basic-care-framework.md

Basic Care Framework

Universal Healthcare Baseline

A narrow public baseline for routine outpatient care.

Introduction

Basic care is the universal healthcare baseline inside the Affordable Basics framework. It is not comprehensive insurance and it is not a back door to full single-payer coverage. It is a narrower promise: everyone should be able to get the ordinary, recurring, and foundational outpatient care that keeps daily life stable.

That means the baseline should reliably cover primary care, prevention, routine chronic management, routine mental health, maternal care, pediatric basics, urgent outpatient care, and a limited generics-only drug layer. It should not pretend to absorb the entire hospital, specialty, imaging, and advanced-drug system into one undifferentiated public promise.

That narrower scope is the point. A basic-care layer can be universal, simple, and durable precisely because it is disciplined. It reduces avoidable escalation into more expensive settings, removes routine care from the maze of deductibles and billing friction, and gives California a healthcare guarantee it can actually govern.

This document defines that baseline. The separate earned healthcare continuity insurance document addresses the broader work-earned transition protection layer for emergency, hospital, specialty, and other non-basic costs.

In plain terms, this document argues for a basic-care layer that would:

• guarantee a universal front-door healthcare baseline
• cover ordinary outpatient care that most households actually use
• include pregnancy, childbirth, postpartum care, and core pediatric care inside the baseline
• use a generics-only outpatient drug rule by default
• operate with simple statewide rules and broad provider participation
• keep patient cost sharing at zero for covered basic-care services
• keep existing private coverage and Medi-Cal financially primary for covered basic-care claims where they already apply
• use the state basic-care fund to close the remaining gap so the patient still sees one universal zero-cost baseline
• route more complex or expensive care into higher-acuity systems rather than pretending the baseline can absorb everything
• estimate the California fiscal requirement only after the package and operating model are clear

What Basic Care Covers

In framework terms, basic care includes:

• primary care
• preventive care
• pregnancy care, childbirth, and postpartum care
• routine mental-health-basic care
• chronic disease management at the routine level
• urgent non-emergency outpatient care
• a limited essential outpatient prescription layer tied to the basic-care package

Pregnancy and Family Formation

Pregnancy and childbirth belong fully inside the universal basic-care package.

If the framework is serious about supporting children and families, it should not treat pregnancy as an edge case or as a benefit that disappears into a broader insurance layer. Pregnancy-related care should be fully covered inside the basic-care layer, including:

• prenatal care
• labor and delivery
• postpartum care
• routine pregnancy-related medications
• ordinary pregnancy-related diagnostics and follow-up

Pregnancy should be treated as a core civic priority within the healthcare framework, not as a marginal add-on.

Children in Basic Care

Most ordinary pediatric needs should be fully covered inside the universal basic-care layer.

That includes:

• routine pediatric primary care
• preventive pediatric care
• vaccinations
• developmental screening
• ordinary urgent pediatric care
• routine pediatric prescriptions within the essential drug layer

This is one reason the basic-care package matters so much. It should absorb most normal childhood care without requiring a separate means test or coverage cliff.

What Basic Care Does Not Cover

Basic care does not include:

• emergency room financing as part of the baseline package
• inpatient hospitalization except where pregnancy and childbirth are part of the basic-care package
• specialist-led diagnostics or treatment as a standing entitlement
• complex surgery
• advanced imaging as a routine baseline entitlement
• highly specialized pharmaceuticals

The baseline should function as the access and stabilization layer that routes people upward when more complex care is needed.

Referral Principle

The basic-care layer should include:

• initial assessment
• ordinary diagnostics within its scope
• management of routine conditions
• referral into higher-acuity systems
• care coordination where that reduces avoidable breakdown

The baseline should not be asked to absorb the full financing burden of the specialist and hospital system.

How Basic Care Works

Basic care should be a state-governed, universally available benefit, not a state-owned provider system. California should define the package, payment rules, covered codes, and financing structure, while contracted administrators and participating providers handle delivery and operations.

