"Even good health insurance, which I have, does not cover the cost of the care I need to survive," he said.
The bill that advanced on Tuesday would create the universal health care system — CalCare — and set its rules. It cleared the Assembly Health Committee on an 11-3 vote. Republicans voted no, arguing the bill would cost too much and pay doctors and nurses less, potentially worsening a shortage of health care workers.
Assemblymember Ash Kalra, a Democrat from San José and the author of the CalCare proposal, said Tuesday it could be 2024 before the tax increase proposal to pay for CalCare made it to the ballot.
An analysis from CalMatters breaks down the proposed tax increase:
- A 2.3% excise tax on businesses after their first $2 million in income
- A 1.25% payroll tax on employers with 50-plus workers
- An additional 1% payroll tax on wages for resident employees earning more than $49,900
- A progressive income tax starting at 0.5% for Californians earning more than $149,500, up to 2.5% for people making about $2.5 million annually (with rates being adjusted for inflation)
The California Taxpayers Association, which opposes the plan, estimates it would raise taxes by about $163 billion per year.
"If government-run health care becomes law, millions of Californians will flee the state — either to avoid the $163 billion per year in new taxes or to escape the lengthy waits for care that will become the norm," Assembly Republican Leader Marie Waldron said.
Even some Democrats who voted for the bill had sharp criticism for the proposal. Assemblymember Autumn Burke, a Democrat from Inglewood, said advancing the bill without a funding source made a mockery of the process.
"This bill has been sold to my community that it is going to change things now and that it is free. And neither one of those things are true," she said.
Business groups, led by the California Chamber of Commerce, said the government-run health care system would be so expensive that the tax increase still wouldn't be enough to pay for everything. In 2018, California's total health care expenditures totaled $399.2 billion, accounting for 13.2% of the state's gross domestic product, according to an analysis by the Healthy California for All Commission.
"Completely abolishing the current system in face of an unrelenting pandemic by annually taxing Californians hundreds of billions of dollars is not the solution," said Preston Young, a policy advocate for the California Chamber of Commerce.
Kalra, the San José Democrat and author of the proposal, said he knew opponents would focus on how much the plan would cost. But he said that argument distracts from the fact that Californians are already paying "the highest health tax in the world."
"You may refer to it as premiums, deductibles, co-pays, denial of care," Kalra said, saying none of those costs would exist under a universal health care system. "It's clear as day they are being fleeced, and far too many understandably feel helpless about it."
California's health care system is paid for by multiple entities: patients, insurance companies, employers and government. But a universal health care system would be paid for by a single entity — the government, or the "single payer."
A single-payer system has been a staple of California progressive political rhetoric for decades. But it's not been easy to accomplish in a state where most people pay for private health insurance through their jobs. In 1994, voters overwhelmingly rejected a ballot initiative that would have created a universal health care system. Another attempt passed the state Senate in 2017, but it never got a vote in the state Assembly.
Questions about how to pay for a single-payer system have doomed previous plans. In 2011, Vermont enacted the nation's first universal health care system in the country. But state officials abandoned it three years later because they said they couldn't afford to pay for it.