CA Universal Health Care Proposed: Plan Calls For More Taxes

LOS ANGELES, CA — Democratic lawmakers in California on Thursday unveiled proposed legislation to create a state universal health care system that would make the Golden State the first in the nation to cover medical expenses for all residents with government funds.

Both a supermajority in the state Legislature and a majority of voters will have to approve the proposed tax increases needed to fund the single-payer health care system, dubbed "CalCare."

The fraught issue promised to dominate an election year in which Gov. Gavin Newsom is up for re-election, and control of the U.S. House of Representatives will depend on midterm elections in which California has multiple competitive districts.

No state has ever passed universal health care, raising major questions as to whether there is the will for it.

“Despite being the richest country in the world, the United States is still the only country in the developed world without a system of universal health care,” said Assemblymember Alex Lee (D-San Jose), one of the authors of the legislation. “The pandemic has made evident that tying your health care to employment isn't just antiquated, it's dangerous. Now is the time to realize health care is a human right — and California will lead the way with CalCare.”

The CalCare proposal is contained in Assembly Bill 1400 and ACA 11, a proposed constitutional amendment that would be needed to fund the bill.

CalCare authors argued that it will allow access to any doctor and lower prices for prescription drugs with the negotiating power of the most populous state in the nation. It would include long-term care for older people and people with disabilities. The bill aims to bring medical costs in line with care, essentially reducing profits for providers.

The California Medical Association and the California Hospital Association, joined by an insurance industry coalition, oppose the legislation.

“We urge the Legislature to reject this legislation that will risk the health care of the residents of our state when they need it most,” the coalition said in a statement, according to the Sacramento Bee. “Instead, we ask that they focus on ways to achieve affordable universal health care without upending a proven system.”

Anti-tax groups and business associations were also expected to campaign against the proposal, which would be funded by new payroll taxes and higher taxes on high-income earners.

The plan requires a constitutional amendment because it would raise taxes.

• Income taxes would go up for people earning $149,509 a year or more.
• Residents who report annual taxable income of more than $2.5 million would see a new 2.5 percent surcharge, the Los Angeles Times reported.
• Businesses would be hit with a new excise tax equal to 2.3 percent of gross receipts over $2 million, according to the Times.
• A new payroll tax of 1.25 percent would go into effect for businesses employing 50 or more people and for people making more than $49,900 per year.

“AB 1400 and ACA 11 provide Californians a clear understanding of what they can expect from a truly publicly financed, single-payer health care system and allows them to decide for themselves if they are better off paying for the most expensive health care in the world with the worst outcomes of any wealthy nation or guaranteed health care for all with CalCare while reducing overall health care costs,” said Assemblymember Ash Kalra (D-San Jose), one of the bill's authors.

He added: “Those that profit off the immoral status quo may not like it, but I am confident that the vast majority of working and retired Californians will see the benefit of significant cost-savings as we remove debilitating insurance costs, out-of-reach prescription drugs and arbitrarily high hospital fees.”