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Calling the Democrats’ new universal healthcare legislation “bold” is an understatement. It would be a life-changer for practically every Californian.
It also would require by far the largest state tax increase in history.
Some powerful opponents will call it “socialist.” But aren't Social Security and Medicare socialist? And they’re among the most popular government programs in America.
Some supporters are hailing it as a California version of federal “Medicare for all.” But really it’s Medicare for nobody. Californians on Medicare would be shifted into the new state-run “CalCare.”
No more Medicare in the nation’s most populous state. Nor Medi-Cal, the California version of Medicaid insurance for poor people. And private healthcare insurance would essentially be out of business. Everyone would be transferred into CalCare.
As advertised by CalCare proponents, most Californians would be better off under the new state plan: “No premiums, copays or deductibles … or other out-of-pocket costs.”
But more benefits: “Including all primary and preventative care, hospital and outpatient services, prescription drugs, dental, vision, audiology [hearing aids], reproductive health services, maternity and newborn care, long-term services and … mental health and substance abuse treatment, laboratory and diagnostic services, ambulatory services and more.
“Patients will have freedom to choose doctors, hospitals and other providers … without worrying about whether a provider is ‘in-network.’”
Sounds like a late-night TV commercial for wonder pills.
The assumption is that Sacramento can manage such a massive endeavor. There’s plenty of reason to be skeptical.
“I look forward to hearing Democrats explain how they plan to successfully take over more than 10% of the state’s economy when in the last decade they’ve proven themselves incapable of simple things like building a railroad, providing clean drinking water, keeping the lights on and filling potholes,” says Assembly Republican Leader Marie Waldron of Valley Center in San Diego County.
Even a major Democratic supporter, Assembly Health Committee Chairman Jim Wood of Healdsburg in Sonoma County, has similar concerns.
“When you look at California, especially with COVID, clearly you see things that are not working very well,” Wood told me.
“I’ve always been supportive of healthcare for everyone,” the dentist added. “But I have serious and legitimate concerns about how an entity like this would be governed. I just worry whether we have the capacity to manage this.”
Wood cited as a glaring example of mismanagement the state Employment Development Department, which dished out several billion dollars in fraudulent unemployment benefits early during the pandemic, including to people in prison.
But state government is a mixed bag, Wood continued. He praised Covered California, which operates an expanded version of the federal Affordable Care Act, as “a model for the country.”
He also called federal Medicare “a well-run system.”
“Doctors and hospitals don’t like Medicare because the rates are lower,” Wood said. “But recipients on Medicare like it.”
And California would be leaving it.
Wood is ready to chuck current private insurance.
“There’s so much emphasis in the healthcare industrial complex on profits that many times the best interests of the patient get lost,” he said.
One thing is indisputable: Paying for this endeavor would require an unprecedented tax hike — $163 billion annually, according to opponents.
That’s after Washington is talked into surrendering to CalCare all the money the feds currently are spending in California on Medicare, Medicaid and other healthcare programs.
There’d be a broad array of new taxes on businesses and employees, including personal income taxes — in a state that already has the nation’s highest levies.
Not only that, but future tax hikes to fund CalCare could be approved on a simple majority legislative vote. Any tax increase now requires a two-thirds vote.
“This measure would add to the cost of living in California and lead to job loses,” asserted Robert Gutierrez, president of the California Taxpayers Assn. “Californians have been taken to the cleaners before by expensive measures that promised the world but didn’t deliver.”
Like with the bullet train.
Both the CalCare bill, AB 1400, and tax hike constitutional amendment, ACA 11, were introduced by Assemblyman Ash Kalra (D-San Jose) and originated with the politically powerful California Nurses Assn.
They contend that even with the higher taxes, Californians would pay less overall and get more benefits because there’d be no need to pony up for insurance company profits.
“We have the most expensive medical system in the world and have the worst outcomes of any industrial nation,” Kalra says. “The bottom line is that the wealthiest state in the wealthiest nation on Earth should join other nations in assuring healthcare for everyone.”
That will require a heap of convincing — not only in the Legislature, but among the voters, who must approve the tax increases.
Don’t be surprised if the tax legislation is quietly shelved for a while. Not even Democrats are anxious to vote for a tax hike during an election year when they’ll be running in new districts that have just been remapped.
Look for the taxes to be voted on next year. If passed, they’d be placed on the 2024 presidential election ballot when there’ll be a large turnout that traditionally benefits Democratic causes.
But the “single payer” healthcare bill faces a rush deadline in the Assembly. Under legislative rules, it must be sent to the Senate by Jan. 31. It probably will be. Then there’ll be a battle over final passage in August.
Gov. Gavin Newsom presumably would sign it. But the measure couldn’t take effect until the taxes are approved.
CalCare faces an uphill fight. The odds against it are steep.
But this is a debate worth having — unlike with most bills in Sacramento.
This story originally appeared in Los Angeles Times.