Patterico's Pontifications

2/2/2019

Gavin Newsom Now Tries to Square Extravagant Promises with Economic Reality

Filed under: General — JVW @ 6:52 pm



[guest post by JVW]

Meanwhile, on the other dysfunctional coast. . .

Newly-installed Golden State Governor Gavin Newsom has began sketching the outlines of his budgetary priorities for the coming year and, indeed, for pretty much his entire term. To the surprise of no one, he proposes increasing spending from last year, continuing on the trajectory that his predecessor initiated in his final term. Though Gov. Newsom insists that most of the new spending — much of it based upon possibly unrealistic expectations of a $21.4 billion surplus this year — will be one-time expenditures on items such as paying down debt and shoring up pension funds, he does propose enough ongoing spending increases in areas such as education and health care to give pause to anyone who wants to see the state maintain a viable road towards financial sanity.

And it’s the health care part of it that promises to have the most far-reaching impact on whether or not the state hews to a path of fiscal discipline. Wanting to be seen as a leading progressive, Gov. Newsom campaigned on the idea of guaranteeing insurance for every resident of the state irrespective of immigration status, while grudgingly acknowledging the challenges of paying for such a lavish program. Now that he is in charge, he has started to take the first steps towards implementing his goals.

As you might expect, his proposals are laced with the tolerable, the misguided, and the downright awful. The state will seek to control costs through negotiations with drug prices (tolerable); California will implement a state version of the now-waived Obamacare individual mandate and impose non-compliance fines (sorry Justice Roberts! I meant “taxes”) which will then be used to subsidize plans for lower-income recipients (misguided); and, finally, we plan to expand the Medi-Cal program for illegal immigrants by extending the eligibility age limit from 19 to 26 (downright awful). Though Newsom believes that these changes will largely be revenue-neutral due to projected savings and new revenue from the first two items, legislative analysts have already pegged the annual costs of a broader legislative majority-backed proposal to offer Medi-Cal to all illegal immigrants at $3 billion. The governor’s proposals are but the first steps towards his more ambitious plan of a statewide single-payer plan for which he has already requested a waiver from the Trump Administration, almost certainly assuming he will be denied (frankly, the Trump Administration ought to give him the go-ahead, just so that Gov. Newsom gets the pressure ratcheted-up from his far left).

Central to the ideology of the pro-single payer advocates is that people desperately want health insurance but, for whatever reason, are unable to pay for it. This turns out to be largely untrue. A group of researchers has acknowledged that Covered California, the state-run insurance exchange established under Obamacare, has lost 250,000 enrollees since the Trump Administration waived the penalties for not purchasing a plan. They further report that enrollment this year is thus far 24 percent lower than in 2018, suggesting that numbers will continue to plummet. All this, of course, during a strong economy which has produced record employment levels. Clearly there are hundreds of thousands of my fellow Golden Staters who can afford health insurance but simply would rather spend their money on other things, contrary to the popular folklore of strapped families choosing between fixing their fifteen-year-old minivan or paying this month’s premium.

The aforementioned research team, located at USC, has come up with two plausible scenarios under which California can expand health care coverage without going to single-payer. The more ambitious scenario sees the state making health insurance more affordable for a broad section of Californians through both subsidies to purchasers and tight regulations of the markets, admittedly making the assumption that the regulation won’t lead to massive defections by providers. The second option targets specific segments of the population who can mostly pay for policies but might be more willing to do so if the pot is sweetened with increased subsidies. Starting with a baseline of 51% of the state currently covered, the ambitious plan is estimated to potentially add another 19% to that total to cover 7 out of 10 residents of the state at an annual cost of $4.2 billion above and beyond what the state already spends (assuming that the feds will chip in $1.1 billion), while the more modest option would add an additional 7% to the total to reach nearly 6 out of 10 total residents at an additional annual cost of a mere $220 million.

But that’s admittedly mostly the low-hanging fruit, i.e. the people who could afford to shoulder at least some of the cost and who wouldn’t consume massive amounts of health care on an annual basis. So the problem, obviously, is that short of going to single-payer there isn’t a whole lot that the state can do to meet its professed goal of 100% coverage, and going to single-payer would, without much doubt, be a ridiculously costly initiative especially as California would become a magnet state for those with expensive health care needs. The large number of illegal immigrants in the state presents a serious challenge since under Obamacare they are currently ineligible to receive federal subsidies. This means that the plans demanded by immigrant activists and endorsed by Gov. Newsom to cover them would have to be paid entirely by the California taxpayer.

