SACRAMENTO, Calif. (CN) — California Democratic lawmakers on Tuesday jumpstarted a historic overhaul of the state’s health care system, advancing framework for a first-in-the-nation government-run structure that would extend care to all residents through a series of major tax hikes.
By a 11–3 party-line vote, Democrats on the state Assembly Health Committee approved the ambitious health care reform. However, despite the overwhelming result, the bill’s fate remains uncertain as both Democrats and Republicans warned they were planning to reject it if it reaches the Assembly floor later this month.
Assemblyman Jim Wood, chair of the Assembly Health Committee, said previous attempts to improve the private health care industry have fallen short and that it’s time for the state to abandon the longstanding profit-driven model.
“Fixing individual segments of the system and hoping it improves the whole no longer seems to be an effective approach,” said Wood, D-Eureka. “Something has to give, and just maybe single-payer health care can be the catalyst for that change.”
While recent proposals stalled mostly due to a lack of funding, this time supporters are hoping voters will approve billions in new taxes on businesses and the state’s richest earners to implement a single-payer health care system. Backers claim the system-often referred to as universal health care will not only guarantee coverage for all but eliminate the possibility of crippling out-of-pocket costs common in the nation’s most populous state.
Coined the “Guaranteed Health Care for All Act,” Assembly Bill 1400 will create a single-payer program to be administered and overseen by a new state agency known as CalCare. A corresponding nine-member board made up of doctors, nurses, mental health professionals would be appointed by the governor and lawmakers. The bill further mandates at least one board member have private health care industry work experience, one come from a nonprofit agency and one be a labor group representative.
A host of labor unions have joined the California Nurses Association in support of AB 1400, as well as cities like San Jose, Sacramento, and Long Beach. They say the system will trim existing administrative costs, coalesce the state’s buying power and reduce labor union strikes that often stem from disputes over health care benefits.
“Profit motives and financial incentives would no longer determine care, rather decisions under CalCare would be based on patient need,” said Carmen Comsti, policy specialist for the nurses association.
The bill by Democratic Assemblyman Ash Kalra outlines the transition to a publicly financed, single-payer system while an accompanying measure would act as the primary funding mechanism. The former requires majority approval in both the Assembly and Senate and must be signed off by the governor.
Though Tuesday’s vote signals early support for universal health care among some Assembly Democrats, selling the corresponding tax raise to the rest of the Legislature — and taxpayers — remains thorny at best.
To implement AB 1400, Kalra wants to raise excise and payroll taxes for state businesses, as well as increase personal income taxes for workers making over $149,509 per year. The constitutional amendment requires two-thirds support in both chambers plus majority approval from voters to become law.
Democrats hold a supermajority in both houses but approving new taxes could prove to be tricky: the California Taxpayers Association predicts Kalra’s legislation would increase tax collections by $163 billion per year. In recent years, the moderate faction of the party has been reticent to raise taxes and it could be even more wary in an election year.
During the nearly seven-hour committee hearing, multiple Democrats said they were uncomfortable approving the policy bill before taking up the funding mechanism.
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