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California State Controlled Health Care Bill Fails While Newsome Inks Backroom Deal With Kaiser

    Note: This article may contain commentary or the author's opinion.

    Many Californians took a victory lap around the track last week when a Single-Payer Health Care scheme died on the Assembly floor.  The victory lap was cut short, however, when those same Californians learned that the Gavin Newsom Administration made a deal with Kaiser Permanente that was similar to Governor Newsom’s state-controlled health care bill, Assembly Bill 1400.

    The main notable difference between AB 1400 and the Newsom deal is that the Newsom deal was inked outside of the legislative process and was done by high-powered lobbyists.

    The Californian Globe reported last week:

    “Kaiser Permanente “has given nearly $100 million in charitable funding and grant money to boost Newsom’s efforts against homelessness, COVID response, and wildfire relief since 2019,” according to Modern Healthcare.”

    Modern Healthcare reported:

    “California Gov. Gavin Newsom’s administration has negotiated a secret deal to give Kaiser Permanente a special Medicaid contract that would allow the healthcare behemoth to expand its reach in California and largely continue selecting the enrollees it wants, which other health plans say leaves them with a disproportionate share of the program’s sickest and costliest patients.

    “The deal, hammered out behind closed doors between Kaiser Permanente and senior officials in Newsom’s office, could complicate a long-planned and expensive transformation of Medi-Cal, the state’s Medicaid program, which covers roughly 14 million low-income Californians.”

    The Globe further reported that the 14 million low-income Californians was one-third of the population and that Medi-Cal is the State’s health insurance plan for those people.

    More from the Globe:

    “The plan is to cut out the competition and make everyone in California under Kaiser,” a doctor familiar with the deal told the Globe under condition of anonymity. Is this just the camel’s nose under the tent?

    Because if the Legislature and governor can’t pass single payer, this is the best alternative given that Kaiser’s Medi-Cal enrollment is expected to grow by 25% under the contract, serving 32 counties, CalMatters reported.”

    Kaiser Permanente’s chief health officer, Dr. Bechara Choucair, took the stance in a prepared statement that “because it operates both as a health insurer and a healthcare provider, KP should be treated differently than other commercial health plans that participate in Medi-Cal.”

    The Globe lists the following relevant facts to help explain how the deal between Newsom and Kaiser Permanente came about:

    • “In 2020, KP gave $25 million to one of Newsom’s key initiatives, a state homelessness fund to move people off the streets and into hotel rooms, according to a KHN analysis of charitable payments filed with the California Fair Political Practices Commission. The same year, it donated $9.75 million to a state COVID relief fund.

      In summer 2020, when local and state public health departments struggled to contain COVID spread, the healthcare giant pledged $63 million in grant funding to help contract-tracing efforts.”

    • “Jim DeBoo, Newsom’s executive secretary, used to lobby for KP before joining the administration. Toby Douglas, a former director of the state Department of Health Care Services, which runs Medi-Cal, is now Kaiser Permanente’s vice president for national Medicaid.”
    • “Kaiser Permanente historically has not played a very big role in Medi-Cal, and the state has long recognized that we would benefit from having them more engaged because they get better health outcomes and focus on prevention,” said Daniel Zingale, a former Newsom administration official and health insurance regulator who now advises a lobbying firm that has Kaiser Permanente as a client.”
    • The other key person is Diana Shiba, M.D., current Los Angeles County medical president who was Kaiser’s government committee lead/chair, my source said. The Kaiser Government committee is the lobby group for Kaiser.

    A 2019 Globe article had this to say about Daniel Zingale:

     “Zingale, a political strategist and civil rights activist… has deep ties in California politics, and the Democratic Party. Zingale served as Senior vice president and chief political strategist at the California Endowment, was a founding director of the California Department of Managed Health Care – the regulatory agency overseeing health plans in the state, was chief of staff to then-California First Lady Maria Shriver and senior advisor to Governor Arnold Schwarzenegger, and was Cabinet secretary to Gov. Gray Davis.”

    “Zingale is a strong proponent of Gov. Newsom’s desire to restore the Obamacare mandate, and universal coverage for all people living in California.”

    It would appear then, since not a single California democrat voted to keep AB 1400, that maybe the Newsom-Kaiser deal was only unknown to some, and the reports that democrats are “seething” and “having a meltdown” may be contrived reporting– if they are so upset, why didn’t they vote for it?  It would certainly provide a distraction and cover while Newsom completes his end-run around the Legislative process.


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