Universal coverage advocates like Gavin Newsom have long gotten away with playing a cynical game. They endorse single-payer as a solution and paper over the obvious financial shortfalls by cheerfully insisting that they will find a way, but then they quietly seek to assure business interests and financial stakeholders that they won’t wreck the budget or gut the economy to pay for it. No doubt the endgame for Gov. Newsom is really to buy time with incremental reforms as long as the Trump Administration is around to blame for the state’s failure to enact a bolder plan, and then hope that the next Democrat administration comes in two years and nationalizes the issue in order to take Gov. Newsom off the hook. A guy who believes that boardroom bolshevism can be made to work as his party moves more towards a revolution of the proletariat is no doubt fooling himself, but we shouldn’t let him fool us as well.

– JVW

47 Responses to “Gavin Newsom Now Tries to Square Extravagant Promises with Economic Reality”

  1. Just wait until we find the 1987 picture of Newsom in a serape, bandolier, sombrero, and fake mustache at a Santa Clara Cinco de Mayo party.

    JVW (54fd0b)

  2. what about the choo choo

    happyfeet (28a91b)

  3. what about the choo choo

    It will now be repurposed to deliver everyone to the State Health Care Clinic in Barstow, which will be the only licensed venue that accepts the California Insurance Card.

    JVW (54fd0b)

  4. that’s where the Bagdad Cafe is

    happyfeet (28a91b)

  5. more or less

    happyfeet (28a91b)

  6. Before pressing play on your YouTube video, based on its title, I thought it would be Larry Bud Melman or Paul Shaffer. I was born a little later than HAL.

    urbanleftbehind (250c5f)

  7. I really am afraid. I told you my daughter has been scoping out UCLA and UCSD.

    nk (dbc370)

  8. I really am afraid. I told you my daughter has been scoping out UCLA and UCSD.

    I take it you don’t have any connections for in-state tuition. Yikes. My cousin’s daughter wanted to go to UC Davis, but the sticker price for an out-of-state student was just too stiff.

    JVW (54fd0b)

  9. Among many other things. The ones you write about. 😉

    nk (dbc370)

  10. healthcare is a right of everyone. if you have no right to healthcare you have no right to life.

    lany (3c2aab)

  11. I told you my daughter has been scoping out UCLA and UCSD.

    Ugh, you fly-over types stay off of my lawn! :)

    I have about 200 freshman applications to review next week already…

    Dave (60c18c)

  12. healthcare is a right of everyone. if you have no right to healthcare you have no right to life.

    It’s a deal. Euthanize everybody on Medicare.

    nk (dbc370)

  13. This turns out to be largely untrue.

    True. They go to the ER. I know this because I sat in the ER recently and watched them get their sniffles, etc., taken care of, while my friend with broken bones appeared to be one of the few truly emergent.

    Or, they buy Obamacare “insurance” which is not insurance at all. I saw a woman in an ad say she loved O-care because as she worked with horses on a ranch she had no insurance and didn’t know what to do when she was diagnosed with breast cancer. She was advised to sign up for the “insurance” the next day, which she did, and was treated and cured. So good for her, I’m glad she’s healthy, but that’s not insurance–that’s free medical treatment!

    Patricia (3363ec)

  14. I also think Newsom is just tossing out these budget-busting proposals to mau-mau the middle class, which is working. This is classic Curley Effect politics, and the results of the last election prove that the Dems have succeeded in forever changing the electorate into a compliant, leftist blob.

    https://scholar.harvard.edu/files/glaeser/files/curley_effect_1.pdf

    Patricia (3363ec)

  15. 60 years ago this morning the music died.

    harkin (0e0056)

  16. Between this and the fact that the Beatles “Rooftop Concert” was 50 years ago this past week, one can feel very old.

    Colonel Haiku (2601c0)

  17. The first event happened when I was in 2nd grade, the latter in my junior year of high school.

    Colonel Haiku (2601c0)

  18. Back then, California was golden, a land of abundance. I grew up in the OC… we moved from west to east Anaheim in 1962 – a time when orange groves thrived throughout the city and county and many of what are now busy thoroughfares were just narrow two lane roads winding through the groves. My parents urchased a new house in a tract near the intersection of Lincoln and Rio Vista that bordered on the Santa Ana River. Our family was blessed to have an aunt and uncle – my dad’s brother – living just a few houses down on the same street as us. We grew up with them, and we looked up to those older than us. This was a time when a kid could ride his bike over to the newly built Angel’s Stadium and watch a baseball game in the cheap seats for a $1.60. A time before big-money major league baseball, where we had some Angels and their families live in our neighborhood and had a chance to make new friends – albeit short term – of their sons and daughters… at least until the next trade.

