California ought to be the first state that guarantees universal health insurance, Governor. Gavin Newsom stated Monday that California should be the first state to guarantee universal health care. outlinedPlanned budget for $286 billion
This program is open to everyone in the state regardless of their immigration status. If the legislature goes along with Newsom’s plans—some progressive California lawmakers have already introduced a bill to enact the idea—the system would take effect in 2024. Newsom estimates it will run to $2.2 billion per year.
.@GavinNewsomAfter this year’s $614 million investment, the cost of expanding universal healthcare would reach $2.2 billion per annum.
— Emily Hoeven (@emily_hoeven) January 10, 2022
California has a high proportion of undocumented immigrants without coverage. A Berkeley study last year found that 3.2 million Californians do not have any health insurance. This includes about 1.2million who are unable to access state programs due to their immigration status. The majority of those who are not eligible are eligible to be covered under California’s Medicaid generous program (MediCal), or can receive subsidies to buy insurance through the state exchange created as part of Affordable Care Act.
Newsom’s proposal would eliminate restrictions that Medi-Cal places on undocumented immigrants. The aim is to break down the barriers between various programs that already exist in the state’s budget, state Rep. Ash Kalra (D–San Jose) told The Los Angeles Times. “What we’re trying to do is get rid of these dozens of buckets of funding—whether it’s private insurance, whether it’s employer, whether it’s Medi-Cal—put it into one bucket,” Kalra told the paper.
It will cost a lot. Although Newsom didn’t address how he plans to fund the program Monday in his speech, Times According to reports, the new gross receipts tax of 2.3 percent would be applied to businesses that earn more than $2,000,000 annually. A new payroll tax would be added to the plan that will charge workers 1.25 percent on their annual wages. Californians who earn more than $149,000 per year would see an increase in their income taxes. Any resident earning over $2.5 million will be subject to an additional 2.5 percent wealth surcharge.
California’s progressives deserve credit for being transparent about the cost of such a system. Support for state-level universal coverage of health services has been a failure in the past. This was because the costs involved were much higher than the promises. Vermont’s attempt to implement a single-payer health care system fell apart in 2014 because the costs were too high. Colorado voters rejected a proposed single-payer system in 2016 when faced with the prospect of increasing payroll taxes by 10 percent to meet the estimated $25 billion annual price tag.
It’s not possible to get “free” medical care.
One thing Newsom has going for him is a $31 billion budget surplus, which would help defray the program’s initial costs. That surplus exists, in part, because of the federal dollars poured into state coffers in the name of pandemic relief—even though most states did not need the help.
To claim federal COVID relief funds were used to pay for state-level universal healthcare programs would seem a bit extreme. However, politicians have a reputation for finding innovative ways to spend additional cash. According to The Associated Press, Newsom’s budget will see about $10 billion in additional spending for next year. Times.)
Newsom, who is running for re-election in California this year, will be able to keep one of the major promises he made during his 2018 campaign. Newsom should be grateful to the Federal Reserve, the Federal taxpayers and the pandemic for this opportunity.