California Business Roundtable: CA Can’t Afford $400 Billion Single-Payer Price Tag

The California Business Roundtable responded to a legislative analysis Monday that said SB 562, a single-payer health care bill by Sens. Ricardo Lara (D-Bell Gardens) and Toni Atkins (D-San Diego), will cost California $400 billion annually to implement. CBRT President Rob Lapsley says “there is no responsible way to pay for this proposal.”

“Let’s look at the facts: California’s 2017-18 budget is estimated at $180 billion. We are the highest tax state in the nation, we are growing lower-wage and higher-wage jobs while losing middle-class jobs, unemployment is below 5 percent yet we are already projecting a budget deficit in the short term. We have billions in unfunded pension and health care liabilities, a worst-in-the-nation poverty rate, long-term debt and a growing housing crisis. But now the Legislature wants to consider a 200 percent increase in the state budget. There is no responsible way to pay for this proposal,” states Lapsley.

According to the LA Times, the analysis found 3 key takeaways from the proposal:

  • SB 562 will cost $400 billion per year to cover all healthcare and administrative costs.
  • Half of that annual cost could be covered by existing federal, state, and local funds repurposed to go toward the single-payer system.
  • New taxes would be needed to raise the additional $200 billion.

LA Times further reports:

The analysis proposes one scenario in which a new payroll tax on employers — with a rate of 15% of earned income — could supply the new revenue. But the measure itself does not contain a specific tax proposal, and therefore would not, at this point, need a two-thirds vote to approve a new tax.

The write-up also notes that a universal healthcare proposal would likely reduce spending by employers and employees statewide, which currently ranges between $100 billion and $150 billion annually. Therefore, the total new spending under the bill would be between $50 billion and $100 billion each year.

“We are already seeing an exodus of low- and middle-income residents from our state. SB 562 is part of an ongoing progressive agenda that will only result in progressively bankrupting California,” Lapsley added in the CBRT press release.

What do you think of the single-payer proposal in California? Do you think it is a step in the right direction or the wrong path for the state?

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