Assembly Bill 1400 (Kalra) passed the Assembly Health Committee on January 12. The vote was straight party-line, 11-3. AB 1400 is the California Guaranteed Health Care for All Act. It creates the California Guaranteed Health Care for All program, or CalCare, to provide comprehensive universal single-payer health care coverage and a health care cost control system for the benefit of all residents of the state.
If this sounds familiar, it should. It is virtually identical to Senate Bill 562 (Lara and Atkins), 2017 legislation entitled the Healthy California Act. As before, the treatment of workers’ compensation medical care is left to requiring the governing body of CalCare to, “develop a proposal for CalCare coverage of health care items and services currently covered under the workers’ compensation system, including whether and how to continue funding for those item and services under that system and how to incorporate experience rating.
And thus, still lives the dreaded 24-hour coverage, long considered an existential threat to the venerable workers’ compensation system. At least for January. As a bill introduced in 2021, AB 1400 must pass the Assembly by January 31.
The price tag for AB 1400 will be staggering. Prior legislation was estimated to cost $400 billion, only half of which was offset by existing state and federal funds. To address funding for AB 1400, the authors also introduced Assembly Constitutional Amendment 11, which creates a State Personal Income CalCare Tax for those making $149,509 or more a year. The tax rate increases within income brackets and is adjusted for inflation. As a constitutional amendment, the tax increase would go to the voters for approval. Whether the revenue generated by this tax would cover the net costs of CalCare is not known at this point. ACA 11 has not been referred to a committee in the Assembly for a hearing.
While AB 1400 passed the Assembly Health Committee, that is not a sign that it is on a track to get to the Senate by the January 31 deadline. Indeed, several Democratic members on the Health Committee made it quite clear that their votes were for moving the bill only out of committee and they reserved the right to oppose the bill on the Assembly Floor should it get there. It will first have to stop in the Appropriations Committee, where it is set to be heard on January 20.
It also seems fairly clear that a universal, single payer system with its associated costs is not aligned with the current health care reform proposals of Governor Newsom, or of health care affordability and availability actions already taken by the Governor and Legislature over the past several years. As noted in the Governor’s Budget proposal, a spending plan is being developed so that beginning no sooner than January 1, 2024, Medi-Cal will be available to all income-eligible Californians regardless of immigration status. None of these initiatives lend themselves to suddenly pivoting and supporting a single payer system.
The 2022 legislation session will provide ample opportunity to express concern over legislation affecting the workers’ compensation system. AB 1400 is not one of those bills.
Note: The opinions expressed herein may or may not be those of Workers’ Comp Executive. Mark Webb is a former Arizona insurance regulator, insurance company chief compliance officer, and is an expert in corporate governance, risk and compliance. He is the owner of Prop 23 Advisors.