of payment, delivery, and oversight implemented under the unified health care financing system that will continue to allow California the ability to receive the full benefit of federal expenditures and tax credits that currently underwrite the full scope of health services.

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(Added by Stats. 2023, Ch. 412, Sec. 1. (SB 770) Effective January 1, 2024.)

Section § 1002

This law section outlines a process for developing a waiver framework to transition to a unified health care financing system in California. The Secretary of Health and Human Services will consult with stakeholders, such as consumers, health care providers, and policy experts, to address key topics like health care delivery, finance, and equity. By January 1, 2025, an interim report detailing priorities and stakeholder input will be submitted to legislative committees. By June 1, 2025, a draft framework will be open for public comment. A final report will be submitted by November 1, 2025, detailing elements for a formal waiver application. All reporting requirements will end by June 1, 2028.

(a) In developing the waiver framework, the Secretary of the Health and Human Services Agency shall engage stakeholders to provide input on topics related to discussions with the federal government and key system design issues identified by the Healthy California for All Commission for further analysis.

(1) Stakeholder engagement shall include representatives of consumers, patients, and community-based health care service providers, community organizations, health care professionals, labor unions, employers, and health policy experts, as well as representatives of government agencies and philanthropic organizations focused on health care.

(2) Key system design issues include health care delivery, finance, operations, public administration, the specifics of the transition to a unified health care financing system from the current system, adapting existing consumer protections to the new system, applying reforms to move toward systems that reward and prioritize improvements in health outcomes, health care quality, and health care equity, and how to reduce costs and improve the experience of health care consumers.

(b) The secretary shall, no later than January 1, 2025, provide an interim report to the chairs of the Assembly and Senate Budget and Health Committees that details the agency’s policy priorities and preliminary analysis of issues related to the federal discussions, as well as a summary of the input received to date through the stakeholder engagement process. The secretary shall, no later than January 1, 2025, also propose statutory language to the chairs of these committees authorizing the development and submission of applications to the federal government for waivers necessary to implement the unified health care financing system.

(c) The secretary shall, no later than June 1, 2025, complete the drafting of the waiver framework, inclusive of input gathered through the stakeholder engagement process, make the draft available to the public on the agency’s internet website, and shall hold a 45-day public comment period thereafter.

(d) The secretary shall, no later than November 1, 2025, provide the Legislature and the Governor with a report that communicates the finalized waiver framework, informed by public comment received, and sets forth the specific elements to be included in a formal waiver application to establish a unified financing system consistent with the outcomes of the agency’s discussions with the federal government.

(e) The requirement for submitting the reports specified in this subdivision is inoperative on June 1, 2028, pursuant to Section 10231.5 of the Government Code.

(f) A report submitted pursuant to this subdivision shall be submitted in compliance with Section 9795 of the Government Code.

waiver framework stakeholder engagement unified health care system health care delivery health care finance consumer protections health care equity public administration cost reduction health outcomes interim report public comment period statutory language proposal legislature report federal discussions

(Added by Stats. 2023, Ch. 412, Sec. 1. (SB 770) Effective January 1, 2024.)