The package also cannot remain purely conceptual. To become real, California would need to translate the policy definition of basic care into a licensed and governable CPT/HCPCS outpatient coverage list developed with clinical input and formal collaboration around the code sets used in practice.[12][13]

Delivery

Basic care should be deliverable in many outpatient settings:

• independent physician practices
• community clinics
• Federally Qualified Health Centers
• county clinics
• urgent-care sites
• maternal-care providers
• other qualified outpatient sites

What matters is not ownership. What matters is whether the provider or site is qualified to deliver a covered service and can bill the standardized codes.

Provider qualification should largely follow existing licensure, credentialing, and billing standards rather than inventing a separate professional regime. The system should maintain a central provider registry:

• the registry should be privately administered under state contract
• the registry should be publicly available
• the registry should show which providers and sites are qualified to bill basic-care services
• the registry should support claims routing, accountability, fraud controls, and public transparency

This creates one transparent system of record without forcing the state itself to run provider operations.

Administrators should not compete by narrowing provider networks. The basic-care layer should aim for broad inclusion:

• all qualified physicians
• all qualified physician assistants
• all qualified nurse practitioners
• all qualified clinics and sites capable of delivering the covered services

If a qualified provider delivers a covered service, the claim should flow through the regional administrator responsible for that service location. Competition should exist in administration quality and fraud control, not in provider exclusion.

Payment and Administration

The state should use Medicare-referenced pricing as the starting point for the basic-care fee schedule:

• use the Medicare physician fee schedule and related federal payment references as the base structure
• apply a California adjustment factor above Medicare so payment is high enough to secure participation and avoid underpaying the delivery system
• allow the adjustment factor to vary when necessary by service class or persistent access problem
• review rates periodically against participation, access, utilization, and administrative performance

An initial benchmark such as Medicare x 1.2 is a reasonable starting concept, but the framework should not hard-code one multiplier across every service forever. The principle is more important than the initial number: payment should be anchored in a known public schedule and adjusted upward enough to make the benefit real.

The final clinical definition of basic care should be translated into a single statewide covered-code list for physician and outpatient services. That work should be done deliberately:

• use the policy definition in this document to decide what belongs inside and outside the baseline
• build the operational list against the CPT/HCPCS outpatient code structure already used in billing and payment systems
• develop that implementation with clinical societies, practicing physicians, and formal AMA collaboration around CPT content and maintenance
• publish the state's coverage rules and inclusion principles clearly, while respecting CPT licensing requirements rather than pretending the code set is a free public taxonomy

This matters because the real boundary of the basic-care package will ultimately be enforced not only by prose, but by the covered codes that providers can actually bill.

Ordinary covered basic-care codes should generally be paid without prior authorization.

The system should presume clean payment for routine covered services unless there is a specific program-integrity trigger, outlier pattern, or narrowly defined exception. Basic care should operate more like infrastructure and less like a heavily managed utilization gate.

California should be divided into a limited number of regional administrative districts. Claim routing should be simple and predictable:

• claims route by the region in which the covered service is delivered
• the provider registry should identify the administrator responsible for that service location
• exceptions should be narrow and operational, not a source of confusion

Service-location routing is easier to administer at the point of billing than systems that depend on patient plan logic or fragmented eligibility lookups.

Administrators should process and pay claims, maintain provider enrollment and registry data, support program integrity, provide reporting, and handle provider operations. They should not control the definition of the package, the covered code list, the statewide fee schedule, or provider inclusion through narrow-network strategies. The state should procure them against a fixed statewide benefit and publish a simple public scorecard focused on claims speed, clean payment, complaints, appeals, access, and fraud-recovery accuracy.

Patient Rules and Drug Rules

The basic-care layer should be simple for patients to use. If the baseline is meant to function like civic infrastructure, patients should not have to negotiate deductibles, copays, or brand-drug exceptions just to obtain ordinary covered care.

