California Democrats on Tuesday took their first step toward abolishing the private health insurance market in the nation’s most populous state and replacing it with a government-run plan that they promised would never deny anyone the care they need.
But the proposal that cleared a legislative committee in the state Assembly is still a long way from becoming law. It faces strong opposition from powerful business interests who say it would cost too much. And even if it does become law, voters would have to approve a massive income tax increase to pay for it — a vote that might not happen until 2024.
To pay for everything, Democrats have introduced a separate bill that would raise taxes on businesses and individuals by about $163 billion per year, according to an analysis by the California Taxpayers Association, which opposes the bill. Voters would have to approve the tax hikes.
Business groups, led by the California Chamber of Commerce, said the government-run health care system would be so expensive that the tax increase still wouldn’t be enough to pay for everything. In 2018, California’s total health care expenditures totaled $399.2 billion, accounting for 13.2% of the state’s gross domestic product, according to an analysis by the Healthy California for All Commission.