Is AB 1400 the single payer panacea for all Californians?
SAN DIEGO, January 18, 2022– With the passage of California’s Assembly Bill AB 1400 which permits the creation of a single-payer health care system for all Californians, there is still much debate and due diligence occurring ahead.
What’s in AB 1400?
Also known as “The Guaranteed Health Care Act for All” hereinafter “CalCare”, and by Lead Authors Assembly Persons Kalra and Santiago, it would establish a 9-person executive board to oversee a newly formed state run independent public entity responsible for billions of dollars and millions of lives.
This would also constitute an Act to Title 23 (commencing with Section 10060) to the Government Code relating to health care coverages while making it an appropriation.
There is no doubt that the 60 plus age cohort which is growing 3 times greater than other age groups, coupled with the decades-old problem of the uninsured, have propelled this action and concern.
By pooling vast California health care funding sources, which includes MediCal, Medicare, and more, the intent of CalCare is to provide all residents and non-citizens with readily available health care, social services including mental health and long-term care services which provide single points of entry, healthier populations, equality in care and are non-discriminatory.
“We’ve got a state that can’t issue driver’s licenses effectively through the DMV, and we’ve got a state that can’t issue unemployment checks properly through the EDD….”
-Assemblyman Jordan Cunningham
There are many sides of this critical issue that deserve attention.
The implementation of CalCare is a reallocation of health care resources throughout California which could move in the direction of seeking the lowest cost, whether in health care, medical care, pharmaceuticals, personnel, equipment, supplies, facility, and more–which could be adverse to quality.
Providers of health care services could very well end up working with unprecedented low-profit margins, reducing the incentive to work in an industry already problematic with known staff shortages, reducing research and development, use of antiquated and/or inferior technology–ultimately impacting quality of health care and perhaps affecting lives.
“With today’s vote, California is one step closer to ending Medicare for California seniors, eliminating people’s existing health plans, imposing devastating middle-class tax increases and rationing care.”
-Assemblywoman Marie Waldron
Now that AB 1400 has passed, and without any language relative to authenticating costs, ACA 11 was introduced to fund CalCare which would ensure tax revenues to cover all the costs without affecting the Gann Limit.
Though it is proposed to have AB 1400 be reviewed by the non-partisan Legislative Analyst’s Office, the following are approximate highlights of the ACA 11 proposal:
An annual excise tax of 2.3% with gross annual revenue above 2 million.
Employers with 50 or more employees, a payroll tax rate of 1.25% on wages and other compensation.
Employees who earn more than $49,000 annually in wages and compensation a 1% payroll tax.
Personal Income Tax for incomes above $145,000 annually will be charged specific marginal tax rates adjusted for inflation.
When one considers Medicare alone, with the 60+ cohort contributing into the system with hard-earned payroll deductions, it would seem unlikely that this group of beneficiaries would wish to participate in CalCare–if given a choice.
Moreover, other preexisting health care systems which help low-income and at-risk populations are also in place.
“ACA 11 is the funding source to AB 1400. When they realize they don’t have enough money to pay for this, they can raise taxes on everyone….But anything fiscal has to be a majority 2/3 vote.”
-Assemblyman Heath Flora
And, of course, the final vote is from the citizens of California.
The spirit and intent of integrating all funding sources to streamline fiscal and programmatic inconsistencies known in healthcare today, and made far worse by the advent of COVID, is good in that the issue of affordability and access is a conversation of a very public nature, which is very behind its time.
What is difficult is finding a middle ground i.e., when policy-making has balance, common sense, and is not disruptive to what is already working.
We also need to ensure quality physicians, nurses, health care workers and others that are critically needed to work in hospitals, facilities, and in private homes.
And we need to encourage research and development on many levels and for many human needs.
This crisis has been looming for decades, and COVID has showcased our weakness in addressing unresolved health care issues.
Programs such as CalSavers could provide a model for helping the uninsured in California.
As the State of California managed, voluntary retirement system, CalSavers permits employees to decide how much they want to save for the future. Offered by an employer, the State fully informs each employee relative to the benefits and contribution levels available; and, it is portable to other places of employment.
Also, it is positive to provide viable incentives for persons to get back to work and off the unemployment lines, as more is learned about how it may be possible to provide for themselves and their families. And, it does not negatively impact private and other retirement systems.
“Where does the money come from? ACA 11 would provide the funding-or rather, taxpayers would. New excise taxes, payroll taxes, and personal income taxes in excess of $163 Billion per year would be necessary. People are already fleeing California-And this would add to the exodus.”
–Assemblywoman Marie Waldron
With ideas on the proverbial public table, and legislators hard at work, the voter will ultimately determine the outcome of their State health care system. Including the quality of services and care they will receive and how they want to pay for it.
Until next time, enjoy the ride in good health!