There are just two
days left on the Golden State legislative calendar for lawmakers to consider AB 1400, a bill that would institute a single-payer healthcare system in
California. Since AB 1400 is considered a “holdover proposal” from the previous
legislative session, it must clear the state’s Assembly by January 31.
The bill would
create a new government entity, “CalCare,” overseen by an independent board of
directors, that would theoretically provide health coverage to all
Californians. CalCare would allow any California resident access to any doctor,
regardless of network, and a broad range of medical services. AB 1400 claims
that CalCare would push to decrease provider reimbursement to bring prices more
in line with the “actual” costs of care. AB 1400 also includes long-term care
coverage and services for senior citizens and disabled people, and California
residents would be covered by CalCare regardless of immigration status.
Additionally, the new government program would negotiate prescription-drug
prices on behalf of beneficiaries.
The CalCare Board
would be made up of nine voting members with “demonstrated and acknowledged
expertise in healthcare” and appointed as provided, plus the secretary of
California Health and Human Services or their designee as a non-voting,
ex-officio member. The bill would require the board to convene a CalCare Public
Advisory Committee with specified members to advise the board on all matters of
policy for the single-payer system. AB 1400 would also establish an 11-member
Advisory Commission on Long-Term Services and Supports to advise the board on
matters of policy related to long-term services.
How do CalCare
proponents contend to pay for the program? By introducing a constitutional
amendment that would impose a new excise tax on businesses equal to 2.3 percent
of any annual gross receipts more than $2 million. AB 1400 would also create a
new payroll tax equal to 1.25 percent of total annual wages to be collected
from businesses employing 50 or more people, as well as another payroll tax
that would be required for employers with workers earning more than $49,900 per
year. Regarding personal income tax, the proposed constitutional amendment
would raise taxes on salaries exceeding $149,509 annually. All state residents
reporting an annual taxable income of greater than $2.5 million would see a new
2.5 percent surcharge, and personal income tax increases to pay for the
healthcare plan would likely increase with inflation over time. Overall, the
amendment would raise taxes by approximately $163 billion per year.
Appropriations Committee, which passed AB 1400 onto the general Assembly floor
last week, estimated the annual cost of a state-funded single-payer healthcare
system in the Golden State at between $314 billion and $391 billion, with the funding
coming through taxes and the reallocation of federal funds currently earmarked
for Medicare and Medi-Cal. Now, proponents have just two voting days left to
push the legislation through the Assembly: tomorrow and January 31, the
deadline itself. If the bill fails to advance by then, it will need to be
reintroduced and will likely have greater difficulty passing out of committee a
If you are a health
insurance professional based in California, please contact your state assembly member today and urge them to oppose AB 1400!