Zero Patient Cost Sharing

The universal basic-care layer should have zero patient cost sharing for covered basic-care services and covered basic-care drugs.

That means:

• no copays for covered basic-care visits
• no coinsurance for covered basic-care services
• no deductible barrier within the basic-care layer

If the framework wants the basic-care layer to function as real civic infrastructure, it should not ask households to stop and calculate whether a routine primary-care visit is worth the cash at the point of use.

Financing Doctrine For Covered Basic-Care Claims

Basic care should be universal in entitlement and patient experience, but not necessarily state-primary for every dollar of financing.

The cleaner doctrine is:

• the patient gets the same defined basic-care package regardless of insurance category
• the patient owes zero out of pocket for covered basic-care services
• existing private coverage and Medi-Cal remain financially primary for covered basic-care claims where they already apply
• the basic-care fund closes the remaining gap and pays when no other primary payer applies

That approach preserves the universal promise without turning the program into a needless replacement of financing streams that already exist. It also sharply reduces the direct state financing burden compared with a model in which the state simply pays every covered basic-care claim first and sorts the rest out later.

Basic-Care Drug Layer

The universal basic-care layer should include a limited essential outpatient drug list tied to the conditions and services covered by the basic-care package. The governing rule for this framework is that the basic-care drug layer is generic-first and generics-only by default.[6][7]

This layer should prioritize:

• common generics
• chronic disease maintenance drugs at the routine level
• maternal and preventive medications
• essential mental-health-basic medications
• urgent non-specialty outpatient drug needs

Generics-only rule

The baseline rule should be stated plainly:

• the basic-care drug list is limited to outpatient generics
• brand-name outpatient drugs are outside the ordinary basic-care baseline
• drugs without a meaningful generic equivalent are outside the scope of basic care and belong, if covered at all, in a separate non-basic coverage framework

If the framework tries to include the full prescription landscape inside universal basic care, the drug benefit quickly stops being a basic-care benefit and becomes a shadow version of comprehensive insurance. A limited generic list with a firm boundary around non-generic drugs is much more durable fiscally and better aligned with the actual role of the basic-care layer.[6][7][8]

Integrity and Quality

The model works only if it stays easy to use for legitimate care while remaining hard to exploit at scale.

Fraud Control and Program Integrity

Because the framework favors broad provider inclusion, it needs a strong fraud-control section.

Core principle

The system should be easy to use for legitimate care and hard to exploit at scale.

Recommended controls

• prepayment edits for obvious billing anomalies
• post-payment audit authority
• code-frequency and outlier analysis
• credentialing and identity controls
• exclusion and recovery authority for validated fraud
• shared reporting across administrators so bad actors cannot simply move regions

Administrator incentives

Administrators should have a financial incentive to prevent and recover real fraud, but that incentive has to be designed carefully.

Recommended approach:

• allow administrators to retain a defined share of validated fraud recoveries or documented fraud-prevention savings
• do not reward administrators for blanket denials or indiscriminate utilization suppression
• require clear audit standards, appeals, and public reporting so fraud enforcement does not become a disguised form of underpayment

The goal is to reward real program integrity, not false savings created by frustrating legitimate care.

Quality Safeguards

The model also needs a quality floor.

Core quality principles

• the basic-care layer should be clinically real, not merely cheap
• payment simplicity should not come at the cost of unsafe or low-quality care
• quality oversight should be strong enough to protect patients without turning the system back into an administrative maze

Possible safeguards

• basic reporting on preventive-care delivery and follow-up
• maternal-care quality measures
• continuity-of-care measures
• complaint and grievance review
• audit authority for substandard or systematically abusive providers

The framework should rely on existing professional standards where possible rather than trying to invent an entirely separate quality regime for basic care.

