By Stephen Rosenfeld / Alternet
The California Senate Appropriations Committee has vastly overstated the new costs of creating a single-payer health system for the Golden State, according to a national authority on healthcare spending.
Last week, the Committee released its analysis of SB 562, The Healthy California Act. It said the total cost of providing health care to all 37 million Californians was $400 billion a year. Half of that comes from an array of government programs—Medicaid, Medicare, Obamacare, etc. That means Californians would have to raise the payroll tax by 15 percent to pay for the difference, it reported.
“About $200 billion in additional tax revenues would be needed to pay for the remainder of the total program cost. Assuming that this cost was raised through a new payroll tax (with no cap on wages subject to the tax), the additional payroll tax rate would be about 15% of earned income,” the Appropriations analysis said. “It is important to note that the overall cost of those new tax revenues would be offset to a large degree by reduced spending on health care coverage by employers and employees. Therefore, total new spending required under the bill would be between $50 and $100 billion per year.” [Read more…]