(April 18, 2024) A large and diverse coalition of 150 California business representatives have joined a CalChamber-led coalition in strong opposition to AB 2200 (Kalra; D-San Jose), a job killer bill, that would create an expensive government bureaucracy to finance a state-run health care system.

The bill is scheduled to be heard in the Assembly Health Committee as a Special Order next Tuesday, April 23.

AB 2200 forces all Californians into a new untested state government health plan, with no ability to opt out while eliminating Medicare for California seniors and increasing taxes at least $250 billion a year on workers, income, jobs, goods and services.

Astronomical Costs Imposed on Taxpayers

The Healthy California for All Commission recently estimated that total health care costs annually exceed $500 billion in California. This amounts to one-seventh of the gross state product and would more than double the state’s budget.

In a letter sent to legislators this week, the CalChamber explained that AB 2200 is woefully incomplete as it does not include any funding mechanism to account for the costs needed to implement a state-run health care system (CalCare). Considering that the state’s General Fund cannot come anywhere close to covering CalCare’s cost, even in surplus years, taxpaying Californians would be required to make up the shortfall, especially during California’s current deficit.

Prior single-payer fiscal analyses estimated that the system would cost more than $400 billion annually. In 2008, the Legislative Analyst’s Office (LAO) analyzed the cost of a single-payer system in California and concluded that more than $210 billion would be needed in the first year to sustain such a system and would increase up to $250 billion in subsequent years.

Even with a 12% payroll tax paid both by employers and employees under that measure, the report predicted a net shortfall of $42 billion in its first full year of implementation and even higher thereafter. Just to cover the shortfall, a 16% tax on employers and employees was estimated by the LAO, resulting in a multi-billion-dollar-tax increase on Californians.
The kinds of tax increases needed to finance AB 2200 would detrimentally impact California businesses and certainly discourage companies from growing or relocating here, the CalChamber warned in its letter.

Impacts on Physicians

AB 2200 would create a governing board that would set reimbursement rates for providers. If physicians took issue with those government-imposed rates, or if CalCare paid providers below the market average in other states, doctors may be left with little choice but to practice elsewhere. Canada’s health care system includes government-set payment rates and Canadian physicians earn less than their American counterparts. However, CalCare is not a nationalized plan, it’s local. Thus, California physicians could choose to practice in another state with traditional payment models if they found the choice to be beneficial, the CalChamber pointed out.

Additionally, the CalCare model would negatively impact the physician-patient experience. Government health care is typically operated like an HMO (health maintenance organization). Patients must see their assigned primary care physician so they can delegate care, place referrals, or order testing and procedures. Californians are covered by a variety of health plans, Medicare, or Medi-Cal and the market helps ease this provider-access issue. However, CalCare would contribute to increased demand for a limited supply of physicians and facilities. Britain’s National Health Service is a government-run health system and the country experiences overcrowded hospitals, long waiting lists for procedures and quality of care issues. A single-payer system would undoubtedly experience the same bureaucratic outcome under AB 2200, the CalChamber said.

State Run Health Care Rejected Before

California voters have twice rejected a government-run health care system at the ballot box—in 1994 and 2004. Additionally, CalChamber polling found that voters overwhelmingly preferred to keep their current health insurance over switching to a single-payer approach.
Voters strongly support subsidies for people who cannot afford their own health care and for those who have pre-existing health conditions, but were not ready to embrace government-run health care.

Coalition

Members of the coalition include:

