Democratic lawmakers on Thursday announced a plan to fund government-run health care for all Californians, setting up a fight over raising taxes over the next month.
The measure would rely on the Legislature passing new taxes on businesses and people making more than $49,900 per year to fund the program.
Supporters of so-called single-payer health care say that, despite higher taxes to pay for the program up front, consolidating health care costs into one government program and moving away from private insurance would save money in the long run.
Gov. Gavin Newsom has said he supports a single-payer health care plan in the past, although he has not backed a plan to put the system in place since taking office.
The California Nurses Association has pushed for a single-payer bill for years and is sponsoring the bill moving this year, Assembly Bill 1400 by Assemblyman Ash Kalra, D-San Jose.
Stephanie Roberson, lobbyist for the California Nurses Association, told supporters at a rally Thursday morning on the steps of the Capitol that the bill will ensure “people are not dissuaded from accessing quality health care because they don’t have the ability to pay.”
“That’s what we’re here to do,” Roberson said. “If we don’t pass this bill, out-of-pocket costs for Californians will continue to sharply rise.”
A coalition of health care groups, including the California Medical Association representing doctors and the California Association of Health Plans representing insurance companies, has come out against the proposal. Single-payer threatens the existence of private insurance companies and would dramatically remake the health care system, prompting fierce opposition from many parts of the industry.
The coalition said the bill “would force every single Californian into a government plan, taking away any choice for anyone who might want to select private coverage or opt out.”
“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 wrote in a statement. “Instead, we ask that they focus on ways to achieve affordable universal health care without upending a proven system.”
Kalra introduced his single-payer health care plan last year without a funding plan. The bill never received a hearing. This year, Assemblyman Jim Wood, chair of the Assembly Health Committee, announced his committee will take up the bill Jan. 11 and that he will vote to advance it.
Wood said he has concerns about the plan, but will vote to move it through the committee because an incremental approach to lowering health care costs hasn’t worked.
“I continue to feel the frustration, desperation and, quite frankly, the anger that many Californians experience in their efforts to access quality and affordable health care,” Wood, D-Santa Rosa, said in a statement. “Trying to fix individual segments no longer seems to be an effective approach. Something’s got to give, so next Tuesday, I’ll be voting for change.”
Wood’s decision gives the bill a shot at passage. To advance to the Senate, the bill will need to pass Wood’s committee by Jan. 14 and the full Assembly by Jan. 31.
The Legislature would have longer to pass the tax plan to fund the program. Taxes, which require a two-thirds vote to pass, are a tough sell in the Legislature, especially in an election year. The taxes Kalra proposes would also need to be approved by voters.
Tax increase difficult sell in election year
A draft of the tax legislation posted Wednesday would tax businesses 2.3% of their income after the first $2 million. It would also impose a 1.25% payroll tax on employers of 50 or more people and an additional payroll tax on wages for California residents over $49,900 per employee.
The measure would add progressive income taxes starting at .5% for people making more than $149,500, up to 2.5% for people making more than about $2.5 million per year.
As written, Kalra’s proposal to increase taxes would allow the Legislature to increase the taxes in the future with a simple majority.
Newsom supported single-payer in 2018 campaign
Legislative staff haven’t yet estimated a price tag for Kalra’s bill. In 2017, Senate staff estimated a single-payer proposal introduced that year would cost $400 billion.
At the rally on the Capitol steps, Kalra called out Newsom’s previous support for single-payer health care.
Newsom campaigned for governor in 2018 supporting single-payer, which won him support and financial backing the California Nurses Association. Since becoming governor, he has not publicly supported bills that would implement the system. He has also not weighed in on Kalra’s bills.
“We can show the rest of the country how to take care of one another and create a health care system that puts patients over profits,” Kalra said. “Will it be easy? Of course not. There’s a reason this has been tried and failed many times before. The status quo is powerful and those who benefit from it are extraordinarily wealthy and influential.”
This story was originally published January 6, 2022 11:14 AM.