California Taxes, Legislative Update

Lawmaker Revives Effort to Create Single-Payer Healthcare Program in California

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Assembly Member Ash Kalra announced February 7 that he is reviving his effort to create a single-payer healthcare program in California, and he introduced legislation that would do so – but doesn’t specify who would pay for the hundreds of billions of dollars in new costs.

The San José Democrat’s bill, AB 2200, would establish the California Guaranteed Health Care for All Program (CalCare) with a nine-member board responsible for seeking federal waivers and approval to allow existing federal health care payments to be paid to the new state program instead. The bill would prohibit medical providers from billing or entering into a private contract unless specified conditions are met, among other things.

The majority-vote bill includes a vague reference to the potential for tax increases, stating: “It is the intent of the Legislature to enact legislation that would develop a revenue plan ….”

The proposal is not feasible, CalTax President Robert Gutierrez said, noting that the estimated annual cost for a single-payer system would be more than Governor Gavin Newsom’s proposed $291 billion budget for 2024-25 for the entire state government, including schools, prisons, highway construction, courts, assistance programs, and every other state program.

“The last time this idea was floated, the estimated cost was more than $400 billion a year,” Gutierrez said. “The costs have only increased since then, while tax revenue is down and the state budget has gone from a large surplus to a large deficit. Simply put, the numbers don’t add up for this proposal.”

Kalra stated in a press release that “a single-payer system will cost less overall than our current system and will significantly slow the growth of health care costs over time, saving billions each year.” The release also claimed that a single-payer system “could boost economic growth by eliminating future medical debt, allowing greater freedom to change jobs, and more.”

Kalra’s bill is sponsored by the California Nurses Association (CNA), a union that harshly criticized the lawmaker in 2022 after he decided not to push for an Assembly floor vote on the prior version of the legislation (AB 1400) and said the CalTax-opposed bill was “double digits” short of the 41 votes needed to clear the Assembly.

Republican Senator Brian Dahle predicted problems in the event the bill becomes law.

“This will be disastrous, and patients will die while waiting for care,” Dahle wrote in a social media post that included a reference to the Employment Development Department’s struggles to administer the unemployment insurance program. “Imagine a fiasco EDD-style state department telling you what medical procedures you are worthy enough to receive.”