California Legislature
May 22, 2017, 11:15 a.m.
Reporting from Sacramento - LA Times
Single-payer healthcare could cost $400 billion to implement in California
Melanie Mason
A single-payer healthcare system in California — a
galvanizing cause among the state's progressive flank — would cost $400
billion annually, according to a legislative analysis released on Monday.
The analysis, released in advance of the proposal's hearing in a key fiscal
committee, fills in what has so far been the biggest unanswered question
concerning the plan to dramatically overhaul California's healthcare
coverage.
The analysis found that the proposal would require:
- A total cost of $400 billion per year to cover all healthcare and
administrative costs.
- Of that, $200 billion of existing federal, state and local funds could be
repurposed to go toward the single-payer system.
- The additional $200 billion would need to be raised from new
taxes.
The analysis proposes one scenario in which a new payroll tax on
employers — with a rate of 15% of earned income — could supply the new revenue.
But the measure itself does not contain a specific tax proposal, and therefore
would not, at this point, need a two-thirds vote to approve a new tax.
The write-up also notes that a universal healthcare proposal would
likely reduce spending by employers and employees statewide, which currently
ranges between $100 billion and $150 billion annually. Therefore, the total new
spending under the bill would be between $50 billion and $100 billion each
year.
Under the bill, the state would cover medical care for every resident in
California, including those without legal immigration status. Enrollees would
not have to pay premiums, co-payments or deductibles.
The analysis cautions that the single-payer bill, SB 562 by Sens. Ricardo
Lara (D-Bell Gardens) and Toni Atkins (D-San Diego), would required
"unprecedented changes to a mature healthcare system."
"Therefore, there is tremendous uncertainty in how such a system would be
developed, how the transition to the new system would occur, and how
participants in the new system would behave," it notes.