CalCare: Single-payer health care in California still years away

There are many questions about a system that would move everyone in California off their current plans and onto a single plan.

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Wednesday, January 26, 2022
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A plan to bring single-payer health care to Californians is moving forward, but what's the timeline? Here's what's in store.

CALIFORNIA (KABC) -- A plan to bring single-payer health care to Californians is moving forward and supporters of the idea say the current health care system is broken and needs to be fixed.

"After nearly eight years of trying to make health care work for all Californians, something has to give," said Assemblyman Jim Wood, Santa Rosa (D), at an assembly health committee meeting earlier this month. "Just maybe, single-payer health can be the catalyst for that change."

But there's a long way to go, and there are many questions about a system that would effectively move everyone in California off their current health care plans and onto a single plan run by the state called CalCare.

It would even move those using Medicare to the proposed CalCare plan.

"You don't get Medicare anymore if you live in California," said Assemblyman Jordan Cunningham, San Luis Obispo (R), who voted against moving the proposal out of committee. "It's an untested, untried, experimental system in a state that brought you $20 billion in fraud at the EDD recently."

Others skeptical of the a single-payer health care system said the state should focus more on making changes to the current Medi-Cal system rather than starting something completely new.

"Why not work on streamlining, improving and fixing Medi-Cal so that more people can access it rather than scrapping the whole system and starting over," said Assemblywoman Marie Waldron, Escondido (R).

If approved by the state legislature, AB 1400 would allow every resident of California - regardless of immigration - status, to enroll in CalCare.

There would be no cost to enroll, nor any responsibility for members for any out-of-pocket costs for covered services.

A nine-person board would be appointed by Gov. Gavin Newsom and other politicians to run CalCare and set pay rates and fee structures. But one of the major questions remains: How will the state pay for it?

"It isn't free," said Assemblyman Freddie Rodriguez, Pomona (D). "Somehow, it has to be paid for."

According to a summary of AB 1400 by the state committee on health, the total estimated cost of health care in California this year will be approximately $517 billion. About $295 billion is paid for with state, local and federal taxes (for example, the money withheld from a paycheck for Medicare.)

The remaining $222 billion will be paid by employers, insurance companies and out-of-pocket costs paid by patients. But if a single-payer health care system is implemented, those costs would have to instead be paid for by raising taxes.

That's where a second proposal comes into play: Assembly Constitutional Amendment 11, which would have to be approved by voters.

ACA 11 would raise taxes on both businesses and individuals.

It includes a 2.3% tax on businesses that gross more than $2 million annually in revenues, a 1.25% payroll tax on businesses with more than 50 employees, and an additional 1% tax on businesses where employees make more than $49,900 annually.

Individuals making more than $149,509 in taxable income would see an additional 0.5% tax, with the tax rate progressively increasing to 2.5% of taxable income for those individuals making more than $2.48 million annually.

A vote on ACA 11 likely wouldn't take place for another two years.

Even if it passes, the state assembly committee on health suggests it would only raise an additional $163 billion, which they say is significantly less than the actual need.