SB 770 Paves Way for Massive Tax Hikes

A proposal moving its way through the Legislature seeks to eliminate Medicare in California and pave the way for massive tax increases on California workers and employers.

SB 770 would create a workgroup to petition the federal government to redirect hundreds of billions of dollars in annual Medicare and Medicaid funding that currently flows to California to a new health care system known as “single payer” instead.

In doing so, SB 770 would set in motion a complicated scheme envisioned by its proponents that would result in the elimination of Medicare and all private health coverage in California, replace it with a costly, untested health system run by state government, and require the largest tax increase in state history.

Concerns to Consider

For those who think dismantling our health system is a good idea, here are a few specific concerns to consider:

SB 770 / single payer proponents seek to eliminate all private health coverage in California and force all Californians into a new untested health system — with no ability to opt out or choose private coverage instead. Study after study shows Californians like their health coverage and Medicare, and strongly support protecting their right to choose it, and strongly support protecting the Medicare coverage seniors have earned.

The waiver sought by SB 770 would redirect roughly $200 billion annually to the new single payer health system. But that system is projected to cost more than $500 billion/year. The missing $300+ billion a year would be raised by new, higher taxes on payroll, employers, and the goods and services Californians purchase.

Many people and employers in our state are already struggling with the high cost of living here — a recent Public Policy Institute of California (PPIC) survey showed 57% of adults are experiencing some form of financial hardship due to rising costs. We cannot afford any kind of tax increase, much less one that is bigger than the entire state budget — especially to fund a massive new untested health system they don’t want or need.

SB 770 gambles California’s health care on the whims of Congress. The waiver SB 770 seeks is not permanent — it is dependent on approval by future Congresses, who could decide to withdraw it. This would immediately deprive the new single payer health system of more than $200 billion a year (roughly 40% of its funding), throwing it into chaos and forcing even more massive tax hikes on Californians.

Disruption

Ultimately, single payer would cause overwhelming disruption in the health care some 38 million Californians rely on, all paid for by tax increases and questionable federal funding.

We do not need to embark down this path. California is already on the cusp of ensuring everyone has access to health coverage. There are changes we can make to improve California’s health care system, including quality improvements and lower costs, but dismantling our health system is unnecessary, costly, and harmful.

Preston Young is a policy advocate for the California Chamber of Commerce.