Legislators Push Universal Healthcare Bill Despite Funding Uncertainties

California lawmakers have introduced Assembly Bill 2200, which would establish a universal, single-payer healthcare system called CalCare to expand healthcare access.

The Guaranteed Health Care for All Act, authored by Assemblymember Ash Kalra and 21 bill co-authors, envisions a comprehensive healthcare system covering all California residents, regardless of income or employment status.

It would replace existing government healthcare programs such as Medi-Cal, Medicare and private insurance. CalCare would cover various medical services, including preventive care, mental health care, gender-affirming care, dental, vision, prescription drugs and more.

“While there is still a long road ahead to healthcare reform, this major step brings us closer to affirming the fundamental right to healthcare—a right that should not ever be contingent on your job, your wealth, where you live, or where you were born,” said Kalra in a press release.

Under CalCare, patients would no longer receive medical services from private insurers but from state-contracted healthcare providers. These providers would be prohibited from billing patients directly, and individuals would not have to make co-payments or deductibles.

Patients can choose any provider, including doctors and hospitals, without worrying about provider-network coverage.

Private insurers could offer coverage for services that CalCare does not cover, but they would have to negotiate prices with the state government. Additionally, private insurers could not provide coverage for services that CalCare already covers.

AB 2200 would also establish a healthcare board to regulate CalCare and determine which services would be covered. The board would include nine voting members with expertise in healthcare and would be responsible for negotiating rates with providers and ensuring the system’s solvency.

A CalCare Public Advisory Committee would work with the board to provide input on healthcare policy issues such as budgets and financing.

The most recent version of the bill has encountered less opposition than the previous attempts due to a more favorable political environment in the state assembly.

Nevertheless, the bill is still likely to face significant challenges due to the state’s budget shortfall and lack of a clear funding mechanism.

Universal healthcare for all Californian residents faces significant financial obstacles that would sustain such a system. According to Politico, CalCare could cost between $314 billion and $391 billion annually, far exceeding the state’s current health expenditures.

The bill does not specify a funding source for CalCare, relying instead on anticipated federal revenue by diverting funds from Medicare and Medicaid and through increased state taxes.

AB 2200 creates the CalCare Trust Fund in the State Treasury to receive and manage revenue designated for the healthcare system. All federal and state funds received for the purposes of the act will be deposited into the trust fund.

The trust fund account will receive all state revenues from CalCare, meaning that all state taxes and other sources of income collected by the state will be deposited into this account to fund the healthcare system.

It can only be used for specific purposes, including operating and capital expenditures, special projects, health professional education, administrative costs and public health activities.

All funds are continuously appropriated for CalCare’s purposes, and any unexpended or unencumbered funds at the end of a fiscal year can be carried forward to the next fiscal year.

A transitional phase will start after the legislature funds CalCare to commence operations.

During this period, Medicare and Medicaid beneficiaries under 18 or 55 years old will be enrolled in CalCare. Individuals will have the option to retain their private insurance until the end of the transitional phase, which is currently undetermined.

Supporters of universal healthcare typically argue that it would provide much-needed financial relief to families and businesses while improving healthcare access for all. They point to the success of single-payer systems in other countries, such as the United Kingdom and Canada.

The California Nurses Association sponsors the bill, and they say that a single-payer system would improve the quality of healthcare for all Californians, reduce medical costs and streamline the healthcare delivery process.

“Californians recognize that our current health care system does not work, and we deserve better,” said CNA President Michelle Gutierrez.

A 2022 study published in the Proceedings of the National Academy of Sciences found that over 350,000 COVID-19-related deaths could have been prevented in the US if it had a universal healthcare system.

According to a CalCare facts sheet, the US spends more on healthcare than other industrialized nations despite utilizing fewer medical services.

This is due to higher prices. However, this does not lead to better health outcomes, as Americans have shorter life expectancies and more chronic conditions.

Conversely, opponents, including the California Hospital Association, cite concerns about the cost and efficiency of such a system.

They argue that the bill would lead to lower quality of care, increased wait times and reduced provider choice.

In an opposition letter, CHA Vice President of State Advocacy Mark Farouk said, “The program would face fiscal pressures to keep costs low while overpromising benefits.”

According to The Times, 340,000 UK patients on a National Health Service waiting list died before they could receive medical care in 2022. NHS is the publicly funded healthcare system in the United Kingdom.

AB 2200 will now move to the Assembly Appropriations Committee for further consideration. If approved by the entire Assembly, it will face a vote in the State Senate.

Even if the bill passes both chambers, it would still require the signature of Governor Gavin Newsom, who has previously expressed some reservations about single-payer healthcare.