California Cost and Financing

The financing discussion belongs after the package and operating model are clear. California should guarantee one universal, zero-cost basic-care floor while existing private coverage and Medi-Cal remain primary where they already apply. The state financing question is therefore straightforward: what dedicated revenue is needed to cover the residual liability that remains after those existing financing streams stay in place?[1][2][3][4][5][6][8][9][10]

Basic-Care Fund

The framework should establish a basic-care fund dedicated to backing the universal basic-care promise.

• the fund should pay covered basic-care claims directly when no other primary payer applies
• the fund should wrap covered basic-care claims where existing private coverage or Medi-Cal leaves patient cost sharing, uncovered residual amounts, or payment gaps inconsistent with the universal zero-cost rule
• the fund should support claims routing, reconciliation, and clean payment under one statewide basic-care definition
• the fund should have a stable, visible revenue source rather than depending on ad hoc annual patching
• a statewide sales-tax increment is a plausible financing mechanism because it is broad-based, automatic, and legible

The core principle is simple: universal basic care should have its own visible financing stream, and California should use existing financing first where it already exists.

Gross package value versus state financing need

Using the package defined in this document, a reasonable California planning estimate for the annual gross value of the universal basic-care package is about $33.8 billion per year under the framework's generics-only drug rule.

That estimate is built from the following illustrative components:

Component	Illustrative annual cost
primary, preventive, pediatric, and routine chronic outpatient care	$11.0 billion
urgent non-emergency outpatient care	$1.5 billion
pregnancy, childbirth, and postpartum care	$4.6 billion
routine mental-health-basic care	$4.0 billion
essential generic outpatient drugs	$6.8 billion
claims subtotal	$27.9 billion
administration, claims operations, registry, IT, and provider support	$2.8 billion
fraud control, audit, and residual leakage	$0.7 billion
wellness, condition management, and care coordination	$1.2 billion
reserve contribution for downturns and sales-tax volatility	$1.2 billion
gross annual package value	$33.8 billion

This is a planning estimate anchored to current California population, observed primary-care utilization, current state spending patterns, California birth volume, California pharmacy spending, and a deliberately narrow clinical package.[1][2][3][4][5][6][9] The administrative, fraud-control, and reserve allowances are deliberately non-zero rather than assuming those costs away.[9][11]

That figure is the value of the full basic-care basket, not the direct annual state financing requirement. Existing private coverage and Medi-Cal remain primary where they already govern, and the state fund backs the universal zero-cost floor.

Existing spending already inside the system

The gross package value is not the same thing as the direct state financing requirement.

California already pays for much of this same basic-care basket through private insurance and Medi-Cal. A reasonable overlap estimate is:

Current spending source	Illustrative annual amount already spent on the basic-care basket
private insurance and related commercial coverage	$17.8 billion
Medi-Cal	$11.7 billion
total current overlapping spending	$29.5 billion

The framework should therefore assume:

• California should preserve Medi-Cal financing wherever federal matching rules and existing eligibility already apply
• California should preserve existing private-insurance financing for covered basic-care claims wherever commercial coverage already governs
• California should use the basic-care fund to eliminate patient cost sharing and close residual gaps so the universal baseline remains real

That means California is financing residual liability, not replacing the whole routine-care economy.

The state's real financing responsibilities are:

1. paying covered basic-care claims for people with no other primary payer
2. wrapping patient cost sharing and residual gaps left by existing private coverage or Medi-Cal for covered basic-care services
3. administering the statewide covered-code system, registry, claims routing, fraud control, and payment reconciliation
4. maintaining a visible reserve so payment remains stable through downturns and revenue swings

That is still a serious obligation, but it is much smaller than the gross value of the full basket.