    I have memories of us all as pre-teens riding our Stingray banana seat equipped bikes all around the eastside of Anaheim, we even took some bike rides from our home to a “country club” that was all the way out in Carbon Canyon across the LA County line… and thought nothing of it… let alone tell our mother or father about the excursions until an opportune time, or well after the statute of limitations ran out… whichever came first… usually the latter. Kids roamed the streets… and we liked it! It was a different time.

    I remember a small construction hut that had been abandoned for a few months after construction of our housing tract had completed and all of us “repurposing” it into a clubhouse of sorts, and how we used it until it was reclaimed by the builder several months later. I remember my sisters and neighborhood girls playing with their Barbie dolls and adding their woman’s touch to our clubhouse, while the boys fished, caught crawdads, or took our BB guns over to the dirt road along the SA River that the sand & gravel trucks used to go to and from the Gravel Pit… and us darting behind trees, bushes any kind of cover as we played soldiers like we watched them do on the old “Combat” TV series… we did stuff that they’d probably send the SWAT team out on now… yes, it was a definitely a different time. Finding salamanders and scorpions under pieces of old wood or cardboard… carefully catching alligator lizards and chasing after sisters and some of the other screaming girls as we held the lizards in our hands. I’m not proud when I say that we were young and we found our laughs where and when we could.

    Colonel Haiku (2601c0)

  19. So much has changed, and not all for the better.

    Colonel Haiku (2601c0)

  20. I saw a woman in an ad say she loved O-care because as she worked with horses on a ranch she had no insurance and didn’t know what to do when she was diagnosed with breast cancer. She was advised to sign up for the “insurance” the next day, which she did, and was treated and cured. So good for her, I’m glad she’s healthy, but that’s not insurance–that’s free medical treatment!

    And of course that’s not how Obamacare was supposed to work. All of the savings to the government were supposed to come from “preventative” care, so we were supposed to find her breast cancer in th earliest stages where it is more easily treatable. Of course that presumed that she would have been signed up for and been paying for health insurance all along, and not waited until she needed extraordinary care. But there are plenty of stories just like that: “I found out I was really sick and so I signed up for Obamacare.” It was entirely predictable, but advocates refused to believe it would turn out that way.

    JVW (54fd0b)

  21. Can you smell the brisket?

    mg (8cbc69)

  22. Those were the days before the government swooped down and made everything “better,” Colonel. Sad.

    Patricia (3363ec)

  23. the only reason we have people grifting off the obamacare is cause Meghan McCain’s corrupt cowardpig navy daddy had no integrity

    happyfeet (28a91b)

  24. Those Newsomecare taxes only fall on a few: those self-employed who cannot afford the high premiums caused by placing all the problem cases into their insurance pool.

    Kevin M (21ca15)

  25. It’s a deal. Euthanize everybody on Medicare.

    I went on Medicare yesterday. I paid through the nose for 45 years for all those oldsters, so GFY, with all due respect.

    Kevin M (21ca15)

  26. With TrumpCare (removing the individual mandate but still requiring insurers to cover pre-existing conditions) why would anyone pay for health insurance before they need health care?

    If you were trying to drive the market-based, private insurance industry out of business, what would you do differently?

    Universal coverage advocates like Gavin Newsom have long gotten away with playing a cynical game.

    Indeed they have:

    60 Minutes: “What’s your plan for Obamacare?”

    Donald Trump: “Obamacare’s going to be repealed and replaced. Obamacare is a disaster if you look at what’s going on with premiums where they’re up 40, 50, 55 percent.”

    60 Minutes: “How do you fix it?”

    Donald Trump: “There’s many different ways, by the way. Everybody’s got to be covered. This is an un-Republican thing for me to say because a lot of times they say, ‘No, no, the lower 25 percent that can’t afford private. But–‘”

    60 Minutes: “Universal health care.”

    Donald Trump: “I am going to take care of everybody. I don’t care if it costs me votes or not. Everybody’s going to be taken care of much better than they’re taken care of now.”

