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California Democrats' single-payer health care plan passes first hurdle

Melody Gutierrez, Los Angeles Times on

Published in Health & Fitness

Financing for the single-payer proposal is far more uncertain, some lawmakers pointed out Tuesday. The funding plan for AB 1400 is contained in a separate measure, Assembly Constitutional Amendment 11. If passed by two-thirds of the Legislature, ACA 11 would then go to voters for approval. Kalra said the measures were separated so that the structure of the system could be finalized and the state could apply for the necessary federal waivers before a financing model is weighed by voters.

Critics argued that separating the legislation makes it difficult to assess the proposal holistically.

Under ACA 11, a new excise tax on businesses would be created equal to 2.3% of any annual gross receipts in excess of $2 million. A new payroll tax would be added for employers with 50 or more employees at a rate of 1.25% of total wages. An additional 1% payroll tax would be required for employers with workers earning more than $49,900 a year.

Personal income taxes would be raised for salaries above $149,509 a year beginning with an increase of 0.5% and increasing to 2.5% for salaries above $2.5 million. Personal income tax increases could rise with inflation in future years.

Kalra said the financing measure, if passed by the Legislature, is not likely to be put before voters until 2024. Supporters say the taxes will total less than what employers and Californians currently pay for private insurance.

 

Many of the Democrats who voted in support of the bill said they have concerns that must be addressed to receive their future votes.

Kalra also acknowledged the challenges ahead, noting previous efforts in California have "tried and failed many times before."

"Why would I enter into such treacherous territory where failure is the most likely outcome?" Kalra said. "I entered into a life of public service for one reason above all else — to reduce suffering. And the reality is that in our state and our nation we have a health care system that has far too much suffering embedded into it."

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