"Train Wreck" Effect of Single-Payer Healthcare in California

Preeminent California legislative reporter Daniel Weintraub, of the Sacramento Bee, reveals the state’s legislative analyst’s report that a proposal for Canadian-style government-run single-payer healthcare would cost $210 billion a year. Even with a new payroll tax burden on workers and employers of 12%, there’d be a $40 billion annual deficit. Weintraub says it “would be a financial train wreck.”

The entire California budget is about $100 billion a year. That is near $20 billion in the red, with little realistic prospect of closing the gap without much more taxes, very reduced services, and more debt.

The magnitude of the “train wreck” is, indeed, larger:

To close that gap [for a government-run plan], the plan's managers would have to sharply curtail the health care services most Californians receive today or else collect far more in taxes, or some combination of the two.

The new payroll tax would have to be on the order of 16% to start, instead of 12%, and would grow as medical costs and usage grows.

The top income tax rate in high-tax California is 9.3%, over income in the $40k’s range, barely working class in California. Imagine what another 16% on top of that would do to struggling workers, not to mention the entire economy of California, or the US if it spread.