Category: Health Care

Relevance of Senate Bill 562: The Healthy California Act

5/31/2017

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One of the most intently discussed policy issues at both the federal and state level is health care. On the federal level, President Trump is seeking to rapidly repeal the Patient Protection and Affordable Care Act signed into law by former President Obama that greatly expanded health care access for many Americans. The California legislature is making a great deal of noise with its most recent health care bill proposal, Senate Bill 562, also known as the Healthy California Act.
SB 562, authored by California Senators Lara and Atkins, calls for a single payer health care system in California; one that would provide comprehensive medical care coverage for all 39 million of California residents, thus eliminating private health insurance costs in California, and placing the responsibility of health insurance in the hands of the California government.
This bill would eliminate private insurance co-pays and deductibles and likely gain its funding from increased taxes- it recently passed its first major legislative test moving through the Senate Health Committee with a vote of 5-2. and passed through the Senate Appropriations Committee where the cost of legislation was determined. The $300 + billion dollar price tag did not detour the Democratic controlled committee from approving the bill on a 5-2 vote. The cost of the legislation is double the state budget.
There is a great deal of excitement and grassroots momentum surrounding the Healthy California Act, it has received major backing from the California Nurses Association, the California Teachers Association and the California Labor Federation, but there remains major questions about its fundamental reliance upon increased taxes. Critics, such as Governor Brown, question not only whether voters will embrace more tax hikes (having recently approved the largest gas hike in state history, see our previous Newsletter for details), but whether such a plan would balloon through the state budget of $124 billion, pointing to the budgetary flaws of previous, failed single-payer health care proposals in states such as Vermont and California.
Despite questions regarding SB 562’s budget and funding, the Santa Cruz City Council has recently declared its full support for the Healthy California Act, issuing a resolution of Support on May 9, 2017.
While there are still major legislative obstacles, if this bill is passed it would have enormous economic implications. California’s health care system relies upon roughly $230 billion in spending per year, and the burden of funding a single-payer health care system would likely fall upon taxpayers. SB 562 has faced intense opposition from private insurance companies, as well as the California Chamber of Commerce, who identify this health care proposal not only as expensive and unsustainable, but as a job killer that would hurt business by eliminating private insurance companies and penalizing employers and employees alike with further tax hikes. The California Chamber argues that this proposed new tax burden will not only hurt consumers and businesses already located in California, but will discourage businesses from establishing themselves in California, and will further cause job loss, as businesses will be forced to ease their increased financial burden with layoffs.
While there is both intense support for, and opposition against SB 562, much remains unknown, as the authors of the bill have yet to present a specific budget proposal for the bill, and there is plenty of room for amendments and changes as it moves towards legislative review.
We will keep you updated with further details as this bill continues to the Senate Appropriations Committee. Santa Cruz Area Chamber has not taken a position on this legislation.

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Relevance of Senate Bill 562: The Healthy California Act

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