Economy

California’s Health Tax

Written by T. Logan Dayne

The California single-payer health care has faced major scrutiny even in the supermajority-Democratic Legislature. California boasts a mighty economy, the fifth largest in the world, but like the Titanic that doesn’t mean it is unsinkable and it may have just avoided a $552 billion iceberg.

The single-payer health care system that had been envisioned by California lawmakers recently died and perhaps rightfully so. The cost estimate obtained by a non-partisan Legislative Analyst’s Office priced the bill as one significantly higher than the one presented by committee staffers just one month prior. The price tag for this new system would cost Californians somewhere between $494 billion to $552 billion. That is half a trillion or $552,000,000,000.00 annually. This would nearly be double what is already a record-breaking budget California Gov. Gavin Newsom unveiled in January which barely scratched $286 billion. The analyst’s concluded that “with higher demand and potentially lower supply from lower payment rates than today, CalCare could create shortfalls in the quantity and/or quality of health care available to Californians” this while also exacerbating the challenges the Californian workforce is also currently faced with.

These costs do not fully take into consideration the price of implementing the system either.  The shortfalls in the estimate would leave annual funding falling short by as much as $193 billion and as things stand, are likely to rise by $20 billion to $30 billion on an annual basis. A number of new tax hikes would also be implemented to pay for CalCare on top of everything else. Despite costs not adding up, some are still disappointed in the death of the bill. 

Photo Cred: Getty Images/ The Hill