California could become first US state to offer universal healthcare to residents

California is considering creating the first government-funded, universal healthcare system in the US for state residents. The proposal, which lawmakers will begin debating on Tuesday, would adopt a single-payer healthcare system that would replace the need for private insurance plans.

California has tried and failed to replace private health insurance with a universal, state-funded program for years. Voters rejected such a proposal in 1994 and state lawmakers failed to find a way to fund a single-payer health system in 2017.

Attempts to create universal healthcare nationally have failed to gain traction despite being promoted by prominent progressive lawmakers, including 2020 presidential candidate Senator Bernie Sanders. State legislatures in Vermont and New York have also tried and failed to create universal healthcare plans.

Although inequities in healthcare access exacerbated by the Covid-19 pandemic have intensified calls for healthcare reform, efforts to institute a universal health system, or even a public healthcare option, have historically faced implacable opposition from powerful private healthcare lobbies.

The Affordable Care Act (ACA), which expanded healthcare in the US, created insurance market exchanges where people without employer-sponsored insurance could shop for coverage and subsidies to help Americans afford insurance. The legislation dramatically expanded healthcare access, but stopped short of creating a public, government-run healthcare option. Despite reforms enacted by the ACA, medical bills remain the leading cause of debt for Americans.

Were California to adopt a universal healthcare system, the state would funnel state and federal dollars allocated for healthcare into a single, government-run program. The insurance industry and business groups are rallying against the proposal, which would be paid for with higher taxes mostly on the wealthiest individuals and businesses, but would increase taxes for all but the lowest-earning Californians.

Supporters of the plan say that despite the taxes, employers and individuals would pay less for health coverage overall. A state-run system would also include more benefits, more cheaply, by eliminating the need to account for insurance company profits.