Private-insurance savings still matter under this approach. A large share of routine outpatient spending currently carried through premiums, claims, and cost sharing would be standardized into the universal basic-care floor, which should still reduce pressure on employers and households over time.[3][8][9]

State financing estimate

Using the figures above, the implied residual state financing need is:

• $33.8 billion gross annual package value
• minus $29.5 billion in retained private and Medi-Cal financing
• equals about $4.3 billion in annual state basic-care liability

That residual figure covers the state's role as defined in this framework:

• uninsured covered basic-care claims
• wrap payments needed to hold patient cost sharing at zero
• statewide administration, claims routing, fraud control, and registry costs
• reserve contribution

Using California's current sales-tax base, one statewide sales-tax point raises about $9.0 billion per year.[10]

That implies a planning financing requirement of about 0.48 sales-tax points. For policy design, California should round that to a dedicated 0.5 percentage-point statewide sales-tax increment for the basic-care fund, which would raise about $4.5 billion per year and leave a modest cushion for reserve build and utilization variance.

That is the clean proposal this framework should carry: universal basic care in California should be financed with roughly half a cent of statewide sales tax, while private coverage and Medi-Cal remain primary where they already apply.

Reserve policy

Because a sales-tax stream can weaken during downturns, the basic-care fund should maintain a reserve floor sufficient to prevent payment disruption and abrupt reimbursement shocks.

The framework should state the principle clearly:

• the fund should maintain a minimum operating reserve
• reserve drawdowns should be visible and rule-governed
• reimbursement for covered basic-care services should not become unstable simply because the business cycle turns

Conclusion

Universal basic care works only if it stays narrow, clear, and honest about its limits.

This framework does not promise to make every form of healthcare free. It promises a real universal baseline for ordinary life: primary care, prevention, maternal care, pediatric basics, routine mental health, routine chronic management, urgent outpatient care, and a limited generics-only drug layer. It leaves emergency, hospital, specialty, and other high-acuity costs outside the baseline rather than hiding them inside an unsustainable promise.

That is the standard the document should hold: California should guarantee ordinary care universally, use existing private and Medi-Cal financing first where they already apply, and stop pretending that the same baseline must also carry the full burden of specialty and hospital finance.

Open Questions

This document still leaves two kinds of work ahead.

Remaining policy choices

• what exact services and CPT/HCPCS code families belong in the final clinical definition of basic care, and how California should work with the AMA and clinical stakeholders to finalize that covered-code list
• which outpatient generics belong on the final essential list
• how the state should set and periodically revise the California adjustment factor above Medicare
• what reserve ratio should govern the basic-care fund
• how private-insurance and Medi-Cal primary-payment rules should be standardized so the patient still sees one universal basic-care experience

Implementation work

• how the basic-care fund should be sized once the state is funding residual basic-care liability rather than paying the full gross basket first
• how California should report access, participation, continuity, administrative simplicity, fiscal durability, and quality once the program is operational
• whether and how California should eventually capture part of the private-insurance savings created by the basic-care layer without making this document depend on that assumption

Appendix: Evaluation Metrics

If California implements basic care, it should publish a small public scorecard that keeps attention on whether the baseline is actually working. The most important measures are:

• access: median days to primary-care and urgent outpatient appointments, and geographic access to participating sites
• participation: participation rates for physicians, physician assistants, nurse practitioners, clinics, and sites
• continuity: share of patients with a usual source of care and follow-up rates for urgent visits and chronic care
• simplicity: claims adjudication time, denial rate, prior authorization rate, provider burden, and complaint rates
• fiscal durability: per-member spending, spending growth, administrative overhead, and reserve adequacy
• quality: preventive completion, maternal quality indicators, continuity measures, and substantiated provider-quality complaints

References

[1] California Department of Finance, E-1 2025 Press Release, May 1, 2025. California population reached 39,529,000 as of January 1, 2025. https://dof.ca.gov/media/docs/forecasting/Demographics/estimates/E-1_2025_Press_Release.pdf

[2] California Health Care Access and Information, March 2025 OHCA Board Meeting Presentation, primary-care claims and patient counts for 2018-2022. https://hcai.ca.gov/wp-content/uploads/2025/03/March-2025-Board-Meeting-Presentation.pdf