• Acclamation Insurance Management Services
• African American Farmers of California
• Agricultural Council of California
• Alameda Chamber of Commerce
• Allied Managed Care
• American Composites Manufacturers Association
• American Petroleum and Convenience Store Association
• American Pistachio Growers
• American Property Casualty Insurance Association
• Antelope Valley Chamber of Commerce
• Associated General Contractors
• Associated General Contractors – San Diego
• Bay Area Council
• Blue Shield of California
• Brea Chamber of Commerce
• Building Owners and Managers Association
• Business Council of San Joaquin County
• California Agricultural Aircraft Association
• California Apple Commission
• California Asian Pacific Chamber of Commerce
• California Association of Winegrape Growers
• California Attractions and Parks Association
• California Beer and Beverage Distributors
• California Blueberry Association
• California Blueberry Commission
• California Builders Alliance
• California Building Industry Association
• California Business Properties Association
• California Business Roundtable
• California Cable & Telecommunications Association
• California Cattlemen’s Association
• California Chamber of Commerce
• California Children’s Hospital Association
• California Cotton Ginners and Growers Association
• California Financial Services Association
• California Fresh Fruit Association
• California Fuels and Convenience Alliance
• California Hispanic Chamber of Commerce
• California Independent Petroleum Association
• California Land Title Association
• California Landscape Contractors Association
• California League of Food Producers
• California Lodging Industry Association
• California Manufacturers & Technology Association
• California New Car Dealers Association
• California Pool and Spa Association
• California Retailers Association
• California Rice Commission
• California Strawberry Commission
• California Taxpayers Association
• California Walnut Commission
• California Women for Agriculture
• Can Manufacturers Institute
• Carlsbad Chamber of Commerce
• Cemetery and Mortuary Association of California
• Chino Valley Chamber of Commerce
• Cigna Healthcare
• Coalition of Small and Disabled Veteran Businesses
• Construction Employers’ Association
• Corona Chamber of Commerce
• Dairy Institute of California
• Danville Area Chamber of Commerce
• Elevance Health
• El Dorado County Chamber of Commerce
• El Dorado Hills Chamber of Commerce
• Elk Grove Chamber of Commerce
• Family Business Association of California
• Flasher Barricade Association
• Folsom Chamber of Commerce
• Fontana Chamber of Commerce
• Fountain Valley Chamber of Commerce
• Fresno Chamber of Commerce
• Garden Grove Chamber of Commerce
• Gateway Chambers Alliance
• Gilroy Chamber of Commerce
• Greater Coachella Valley Chamber of Commerce
• Greater Conejo Valley Chamber of Commerce
• Greater Grass Valley Chamber of Commerce
• Greater High Desert Chamber of Commerce
• Greater Riverside Chambers of Commerce
• Greater San Fernando Valley Chamber of Commerce
• Greater Stockton Chamber of Commerce
• Health net
• Hollywood Chamber of Commerce
• Housing Contractors of California
• Independent Lodging Industry Association
• Innovating Commerce Serving Communities
• Imperial Valley Regional Chamber of Commerce
• Kaiser Permanente
• La Cañada Flintridge Chamber of Commerce and Community Association
• Laguna Niguel Chamber of Commerce
• Lincoln Area Chamber of Commerce
• Long Beach Area Chamber of Commerce
• Los Angeles Area Chamber of Commerce
• Mammoth Lakes Chamber of Commerce
• Manhattan Beach Chamber of Commerce
• Manteca Chamber of Commerce
• Mission Viejo Chamber of Commerce
• Metal Finishing Association of Northern California
• Metal Finishing Association of Southern California
• Murrieta/Wildomar Chamber of Commerce
• NAIOP California
• National Electrical Contractors
• National Federation of Independent Business
• Newport Beach Chamber of Commerce
• Nisei Farmers League
• North San Diego Business Chamber
• Norwalk Chamber of Commerce
• Oceanside Chamber of Commerce
• Olive Growers Council of California
• Orange County Business Council
• Palos Verdes Peninsula Chamber of Commerce
• Paso Robles Templeton Chamber of Commerce
• Pleasanton Chamber of Commerce
• Rancho Cordova Area Chamber of Commerce
• Redondo Beach Chamber of Commerce
• Rocklin Area Chamber of Commerce
• Roseville Area Chamber of Commerce
• Sacramento Black Chamber of Commerce
• Sacramento Regional Builders Exchange
• San Diego Regional Chamber of Commerce
• San Juan Capistrano Chamber of Commerce
• San Mateo Area Chamber of Commerce
• San Pedro Chamber of Commerce
• San Ramon Chamber of Commerce
• Santa Ana Chamber of Commerce
• Santa Maria Valley Chamber of Commerce
• Shingle Springs Cameron Park Chamber of Commerce
• Silicon Valley Leadership Group
• Simi Valley Chamber of Commerce
• South Bay Association of Chambers of Commerce
• Southwest California Legislative Council
• Torrance Area Chamber of Commerce
• Tulare Chamber of Commerce
• United Chamber Advocacy Network
• United Contractors
• Vacaville Chamber of Commerce
• Ventura Chamber of Commerce
• Walnut Creek Chamber of Commerce & Visitors Bureau
• Waste Management
• West Coast Lumber & Building Material Association
• West Hollywood Chamber of Commerce
• West Ventura County Business Alliance
• Western Agricultural Processors Association
• Western Growers Association
• Western Manufactured Housing Communities Association
• Western Plant Health Association
• Whittier Area Chamber of Commerce
• Word & Brown
• Yuba Sutter Chamber of Commerce

Staff Contact: Preston Young