    60 Minutes: “The uninsured person is going to be taken care of. How? How?”

    Donald Trump: “They’re going to be taken care of. I would make a deal with existing hospitals to take care of people. And, you know what, if this is probably—”

    60 Minutes: “Make a deal? Who pays for it?”

    Donald Trump: “—the government’s gonna pay for it. But we’re going to save so much money on the other side. But for the most it’s going to be a private plan and people are going to be able to go out and negotiate great plans with lots of different competition with lots of competitors with great companies and they can have their doctors, they can have plans, they can have everything.”

    Still waiting for that “deal with existing hospitals” to “take care of everybody”…

    Dave (1bb933)

  27. but that’s not insurance–that’s free medical treatment!

    To be fair, most employer-paid insurance has no pre-existing condition exclusion, and those that do have only short waiting periods. So, maybe they aren’t insurance either.

    There are lots of reasonable possible systems that don’t have the exclusion. Ocare isn’t one of them, but that doesn’t make the idea wrong.

    Kevin M (21ca15)

  28. Funny, Colonel, how you and your friends made your own fun without being tightly scheduled by your parents. In my neighborhood we have a whole bunch of “active” neighborhood kids, but here is how their weekend day shakes out: get up at 6:30 am to head to the swimming pool for morning practice, then to the pancake house afterwords for a quick breakfast. Later in the morning is the hour-long guitar lesson, then to karate just before lunch. After lunch it’s volunteer work with mom in some environmental group, then soccer practice, before finally heading home for dinner, video games, and bed. I have no idea how kids in less-affluent neighborhoods live, but I doubt that they have as interesting or fulfilling a childhood as you had.

    JVW (54fd0b)

  29. I have no idea how kids in less-affluent neighborhoods live, but I doubt that they have as interesting or fulfilling a childhood as you had.
    I think the Colonel had that kind of childhood because he lived in a semi-rural neighborhood, compared to kids that liked in areas closer to, or in, the city core.
    Also, like all of us, the kids today not only have helicopter parents and down to the half hour schedules. They have Ipads to play games on….

    kishnevi (bb03e6)

  30. Monkey handlebars with a baseball glove on it, Col?

    mg (8cbc69)

  31. Clearly there are hundreds of thousands of my fellow Golden Staters who can afford health insurance but simply would rather spend their money on other things, contrary to the popular folklore of strapped families choosing between fixing their fifteen-year-old minivan or paying this month’s premium.

    Is there any actual evidence to support that? Or is it simply people looking at the premiums they would have pay for individual/family policies, and deciding, in the absence of the mandate, that they it’s an expense they don’t need to pay…just like before Obamacare came onto the scene.

    I am, now that I am off COBRA from my old job, on an Obamacare plan. My premium is just under $500, but that’s because of the federal subsidies. Without it, it would be just under $1200 a month. And that’s for me, alone, with no spouse or dependents.

    kishnevi (bb03e6)

  32. I base my guess because I know of at least a couple of self-employed under-40 men whose non-subsidized premiums would probably be around $300 per month for a bronze plan, but they have chosen to go without insurance because they would rather keep that money. Anecdotally you read of others who have made the same decision. I think people closer to our age are more likely to bite the bullet and pay for a plan, but the younger people don’t always see it as a worthwhile expense.

    JVW (54fd0b)

  33. To be fair, most employer-paid insurance has no pre-existing condition exclusion, and those that do have only short waiting periods. So, maybe they aren’t insurance either.

    Where I work, that may be true but you don’t have freedom to join the group plans whenever you want. There is a month or two every year when they accept new policies or allow changes to existing coverage.

    New hires are an exception.

    Dave (1bb933)

  34. I went on Medicare yesterday. I paid through the nose for 45 years for all those oldsters, so GFY, with all due respect.

    And that’s how Socialism slowly boils the frog. By taxing you an amount not worth taking up arms for, for 45 years, so that you come to think that it’s in the order of things. Oh, well, better than the Cheka coming around with their Mausers and the train manifest for Siberia, I suppose.

    nk (dbc370)

  35. And that’s how Socialism slowly boils the frog.

    Capitalism is system where man is exploited by man.

