Get ready for a revived brawl over single-payer healthcare in California

Whether it was bracing for a possible repeal of Obamacare or pondering an ambitious single-payer program that would overhaul how California provided medical care to its residents, the issue of healthcare kept politicians and policy wonks busy in 2017.

That’s not likely to let up in 2018.

Decisions by Congress and the Trump administration could shift priorities in the state budget. The crusade for single-payer healthcare is sending lawmakers — and candidates — scrambling. And long-simmering issues such as rising prescription drug costs continue to draw attention in Sacramento.

Here’s a primer on the healthcare agenda in California politics.

1. All eyes on Washington, D.C.

The GOP-led effort to repeal and replace the Affordable Care Act fizzled, but in the tax overhaul, congressional Republicans managed to roll back a long-targeted provision of the healthcare law: the individual mandate that requires people to buy insurance or pay a penalty.

The repeal of the individual mandate will likely result in higher insurance premiums across the country, according to the Congressional Budget Office, because healthier people would drop out of the market, leaving insurers with a sicker — and costlier — risk pool.

The mandate repeal could upend insurance exchanges in states with few insurers or high costs. In California, the impact would be softened because there are more insurers participating and new consumers joining the market, said Peter V. Lee, executive director of Covered California, the state’s insurance exchange.

“The individual mandate is an important element of the Affordable Care Act, but it is not the glue that holds it all together,” Lee said. “The secret sauce to affordability is the financial assistance provided through subsidies,” which have not changed.

Uncertainty from the federal government has kept Covered California on its toes. In August, officials announced that premiums for insurance plans for the next year would rise by an average of 12.5%. The exchange also stepped up its marketing and outreach spending in hopes of addressing confusion stemming from Washington.

Some policymakers, including Lee, have mulled the possibility of a state-level individual mandate, but that would require a major legislative lift.

Also on the horizon: a potential tug-of-war over government healthcare programs such as Medicare and Medicaid. House Speaker Paul D. Ryan (R-Wis.) has said he wants to tackle “healthcare entitlements” in the coming year.

Any changes to Medicaid funding could have drastic impact in California, where a third of residents get healthcare through Medi-Cal, as the program is known in the state.

“We are very much girding for a mother of all Medicaid battles,” said Anthony Wright, executive director of Health Access California, a consumer advocacy group.

Gov. Jerry Brown’s administration will be closely monitoring the goings-on in Washington, but don’t expect any contingency plans to be laid out in public when the governor unveils his budget plan.

“Until and unless there is a change in federal law...the rule of thumb is we budget under current law,” said H.D. Palmer, spokesman for Brown’s Department of Finance.

2. The brawl over single-payer continues

California Democrats put up a united front in opposing repeal of the Affordable Care Act. But another major healthcare proposal — a statewide single-payer system — fractured the party in 2017 and is poised to deepen those divisions.

Senate Bill 562, which would establish a system in which the state would pay for nearly all healthcare costs for its residents, electrified liberals. But Assembly Speaker Anthony Rendon (D-Paramount) shelved the bill, calling it “woefully incomplete” because of a lack of funding and other unanswered questions about implementation, sparking a backlash from his party’s leftward flank.

Seeking to redirect the debate, the Assembly has held a number of hearings in recent months to explore how to achieve “universal healthcare,” be it through a single-payer model or other ways to expand coverage. The hearings compared systems in other states and countries and looked into other ways to control costs.

Wright said it’s likely that new policy proposals will result from the hearings and the debate sparked by SB 562. Assembly Democrats already signaled they’ll be seeking to expand Medi-Cal access to cover all uninsured adults, including those without legal immigration status.

“There is a growing desire to figure out what are the major steps we can take forward to get to universal or near-universal coverage,” Wright said.

The California Nurses Assn., which sponsored the single-payer bill, wants to see that legislation move forward.

“It’s full speed ahead as far as we’re concerned. Nothing’s changed,” said Don Nielsen, policy director for the union. “The momentum is there. We need to do single-payer guaranteed healthcare for all.”

Expect the heated single-payer debate to ripple through the state’s marquee political races for governor and U.S. Senate, too.

3. Prescription drugs remain in the spotlight

Labor groups, consumer advocates and health insurers notched some major wins against the pharmaceutical industry in 2017. Two high-profile laws passed: increasing disclosure on how prescription drugs are priced and cutting back on the use of discount coupons, which some studies suggest help contribute to high premiums.

The battle is set to carry on into 2018. Drug manufacturers have sued in federal court to block the disclosure law, SB 17, arguing it is unconstitutional and “intentionally exports California's policy choices regarding prescription drug pricing on the entire nation.”

The Legislature will consider at least three additional bills to address drug prices. Assemblyman Jim Wood (D-Healdsburg) is working with the Brown administration on AB 315, which would establish regulations of pharmacy benefit managers, which act as middlemen between drug makers and purchasers.

Also pending is SB 790 by Sen. Mike McGuire (D-Healdsburg), which would limit gifts that pharmaceutical companies can give to doctors, and AB 587 by Assemblyman David Chiu (D-San Francisco), which would require state agencies to meet regularly to find ways to curb drug costs.

“We want to work with legislators on real solutions that will help patients,” said Priscilla VanderVeer, deputy vice president of public affairs for Pharmaceutical Research and Manufacturers of America.