How California is trying to establish a single-payer healthcare system

Nearly half of US states have proposed legislation in the last decade or so to establish a single-payer healthcare system—to little avail.

California is the latest to attempt to transform its healthcare system, as Governor Gavin Newsom signed SB770 into law in October 2023, getting the ball rolling for the state to receive federal funding for a potential single-payer healthcare system in which a single entity collects and pays for all healthcare costs.

“With this signature, California takes a historic step toward universal healthcare,” State Senator Scott Wiener, who authored the legislation, said in a statement to the Los Angeles Times. “The state will now begin answering the complex question of how we can access federal financing to fund a universal healthcare system like single-payer.”

How SB770 works

SB770 is the latest small step California officials have taken toward a potential single-payer healthcare system in the state, but the bill doesn’t include any sweeping changes.

The legislation sets forth a “concrete timeline” for the state to take the necessary steps to receive a waiver for federal funding of a single-payer system, Michael Lighty, president of Healthy California Now, a coalition that seeks to establish a single-payer system, told Healthcare Brew.

The bill requires California officials to discuss with the Centers for Medicare & Medicaid Services (CMS) and other stakeholders what a potential waiver would look like, draft a sample , then hold a 45-day comment period for stakeholders to provide feedback. The final framework is due by November 1, 2025, at which time the state will seek authorization to formally apply for the waiver, Lighty said.

Healthy California Now sponsored SB770, which is also supported by a number of other California-based coalitions, including the California Academy of Family Physicians—the largest chapter of the American Academy of Family Physicians—and the American Civil Liberties Union of Southern California.

The legislation is estimated to cost an “indeterminate amount, potentially in the low millions of dollars for fiscal year 2023–24 and ongoing,” according to the final bill analysis.

What makes California different

A noteworthy difference in California’s approach to single-payer compared to other states is the focus on a “unified financing” system, a term the Healthy California For All Commission adopted.

A unified financing system focuses on establishing universal health coverage in California, which could include, but is not limited to, a single-payer system, according to Wiener.

This kind of system “provides a single source of payment for healthcare services, eliminating disparities between existing types of health coverage, and provides for no out-of-pocket costs, copayments, and so forth, and is financed through the replacement of insurance premiums with a progressive taxation system,” Lighty said.

The Healthy California for All Commission, which Newsom established in 2019, estimated that a unified financing system would save California $158 billion by 2031.

Healthy California Now considers “unified financing” and “single-payer” to be synonymous, according to Lighty. But Carmen Comsti, lead regulatory specialist at the California Nurses Association (CNA)—which also advocates for the creation of a single-payer system in the state—told Healthcare Brew the coalition’s members are “deeply concerned” about SB770 focusing on unified financing rather than single-payer.

“The term ‘unified financing’ has been used to describe a healthcare system that preserves a role for health insurance and other profit-driven middlemen,” Comsti said. “Nurses know that this type of system will not rein in the skyrocketing costs of our profit-driven system, and as a multipayer system of health insurance, unified financing will never guarantee healthcare for all.”

Disagreements on how to create a single-payer system

The CNA and Healthy California now both advocate for a single-payer system in the state but disagree on how it should be established.

Comsti said SB770 is asking California to do work that’s already been done. Lighty said that claim is “false.”

“The California Department of Healthcare Services hasn’t engaged with the federal government before,” he said, adding that the disagreement between the two coalitions is “really just a matter of process.”

“CNA believes that the legislature should pass a bill, then talk to the feds,” Lighty said. “We think it’s better to get those issues understood in advance, informally, before asking the legislature to pass a comprehensive program. [...] We believe this approach is more efficient, and more likely to succeed.”

Looking forward

SB770 implementation will be Healthy California Now’s “exclusive focus of work” for the next two years, Lighty said, adding that the coalition currently has no plans to sponsor any other single-payer legislation. 

CNA, on the other hand, is “gearing up” to reintroduce CalCare (also known as AB1690) to the California legislature early next year, Comsti said. CalCare, or the California Guaranteed Health Care for All Act, would overhaul the state’s healthcare system and establish a single-payer system. The bill was introduced earlier this year but has yet to be voted on, nonprofit news organization CalMatters reported.

If California were to successfully implement a single-payer healthcare system, it could serve as a blueprint for other states to follow suit.

“California is in the best position nationally to be able to really achieve a universal healthcare system that guarantees healthcare for all,” Lighty said. “We think it could be a model—if we’re able to successfully do it.”