Universal healthcare in California reportedly funded by new taxes

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California would adopt a comprehensive universal health care plan, the first in the country, under a proposal unveiled Thursday by a group of Democratic lawmakers in the state, providing health services to every resident and funded by a wide range new taxes on individuals and businesses.

Although some of the policy details of the ambitious plan were exposed last year, how it would be funded had not been determined. The proposal, now presented in separate pieces of legislation, faces significant hurdles in the coming months – first on the State Capitol, with opposition from groups representing doctors and insurance companies, and then possibly at the polls because voters are expected to approve taxes in an amendment to the California Constitution.

“There are countless studies that tell us that a single-payer healthcare system is the fiscally sound thing to do, the smartest healthcare policy to follow, and a moral imperative if we care about human life,” Assembly member Ash Kalra (D-San Jose) said, the proponent said on Thursday.

Efforts to create a single-payer health care system, in which the medical expenses of all residents are covered by a government-run fund, have been widely debated in California for years. Proponents say the cost of caring for state residents would decline without the administrative expenses of private insurance plans.

They also point to the costs faced by Californians under lean health care plans with high deductibles and co-payments – the costs, they say, will disappear if California creates a state-run program that mixes them up. state and federal dollars.

“What we’re trying to do is get rid of those dozens of buckets of funding – whether it’s private insurance, whether it’s the employer, whether it’s Medi-Cal – put them in one bucket. “said Kalra.

Legislative efforts to advance the idea have fizzled out in recent decades, lacking the broad political support needed for a historic overhaul of the healthcare system. Kalra’s latest effort was quickly criticized by a coalition of powerful political actors, including the California Medical Assn. and the California Hospital Assn. They will face one of the single-payer system’s most vocal advocates, the California Nurses Assn.

House Bill 1400 would create “CalCare,” a system governed by an independent board of directors that promises access to any physician, regardless of network, and to a wide variety of medical services. The new entity would push to align payments to providers more with the costs of care and seek to negotiate lower prices for prescription drugs. The plan includes coverage for long-term care and services for the elderly and people with disabilities, and would remove barriers based on the patient’s immigration status.

Thursday’s announcement will undoubtedly trigger a contentious process, perhaps complicated by the fact that this is an election year. Gov. Gavin Newsom, who faces re-election in the fall, campaigned four years ago in part to support a single-payer health care system.

“It’s about access,” Newsom said in a speech at the 2018 California Democratic Party convention. “It’s about affordability. And it’s about time. orders, we would not have had social security or health insurance. “

A spokesperson for the governor did not immediately respond to a request for comment on the new effort. But Kalra, a Bay Area Democrat who has garnered the support of a group of Democratic lawmakers, reminded those in attendance at a State Capitol event of the governor’s campaign platform on Thursday.

“Doing nothing is not inaction,” Kalra said of political promises that failed to result in a plan. “It is, in fact, the cruelest action as millions of people suffer under our watch.”

The plan’s proposed tax hike could present the most difficult political hurdle: As a constitutional amendment, it would require a qualified majority vote in the Senate and State Assembly, and then ratification. by voters in the statewide June or November elections. While Democrats have held a qualified majority of seats in both chambers for nearly a decade, they have rarely found enough support in their ranks for a large-scale tax hike.

The constitutional amendment would impose a new excise tax on businesses equal to 2.3% of all annual gross revenues in excess of $ 2 million. A new payroll tax would also be created, equal to 1.25% of total annual wages and collected from companies employing 50 or more people. An additional payroll tax would be required for employers whose workers earn more than $ 49,900 per year.

All Californians, except the lowest earners, would also be required to pay more taxes. The proposed constitutional amendment would increase personal income tax on wages above $ 149,509 per year – less for those at that level, more payable as income increases. All Californians reporting annual taxable income over $ 2.5 million would see a new 2.5% surtax. And the personal income tax increases to pay for the health care plan could increase with inflation in the years to come.

The scale and impact of the tax hike will be at the center of the debate. Kalra and other supporters insist taxes will total less than what employers and Californians currently pay for private insurance.

Rob Lapsley, president of the California Business Roundtable, said the proposal would place a financial burden on those battling the economic impacts of the COVID-19 pandemic, and most Californians can currently receive medical treatment when needed. .

“California already has near universal medical coverage,” Lapsley said in a statement. “AB 1400 would eliminate health care options and force everyone to participate in an untested government program. “

The constitutional tax increase was introduced this week, while the AB 1400 was introduced last year. As a 2021 reserve proposal, it must clear the Assembly by January 31. Republicans were quick to rush to the procedural changes Democrats approved Thursday to speed up the bill, which sat for months in the assembly without a public hearing. .

“The majority party in the Legislature has just voted to push forward a radical single-payer bill without independent cost analysis,” said MP Jordan Cunningham (R-Paso Robles), deputy chairman of the Committee on rules of the assembly.

The bill will be considered next week by the Assembly’s health committee. Panel chair, Assembly Member Jim Wood (D-Santa Rosa) said Thursday he would vote in favor of the single-payer plan, a strong indication the measure will receive an Assembly vote where it does not only needs a simple majority to get to the Senate.


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