California’s universal healthcare proposal with $300 billion price tag clears another hurdle

A proposal to create a single-payer health care system in California received a key approval that will set the bill up for debate on the Assembly floor next week.

The Assembly Appropriations Committee passed Assembly Bill 1400 on Thursday, which would create a government-funded health care system in California known as “CalCare.” The proposal would expand medical coverage to all California residents under a single-payer structure.

According to a fiscal analysis by the Assembly Appropriations Committee, the bill could cost California between $314 billion to $391 billion in health care spending annually – a total that eclipses Gov. Gavin Newsom’s entire budget proposal of $286 billion for the coming fiscal year. Supporters of the proposal, however, say that a universal health care system would cost less than what California workers and employers currently pay for private insurance.

“With CalCare, we have the opportunity to move California to a single-payer system of pay for health care services – a system that countless reputable academic studies have concluded time and again will save our state tens of billions of dollars a year in health care costs,” Assemblyman Ash Kalra, D-San Jose and the bill’s principal author said during a hearing in the Assembly Health Committee last week.

With approval from the Appropriations Committee in hand, the bill next needs approval on the Assembly floor. Because AB 1400 was initially introduced in February 2021, it must pass the Assembly by Jan. 31 to meet legislative deadlines and stay alive.

The proposal will likely spark debate when it is heard in the Assembly, particularly among legislators who raised concerns about the cost of the system on Thursday.

“Disregarding the estimated $391 billion price tag, Sacramento Democrats pushed a government-run health care system to the next step,” Assemblyman Vince Fong, R-Bakersfield and vice chair of the Assembly Committee on Budget, said Thursday. “With so many unanswered questions remaining, this proposal remains fiscally irresponsible and poor public policy.”

The universal health care proposal comes in two pieces of legislation – one that contains the policy to create CalCare, and the other is the funding mechanism. AB 1400 outlines the procedure for single-payer health care, while another bill, Assembly Constitutional Amendment 11, would implement the new taxes.

Kalra unveiled ACA 11 earlier this month, which would fund universal health care by raising taxes for certain individuals and businesses. According to the proposal, the plan would raise taxes for individuals making more than $149,500 per year, with incremental increases of up to 2.5% depending on income level. The proposal would also levy additional payroll taxes on businesses based on size and impose a 2.3% excise tax on gross receipts exceeding $2 million.

When ACA 11 was announced, the nonprofit CalTax said it would be the largest tax increase in state history, culminating in an increase of $163 billion annually.

If AB 1400 is approved, ACA 11 would be considered separately by lawmakers and requires a two-thirds vote in each chamber to pass. It would then go to voters for approval. Should one fail, neither measure would be implemented.

Kalra told the Assembly Health Committee last week that, if passed, the universal healthcare program likely wouldn’t be fully implemented until 2024 at the earliest.

This article was originally posted on California’s universal healthcare proposal with $300 billion price tag clears another hurdle

Leave a Reply

Your email address will not be published. Required fields are marked *