Tax-Doubling Universal Health Care Bill ‘AB 1400’ Passes Assembly Appropriations Committee in California: ‘CalCare’

Nearly $400 billion-dollar single-payer health care system in California receives approval, setting the bill up for debate on the Assembly floor next week.

QUICK FACTS:
WHAT THE BILL SAYS:

“This bill, the California Guaranteed Health Care for All Act, would create the California Guaranteed Health Care for All program, or CalCare, to provide comprehensive universal single-payer health care coverage and a health care cost control system for the benefit of all residents of the state. The bill, among other things, would provide that CalCare cover a wide range of medical benefits and other services and would incorporate the health care benefits and standards of other existing federal and state provisions, including the federal Children’s Health Insurance Program, Medi-Cal, ancillary health care or social services covered by regional centers for persons with developmental disabilities, Knox-Keene, and the federal Medicare program. The bill would require the board to seek all necessary waivers, approvals, and agreements to allow various existing federal health care payments to be paid to CalCare, which would then assume responsibility for all benefits and services previously paid for with those funds.”

WHAT SUPPORTERS OF THE BILL ARE SAYING:
  • Supporters of AB 1400 argue 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, a Democrat from San Jose, as well as the bill’s principal author, said during a hearing in the Assembly Health Committee last week, per Center Square.
WHAT THE OPPOSITION IS SAYING:
  • Republican Assemblyman and vice chair of the Assembly Committee on Budget Vince Fong from Bakersfield said, “Disregarding the estimated $391 billion price tag, Sacramento Democrats pushed a government-run health care system to the next step,” adding, “With so many unanswered questions remaining, this proposal remains fiscally irresponsible and poor public policy.”
  • A coalition of the California medical and hospital associations, insurance companies, and business groups released a statement saying that AB 1400 would “immeasurably disrupt the healthcare that millions of Californians rely on every day, and at the worst possible time, as [the] Omicron [coronavirus variant] surges to unprecedented levels and the pandemic shows no sign of slowing,” according to a local San Francisco newsroom.
WHAT HEALTH EXPERTS SAY:
  • Candy Newberry, who is part of the National Association of Health Underwriters (NAHU) and the Orange County Association of Health Underwriters (OCAHU), told American Faith that she “totally” disagrees with Assemblyman Kalra’s representation of AB 1400 lowering costs for taxpayers.
  • “First, our government is never accurate in estimating budgets,” Newberry said. “Insurance companies, who do have good actuarial ability don’t know the true costs of COVID. Studies begin a year after claims, so 2021 costs begin to be studied beginning March 2022, after all claims from 2021 have been adjudicated.”
  • “Secondly, no one can know the true number of ‘residents’ including residents not legally living in California. Only taxpayers pay taxes!” she went on to say.
  • AB 1400 would be “mandatory for all, with no exceptions, and would include new taxes for businesses earning more than $2,000,000, additional employer taxes, employee taxes, and new state income taxes. It would also take away employer tax deductions and individual tax deductions, causing everyone to pay more,” Newberry stated.
  • Newberry also mentioned how senior citizens living on a fixed budget or currently on Medicare, would suffer “a substantial tax increase, lose out on Medicare, and now have an additional new tax.
  • She then pointed out how California officials already govern the DMV, “and we see how poorly they manage that,” adding that, “Californians already have some of the highest vehicle licensing with many additional gas taxes.”
  • Finally, Newberry warned that “quality of patient care would decrease” under CalCare, and how “good doctors would leave our state.”
BACKGROUND:
  • The universal health care proposal comes in two pieces of legislation: the first (AB 1400) contains the policy to create CalCare, while the second (Assembly Constitutional Amendment 11) outlines the funding mechanism, Center Square notes.
  • Both pieces of legislation need to be passed individually. If one does not pass, neither measure will be considered. If AB 1400 is approved, ACA 11 would be considered separately and require a two-thirds vote in each chamber to pass. It would then go to voters for approval. Should one fail, neither measure will be implemented.
  • ACA 11 will fund CalCare by raising taxes for individuals making more than $149,500 per year (with incremental increases of up to 2.5% depending on income level), but also by levying additional payroll taxes on businesses based on size, imposing a 2.3% excise tax on gross receipts exceeding $2 million, according to Center Square.
  • CalTax, the nonprofit California Taxpayers Association, said ACA 11 would be the largest tax increase in state history, an increase of $163 billion annually.