In a move that could either revolutionize healthcare or send taxpayers into a tailspin, the California Assembly Health Committee has unleashed a doozy of a bill. Brace yourselves, folks, because, under Assembly Bill 2200, California is gunning to overhaul its entire healthcare system faster than you can say “universal coverage.”

The California Assembly Health Committee recently passed a bill that would fundamentally transform the state’s healthcare system by creating a universal healthcare program, CalCare, which seeks to replace most private insurance. Under Assembly Bill 2200, this bold legislative move proposes to transfer the whopping $405 billion currently spent annually on healthcare in California to the state’s budget. This development comes amidst the state grappling with a $73 billion budget deficit, raising concerns about how the state will finance these new substantial costs. Critics are raising the alarm about potentially higher taxes to cover the cost of healthcare in a state already dealing with a massive deficit.

Assemblymember Ash Kalra, D-San Jose, championed the bill, expressing optimism about California setting a progressive example for national healthcare. “With continued collaboration, California has the opportunity to be a model for the nation on what a progressive alternative to our fragmented, profit-driven status quo can be,” Kalra stated after AB 2200 moved to the Appropriations Committee following a 9-4 vote.

Under the proposed plan, CalCare would cover all state residents and include services like gender-affirming care, home health care, assisted living, dialysis, and acupuncture. Although private insurance would essentially be eliminated, some private care could still be available for treatments not covered under CalCare, with providers required to negotiate prices with the government.

The bill stipulates that CalCare funding cannot lead to reductions in registered nursing staff or alter the availability of emergency room or primary care services. Additionally, CalCare would control the profit margins of contracted healthcare providers and scrutinize the sources of their profit generation.

While residents would not pay directly for healthcare services under CalCare, the program would be primarily funded by redirecting federal Medicare and Medicaid funds and significantly increasing state taxes. However, AB 2200 does not generate new revenue; instead, it establishes the structure and coverage of CalCare. The bill anticipates a transition period during which beneficiaries under 18 or over 55 would be moved to CalCare and private insurance could be retained until this phase concludes.

A controversial aspect of AB 2200 is its exemption from the transparency requirements mandated by the California Constitution. These requirements ensure public access to governmental proceedings and documents, raising concerns about accountability and public oversight of CalCare.

According to the Assembly Health Committee, California’s job-based family health coverage premiums have increased by 49% since 2008, while median wages have remained stagnant. Although the Affordable Care Act was implemented in 2010 to reduce healthcare expenses, the cost of healthcare continued to rise nationwide. Additionally, the bill is expected to face challenges related to federal regulations on Medicare and Medicaid.

Opponents of the bill cite the experiences of other countries with universal healthcare, pointing to potential pitfalls such as budget-driven reductions in essential services. The California Medical Association warned that the state’s balanced budget requirement might necessitate cuts in critical healthcare services during lean budget years. Furthermore, America’s Physicians Groups expressed concerns that the fee-for-service model could incentivize doctors to approve unnecessary procedures to earn more.

Critics also highlighted inefficiencies in international healthcare systems, noting significant patient wait times and mortality rates on waiting lists in countries like the U.K. and Canada compared to the current U.S. system.

As AB 2200 proceeds to the Assembly Appropriations Committee, it follows the trajectory of previous related legislative efforts, such as Kalra’s 2023 bill, AB 1690, which stalled, and State Sen Scott Wiener’s SB 770, which was enacted, prompting discussions on a unified healthcare financing system with the federal government.

The fate of AB 2200 will significantly impact the future of healthcare in California, underscoring the state’s ongoing debate over the best approach to providing healthcare for its residents.