California does not have single-payer healthcare, and as of 2026 the state is on its third serious attempt in five years to create one. Assemblymember Ash Kalra reintroduced the concept in early 2026 as Assembly Bill 1900, following two earlier bills that died without reaching a governor’s desk. Every version has run into the same three problems: how to pay for it, how to get federal permission to fold Medicare and Medi-Cal dollars into a state program, and how to work around a federal law that shields employer-sponsored insurance from state regulation.
Where the Effort Stands in 2026
AB 1900 would have California replace private insurance and make every resident eligible for coverage under a state program. It directs the state to seek federal waivers to consolidate existing public healthcare dollars, and it leaves the funding question to be sorted out later, stating that the Legislature will determine revenue sources after the policy framework is established.
The two predecessor bills followed a similar pattern. Assembly Bill 1400, the California Guaranteed Health Care for All Act, proposed creating “CalCare” for the 2021–2022 session. It died on January 31, 2022, without ever reaching a floor vote. Kalra acknowledged the bill was short of the 41 Assembly votes needed by “double digits” and chose not to force a vote that would have the bill “go down in flames.” A successor, AB 2200, was introduced in the 2023–2024 session with broader co-authorship, added a built-in fiscal analysis requirement, and directed the CalCare board to apply for federal waivers by January 1, 2026. It also failed to advance.
Governor Newsom signed SB 770 in 2023, which continued the work of the Healthy California for All Commission, a body created to study unified financing options. That commission’s 2022 report identified obtaining federal permissions and funding as a “threshold issue” for any single-payer system.
What CalCare Would Cover
Under the CalCare proposals, every California resident would be enrolled regardless of immigration status, employment, or income. The program would cover inpatient and outpatient care, emergency services, dental, vision, mental health, substance use treatment, and nursing home care. Premiums, copays, and deductibles would be eliminated.
California’s uninsured rate was 5.9% in 2024, below the national average of 8.2%. Roughly 2.3 million residents still lack coverage, and millions more are technically insured but face deductibles and cost-sharing that discourage them from seeking care. That gap is what the CalCare proposals aim to close.
The Cost and How It Would Be Paid For
Estimates have grown with each bill. A 2017 state Senate Appropriations Committee analysis of an earlier single-payer bill, SB 562, produced the $400 billion annual figure that stuck in public debate. The Legislative Analyst’s Office later estimated AB 1400’s CalCare program at $494 billion to $552 billion annually, with costs growing by $20 billion to $30 billion each year.
Not all of that would be new spending. Federal, state, and local governments already fund roughly half of California’s healthcare costs through Medicare, Medi-Cal, and other programs. Employers and individuals cover the rest through premiums, deductibles, and out-of-pocket costs. A single-payer program would redirect existing spending through one public system while expanding coverage.
The gap between current public spending and the full CalCare price tag would require new revenue. AB 1400’s companion funding measure, Assembly Constitutional Amendment 11, proposed four specific taxes:
- A 2.3% business excise tax on gross receipts above $2 million annually for qualifying businesses.
- A 1.25% payroll tax on all wages paid by employers with 50 or more employees.
- An additional 1% payroll tax on wages above $49,900 per employee.
- A graduated personal income surtax ranging from 0.5% on taxable income above roughly $149,500 to 2.5% on income above approximately $2.48 million.
ACA 11 specified that revenue from these taxes would flow into a CalCare Trust Fund dedicated exclusively to funding the program, and it would only take effect after the Legislature enacted the underlying policy and the program demonstrated sufficient revenue. ACA 11 went nowhere because AB 1400 died first.
Why Federal Permission Is Required
California cannot absorb Medicare and Medicaid dollars into a state-run program without federal permission. Both programs operate under federal rules that restrict how the money can be spent, and single-payer would fundamentally restructure that spending. The state would need at least two waivers, and possibly a third.