    In socialism, is other way around.

    Dave (1bb933)

  36. — When Communism (Utopia) finally arrives, will there still be Cheka?
    — No! Anti-social elements will arrest themselves.

    nk (dbc370)

  37. I’ve told this one before, I think

    Ivan: Come the Revolution everyone will eat strawberries and cream!
    Pyotr: But I don’t like strawberries and cream!
    Ivan: Come the Revolution you will have to like strawberries and cream!

    kishnevi (bb03e6)

  38. Capitalism Slavery is system where man is exploited by man.

    Capitalism is system where man is exploited by freely cooperates with man.

    FIFY.

    felipe (023cc9)

  39. Kevin M

    Sure, short waiting periods are similar. But if you have a heart attack or suddenly start vomiting blood or feel a lump, you are probably not going to wait the 30 days. Or until the next open enrollment. But in Ocare it completely removes the incentive to sign up until you’re sick.

    Patricia (3363ec)

  40. I guess we were lucky to be there and and at that time.

    Speaking of baseball, mg… Jim Fregosi lived with his family about a mile and a half from our house. One day in the early Spring, I was riding shotgun in the hot VW one of my friends had and as we were heading over to another friend’s house, we see Fregosi leaving his front door, walking on the front walk with a tote bag heading to his car. “You suck, Fregosi!”. He gave us a sneer and a flamboyant flipping of teh bird. Man, we laughed.

    Colonel Haiku (2601c0)

  41. With TrumpCare (removing the individual mandate but still requiring insurers to cover pre-existing conditions) why would anyone pay for health insurance before they need health care?

    Because you can only sign up at the beginning of each year. IF you get sick in June, you are SOL if you think you can sign up then. Of course, Medicaid has no such rules, but it never did.

    Kevin M (21ca15)

  42. My premium is just under $500, but that’s because of the federal subsidies

    And the problem with the subsidy system is that it is based solely on income, while the premiums are based solely on age. There comes a point where the welfare trap is enormous.

    And it is far easier to live under the income cap in, say, Mobile than Los Angeles.

    Kevin M (21ca15)

  43. But in Ocare it completely removes the incentive to sign up until you’re sick.

    Uh, no. Wrong. IF you miss open enrollment in Ocare, you have to wait ’til next year. With employer-sponsored plans not only is the premium unrelated to age, and usually subsidized as an untaxed benefit, but you can sign up when you hire on regardless of illness.

    The filter there, though, is that people who are really sick have trouble getting or staying employed. BUt it is FALSE to say that you can sign up for Ocare outside of the Dec-Jan open enrollment (except for a couple of special cases (e.g. got divorced, changed States) that usually hinge on having had insurance within 60 days prior).

    Again, MEDICAID allows instant signup, but it always has, unrelated to Ocare.

    Kevin M (21ca15)

  44. And that’s how Socialism slowly boils the frog

    That frog has been boiled for some time now. Like everyone else who’s 30, I fought this politically back then, but the old folks ALL vote EVERY time, and people who are 30 are busy working and getting laid. Over time, I accepted it and speaking for everyone 60 or older (other than the rich), I gotta say that it’s a blood oath on the part of government and break that oath on pain of the guillotine.

    Kevin M (21ca15)

  45. 44. Kevin M (21ca15) — 2/4/2019 @ 9:44

    Again, MEDICAID allows instant signup, but it always has, unrelated to Ocare.

    Medicaid is even retroactive, 90 days.

    On the other hand, the money can be clawed back. Oftentimes, years later.

    Sammy Finkelman (102c75)

  46. 21. JVW (54fd0b) — 2/3/2019 @ 9:16 am

    All of the savings to the government were supposed to come from “preventative” care,

    There are no savings, except in some limited cases. Medical benefit may occur in more cases, but not asavings in expense.

    so we were supposed to find her breast cancer in the earliest stages where it is more easily treatable.

    That won’t happen. Too many false positives. There’s too much “cancer” diagnosed – growths that wouldn’t go anywhere. The proof is that the overall breast cancer death rate didn’t go down even though there’s more early diagnosis.

    Obama was as wrong about “preventatie care” as he was about shovel ready projects. Maybe his fault because he didn’t consult enough people or ask enough questions. But then he wasn’t interested in questioning what he was told. His whole career was based on nnot asking too many questions.

    Sammy Finkelman (102c75)

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