SB840: Bringing the Failures of Canada to the Golden State Part I
SB840 should be a household word term for any Californian concerned with employment, economics, and taxation within the state of California. The bill, currently in the State Legislature, would create a socialized health care system within the state of California, similar to the failing Canadian health care system (more, here). Currently, the Canadian health-care industry is reverting back to privatized health-insurance due to hospital closures, underfunding, and a decrease in the quality and timeliness of health care. Yet, instead of shunning this system, Democrats are attempting to bring it to California. In short, the State would criminalize private insurance companies, shifting all health care coverage to the state. While providing affordable health care to the greatest number of people is a noble cause, SB840 will do so with great cost to the citizens of California, with a disproportiante cost to the middle class.
The group Health Care For All provides a summary of the Bill. This summary claims that
All federal, state and county monies currently spent on health care will be reallocated to the state Health Care Fund. This will supply about one-third of the needed funding. Federal waivers are required for allocation of federal dollars to the state Health Care Fund. The remaining funding will come from state health taxes that will replace health insurance premiums now paid to insurance companies and co-pays and deductibles now paid to providers. Premiums will be affordable for every Californian and every business because what families pay is in proportion to their income and what employers pay is in proportion to wages(emphasis added)This means that middle and upper class workers will be required to pay a disproportionate amount compared to their coverage. A more complete summary claims that 12% of individual wages, plus "some other taxes" should be adequate. While 12% is already higher than what my wife and I currently pay for our insurance, I recognize the danger of "some other taxes" - ambiguity in taxation is a dangerous allowance for any program, let alone one with this massive a scope. Furthermore, the summary states "When cost control measures are insufficient [the] commissioner may ask the Legislature for an increase in health care taxes." While they say this will be covered by current taxation, they are planting the seeds for increasing current taxes, and creating new ones.
The plan will not only affect employees taxation rates, it will also hurt businesses and weaken California's economy. SB840 provides a disincentive for businesses to raise wages; any business willing to do so will have to pay proportionally higher taxes. Furthermore, it will provide an economic incentive for lowering the number of employees a company has. To add insult to injury, SB840 will create a disincentive for businesses to remain in California. Because the bill would eliminate choice amongst health care providers, those companies willing to provide coverage for their employees would be required by law to participate in the state's monopolistic health-care program.