A Section 1115 Medicaid demonstration waiver would allow California to fold Medi-Cal funding into CalCare. States use Section 1115 waivers to experiment with program design, but they must apply to the U.S. Department of Health and Human Services and meet a budget neutrality requirement. The 2025 federal budget reconciliation bill codified budget neutrality as a statutory requirement, meaning the waiver cannot result in greater federal costs than what Medicaid would have cost without it.
A Section 1332 State Innovation Waiver under the Affordable Care Act would let California redirect ACA marketplace subsidies into the state program. Section 1332 waivers carry four statutory guardrails: the state plan must cover at least as many people, provide coverage at least as comprehensive as ACA marketplace plans, be at least as affordable, and not increase the federal deficit. Meeting all four while restructuring the insurance market would require sophisticated actuarial work and cooperation from whatever administration is in office.
Redirecting Medicare funds is the most uncertain piece. Section 402 of the Social Security Amendments gives the HHS Secretary authority to waive certain Medicare payment rules for demonstration projects, and Section 1115A Innovation Center authority allows testing of all-payer payment reform at the state level. The Healthy California for All Commission’s legal analysis concluded that federal officials likely have the power to redirect Medicare funding into a state single-payer system. Whether any administration would choose to use that power is a separate question.
The ERISA Obstacle
Even if California solves the waiver problem, it faces a separate federal barrier. The Employee Retirement Income Security Act broadly preempts state laws that “relate to” employer-sponsored benefit plans. Federal courts have interpreted that language expansively for decades. A state law that directly regulates what employers must include in their health plans, or that has a significant indirect effect on those plans, risks being struck down.
Roughly half of insured Californians get coverage through an employer. A single-payer program that eliminates private insurance necessarily eliminates employer-sponsored plans. If a court determined that CalCare “relates to” those plans within ERISA’s meaning, the program could be invalidated for the largest segment of currently insured residents.
The workaround most often discussed is to structure CalCare’s funding as taxes rather than regulation of employer benefits. Payroll taxes and business excise taxes like those proposed in ACA 11 don’t regulate the content of benefit plans; they collect revenue that funds a public program. Legal experts have generally concluded that revenue-generating measures would not trigger ERISA preemption. That conclusion has not been tested in court for a program as sweeping as CalCare, and business groups would almost certainly litigate.
Why It Keeps Failing in Sacramento
California has Democratic supermajorities in both chambers, and single-payer polls well with Democratic voters. Every single-payer bill has still failed. The obstacle is intraparty disagreement about timing, cost, and risk rather than partisan opposition. Some legislators support the concept but balk at the tax increases. Others worry about disrupting coverage for the millions of Californians satisfied with their employer plans. Labor is split, with nurses’ unions strongly in favor and some building trades unions wary of losing negotiated health benefits.
Governor Newsom campaigned in 2018 promising to lead the effort on single-payer, then pivoted in office to pursuing “universal access” through incremental Medi-Cal expansions rather than a full overhaul. AB 1400 could not clear a simple majority in the Assembly. A constitutional amendment to establish CalCare’s funding would require a two-thirds vote in both chambers to place on the ballot, then majority voter approval. That means 54 Assembly votes and 27 Senate votes for a measure imposing significant new taxes, a steeper climb than the one AB 1400 already failed.
The recurring pattern is to introduce an ambitious policy bill, defer the funding mechanism, and watch the bill die. Advocates have not yet found a way to package benefits and costs together in a form that enough legislators will accept, and AB 2200’s fiscal analysis requirement was an effort to address that criticism by forcing the math before the program becomes operative.
What Would Have to Change
AB 1900 faces the same fundamental challenges as its predecessors. Healthcare costs have continued to rise, employer premiums have climbed, and consolidation among hospital systems and insurers has left many California markets with fewer choices, all of which affects how the relative cost of a single-payer alternative looks compared to the status quo.
The practical path forward requires several conditions to align at once: a governor willing to spend political capital on the issue, a Legislature willing to vote for specific tax increases, a federal administration willing to grant the necessary waivers, and a court system that accepts the ERISA workaround. None of those conditions currently exist together. Until they do, single-payer in California remains an aspiration advanced session after session by legislators who believe its time will eventually come.