California Proposes Taxpayer-Funded Health Care for All Illegal Aliens
FAIR Take | January 2022
Two proposals are being considered in California to provide “free” health care coverage to all the illegal aliens in the state. Surprisingly Governor Gavin Newsom (D) is supporting the more moderate and incremental one.
Under Governor Newsom’s plan, Medi-Cal, the state’s Medicaid program, would be expanded to cover anyone under 138 percent of the federally-defined poverty level, regardless of citizenship or immigration status, or age. Since 2020, Medi-Cal has covered illegal aliens under the age of 26. Based on legislation that passed in 2021, Medi-Cal will cover illegal aliens aged 50 and over beginning in May. Governor Newsom’s plan would fill in the remaining age gap, covering illegal aliens between ages 26 and 49.
Governor Newsom claims his plan would be funded entirely from a surplus of revenues surging back after the worst of the COVID-19 pandemic and it would not require additional taxpayer monies. However, given California’s track record, additional monies will likely be needed – especially in the further out years. The state heavily relies on its top income earners to pay its high personal income and capital-gains taxes. In 2019, the top one percent of wage earners paid nearly 45 percent of all the state’s income tax collections. Yet, in 2021, more than 367,000 people left California for other states. This is greater than a full one percent of the state’s population. Left behind is an ever-larger population of illegal aliens who take vastly more from the state’s tax coffers than they pay. As people and businesses continue to flee the state, it will be difficult to maintain a budget surplus and California will have to either impose new taxes or cut spending on these generous benefits.
In contrast to Governor Newsom’s Medi-Cal expansion, California’s more “progressive” lawmakers are backing Assembly Bill (AB) 1400. Sponsored by Assemblyman Ash Kalra (D-San Jose), California would adopt a “single-payer” healthcare system, called CalCare, which is somewhat similar to the National Health Service (NHS) in the United Kingdom. Under CalCare, almost all private and employer-provided health insurance would be eliminated. Health care services would be “free” at the point of delivery and available to everyone in the state, including illegal aliens.
To fund the CalCare plan, California’s tax burden, which is among the top two or three highest in the country, would skyrocket further. The cost estimate is $163 billion. Supporters of AB 1400 plan to fund it with tax hikes that would require a state constitutional amendment approved by the voters. According to some experts, taxes in the state could nearly double.
Assemblyman Vince Fong (R-Bakersfield), the Vice-Chair of the Assembly Budget Committee, condemned both plans saying “[t]he mentality that success is defined by how much is spent instead of by real, measurable, and actual results is mindboggling … Californians are living a different reality seeing problems only getting worse.”
FAIR estimated in 2017 that California already spent over $17 billion a year on benefits for more than 2.6 million illegal aliens, or over $6500 annually per taxpayer. Either of these proposals would increase the costs dramatically.