Sen. Wiener’s Universal Health Care Bill Passes Assembly: How Much is Too Much?

Universal health care rears its ugly head once again in California. At a time when any Health care reform proposals should be a patient-centered, market-based alternative that empowers individuals to control the dollars and decisions regarding their health care, Sen. Scott Wiener (D-San Francisco) instead has been pushing a state-run healthcare system financed by taxpayers, that covers the costs of healthcare for all residents by a single public system.

According to Sen. Wiener, Senate Bill 770 “takes tangible steps on a concrete timeline toward achieving universal, more affordable healthcare in California by requiring the CHHSA Secretary to: pursue waiver discussions with CMS to facilitate the creation of a unified healthcare financing system; establish a workgroup of healthcare system stakeholders appointed by the Governor, Speaker of the Assembly, and President Pro Tempore of the Senate; provide quarterly reports to the chairs of the Assembly and Senate Health Committees on the status and outcomes of waiver discussions with the federal government and the progress of the workgroup; and to submit a complete set of recommendations regarding the elements to be included in a formal waiver application, as specified, by no later than June 1, 2024.”

What happened to Democrats’ beloved Covered California? I thought that was supposed to provide health coverage for every Californian. And now we have immigrant universal health care coverage for those in the state illegally, at an estimated cost of about $98 million annually.

We’ve been down this treacherous path, and the costs are unsustainable.

As the Globe reported last year, Assembly Bill 1400, the “Guaranteed Health Care for All” state-run healthcare bill, which kicked around the Assembly for several years, was heard and passed in the Assembly Rules Committee, but died in committee. The Tax Foundation reported “this will increase taxes by $12,250 per household, roughly doubling the state’s already high tax collections, to fund a first-in-the-nation single-payer health-care system.”

Previous statewide single payer healthcare proposals elicited estimates of more than $400 billion to implement. At the time, the entire 2022-23 state budget proposal was $286 billion – currently the actual state budget is $330 billion.

“The top marginal rate on wage income would soar to 18.05 percent—nationally, the median top marginal rate is 5.3 percent—and the state would adopt a new 2.3 percent gross receipts tax (GRT), at a rate more than three times that of the country’s highest current pure GRT,” the Tax Foundation reported.

“All told, the new tax package is intended to raise an additional $163 billion per year, which is more than California raised in total tax revenue any year prior to the pandemic.”

Tax Foundation explains the new taxes would take three forms:

1. Surtaxes atop the current individual income tax structure beginning at $149,509 in income;
2. A graduated-rate payroll tax system with the top rate kicking in for employees with more than $49,990 in annual income; and
3. A gross receipts tax of 2.3 percent, excluding the first $2 million of business income.

Here is more about SB 770 from Sen. Scott Wiener, tone deaf to previous cost estimates or staggering tax increases:

“With the newly strengthened requirements of SB 770, California will take a major step toward universal healthcare,” said Senator Wiener. “The bill now requires our state health agency to issue a legal roadmap for how we can secure federal funding for single payer, or a similar universal healthcare system. Knowing what our options are will allow lawmakers to proceed in enacting such a system, bringing us closer to universal healthcare than we have ever been before.”

“The Healthy California For All Commission was established by Senate Bill 104 (Chapter 67, Statutes of 2019), and convened by Governor Newsom in December 2019. It issued its final report in April of 2022. The report found that ‘unified financing’ would avert 4,000 deaths per year and save California $158 billion in public healthcare spending by 2031 and that, in total, the state’s residents would incur an additional $500 billion in inflationary medical costs over the next decade unless unified public healthcare financing is implemented.”

The report summarizes the characteristics of the new “unified financing” system as:

• All California residents will be entitled to receive a standard package of health care services;
• This package could include Long Term Care Support and Services, which would relieve huge and growing burdens that are falling on millions of families;
• Entitlement will not vary by age, employment status, disability status, income, immigration status, or other characteristics; and
• Distinctions among Medicare, Medi-Cal, employer-sponsored insurance, and individual market coverage will be eliminated within the system of unified financing.

SB 770 is sponsored by the Healthy California Now Coalition, a broad coalition of labor unions, health advocates, and civil rights advocates.