[3] California Health Care Foundation, Investing in Primary Care: Why It Matters for Californians with Commercial Coverage, April 2022; and Primary Care Spending, including Medi-Cal findings. These sources anchor the estimate that primary care spending in California remains below the state's newer 15 percent benchmark and support the view that stronger primary-care investment can reduce more expensive downstream use. https://www.chcf.org/wp-content/uploads/2022/04/InvestingPrimaryCareWhyItMattersCommercialCoverage.pdf and https://www.chcf.org/resource/primary-care-matters/primary-care-spending/

[4] California Health Care Access and Information, Behavioral Health Spending in California's Commercial Market, showing behavioral-health spending shares and the importance of outpatient professional services and prescription drugs within routine mental-health care. https://hcai.ca.gov/visualizations/behavioral-health-spending-in-californias-commercial-market/

[5] California Department of Public Health, Title V Maternal and Child Health Block Grant page. California reported about 400,129 annual births and 40.7 percent Medi-Cal-paid deliveries in the current planning material. https://www.cdph.ca.gov/Programs/CFH/DMCAH/Pages/Title-V-Block-Grant-Program.aspx

[6] California Health Care Access and Information, Healthcare Payments Data (HPD): Fee-For-Service Drug Costs in California, showing more than $51.1 billion in statewide pharmacy spending in 2022. https://hcai.ca.gov/visualizations/healthcare-payments-data-hpd-fee-for-service-drug-costs-in-california/

[7] U.S. Food and Drug Administration, remarks by Commissioner Robert Califf, September 13, 2023. Generics represented about 91 percent of prescriptions filled while accounting for about 18 percent of prescription-drug spending. https://www.fda.gov/news-events/speeches-fda-officials/remarks-commissioner-califf-advancing-generic-drug-development-translating-science-approval-workshop

[8] California Department of Health Care Services, Annual Medi-Cal Drug Cost and Rebate Report, SFY 2023-2024. Gross prescribed-drug expenditures were about $15.18 billion before rebates, with roughly $6.72 billion in rebates. https://www.dhcs.ca.gov/provgovpart/pharmacy/Documents/PBD-Annual-Report-on-Drug-Costs-2023-24.pdf

[9] California Health Care Access and Information, Office of Health Care Affordability, Baseline Report: Health Care Spending Growth Trends in California, 2022-2023, published June 5, 2025. This report anchors the broader statewide spending, claims, non-claims, and market context used to size overlap and administrative burdens. https://hcai.ca.gov/wp-content/uploads/2025/06/Baseline-Report-Health-Care-Spending-Growth-Trends-in-California-2.pdf

[10] California Department of Tax and Fee Administration, Pub. 41A, FY 2023-24, and statewide sales-tax rate guidance. FY 2023-24 revenues imply a taxable-sales base of roughly $896.6 billion, so one statewide sales-tax point yields about $9.0 billion annually. https://cdtfa.ca.gov/formspubs/pub41a.pdf and https://www.cdtfa.ca.gov/taxes-and-fees/sales-use-tax-rates.htm

[11] William H. Shrank, Teresa L. Rogstad, and Natasha Parekh, Waste in the US Health Care System: Estimated Costs and Potential for Savings, JAMA 322, no. 15 (2019). Used here as a benchmark for fraud, abuse, and administrative-waste sizing rather than as a California-specific direct measure. https://jamanetwork.com/journals/jama/fullarticle/2752664

[12] American Medical Association, CPT licensing frequently asked questions (FAQs). The AMA states that it holds the copyright to CPT and that use of CPT content requires an appropriate license. https://www.ama-assn.org/practice-management/cpt/cpt-licensing-frequently-asked-questions-faqs

[13] Centers for Medicare & Medicaid Services, License for Use of Current Procedural Terminology, Fourth Edition ("CPT"). CMS states that the scope of CPT licensing is determined by the AMA as copyright holder. https://www.cms.gov/license/ama