California currently receives approximately $225 billion from the federal government for Medicare, Medi-Cal and TriCare. 19.55 million Californians are the recipients of care from these entities.

Let’s assume that the federal government does not comply with Governor Newsom’s request to divert those funds to Healthy CA and those programs remain in place. 

That leaves 20.5 million Californians that would be eligible for Healthy CA. And those 20.5 million people are under age 65 and are among the healthiest residents and therefore cost less for which to provide care. A conservative estimate  to provide healthcare is $5000 per person per year. The total cost to provide healthcare for these 20.5 million residents is $102.5 billion per year.

California companies currently spend approximately $87.5 billion on healthcare for their employees. If that is replaced by a payroll tax (and thus the cost to businesses remains the same), then it would cost $15 billion in premiums and copays for the remaining 20.5 million Californians. That amounts to $731.70 per person per year, or $243 per month for a family of four. If new taxes on soda and processed foods are imposed, the cost would be even less.

 

The $731.70 would be paid through a combination of monthly premiums and through patient cost sharing such as copays.  Patient cost sharing is an important component as it reduces consumer and physician induced demand and helps keep both wait times and costs down. Canada and the UK have proven that eliminating patient cost sharing has a negative effect on both care and costs.