California’s universal healthcare bill, Assembly Bill 1400, died in the Assembly on January 31, 2022, without ever reaching a floor vote. It would have created a state-run single-payer program called CalCare covering every resident with no cost at the point of care. The effort didn’t end there. In 2023, Governor Gavin Newsom signed SB 770, directing the state to design a federal waiver framework for a unified financing system, and Assemblymember Ash Kalra reintroduced a single-payer bill in 2026. Nothing has changed yet about how Californians get or pay for healthcare, and several federal legal barriers remain unresolved.
What AB 1400 Would Have Done
Formally titled the California Guaranteed Health Care for All Act, AB 1400 proposed replacing the state’s mix of private insurance, Medi-Cal, Medicare coverage, and employer plans with a single program administered by the state. CalCare would have absorbed the benefits currently delivered through Medi-Cal, Medicare, the Children’s Health Insurance Program, and Knox-Keene regulated health plans.1California Legislative Information. California State Legislature – AB-1400 Guaranteed Health Care for All
The benefit package was broad: hospital care, primary and preventive services, prescription drugs, dental, vision, mental health, substance use treatment, and long-term care. Supporters described the program as eliminating copayments and deductibles entirely, and the bill’s text promised coverage “without any fees” for enrollment. The intent was that no one would pay anything when they used care.
Coverage would have extended to all state residents, with no immigration-status restrictions. That would have made California one of the first states to offer publicly funded healthcare to undocumented residents on this scale, and it was one of the bill’s most politically contested features.
A new nine-member CalCare Board, operating as an independent public entity, would have set payment rates for providers, negotiated drug prices, established a prescription formulary, built the enrollment system, and developed the program’s annual budget.1California Legislative Information. California State Legislature – AB-1400 Guaranteed Health Care for All
How It Would Have Been Paid For
AB 1400 itself didn’t contain a funding mechanism. That job fell to a companion measure, Assembly Constitutional Amendment 11, which would have added a new article to the California Constitution establishing dedicated healthcare taxes. ACA 11 needed a two-thirds supermajority in the legislature plus voter approval at a general election. It never advanced.2California Legislative Information. ACA-11 Taxes to Fund Comprehensive Universal Single-Payer Health Care Coverage and a Health Care Cost Control System
ACA 11 proposed four revenue streams:
- A 2.3% excise tax on business gross receipts above $2 million annually.
- A 1.25% base payroll tax on total wages paid by employers with 50 or more employees.
- An additional 1% payroll tax on wages exceeding $49,900 per employee, stacked on top of the base payroll tax for larger employers.
- A progressive personal income surtax starting at 0.5% on taxable income above roughly $149,500 and climbing to 2.5% on income above approximately $2.48 million, with brackets adjusted annually for inflation.
These taxes were meant to replace premiums, deductibles, and copayments for most Californians. The reasoning was that although taxes would rise, total healthcare spending per person would fall by eliminating insurance overhead, reducing administrative work for providers, and giving the state leverage to negotiate lower prices. ACA 11 also included a condition preventing any of the new taxes from taking effect until the legislature first passed the single-payer program into law.2California Legislative Information. ACA-11 Taxes to Fund Comprehensive Universal Single-Payer Health Care Coverage and a Health Care Cost Control System
Why the 2022 Bill Failed
January 31, 2022 was the last day AB 1400 could have advanced from the Assembly. Assemblymember Kalra, the bill’s author, chose not to bring it to a floor vote after determining he was short of the 41 votes needed by double digits. The decision spared fellow Democrats a politically difficult vote on a bill that had no chance of passing.
The funding question loomed largest. ACA 11’s tax increases were substantial, and many legislators were unwilling to vote for a program whose annual costs were projected in the hundreds of billions without more certainty about savings. Business groups organized aggressive opposition, arguing that the payroll and gross receipts taxes would drive employers out of the state. The health insurance industry, which would have been effectively eliminated under CalCare, also spent heavily against the bill.
Democrats held a supermajority in both chambers at the time. The failure wasn’t a story of partisan gridlock but of internal disagreement within the majority party over whether California could realistically absorb the financial and administrative risk of replacing private insurance for nearly 40 million people.
Where the Effort Stands Now
After AB 1400 collapsed, the approach shifted from one sweeping bill to a slower, more incremental strategy. Governor Newsom signed SB 770 in October 2023, directing the Secretary of California Health and Human Services to begin formal talks with the federal government about creating a unified healthcare financing system.3California Legislative Information. California State Legislature – SB-770 Health Care Unified Health Care Financing
SB 770 doesn’t create a single-payer system on its own. It sets deadlines for the Secretary to build the groundwork:
- January 1, 2025: deliver an interim report to the legislature covering policy priorities, preliminary analysis, and proposed statutory language for federal waiver applications.
- June 1, 2025: complete a draft waiver framework, post it publicly, and open a 45-day comment period.
- November 1, 2025: submit a final report to the Governor and legislature with the finalized waiver framework and specific elements for a formal waiver application.
SB 770’s findings estimate that California could save more than $500 billion over the next decade under a unified financing system, even after expanding coverage to eliminate cost-sharing and add long-term care services for all residents. The law describes a system with comprehensive medical, behavioral health, dental, vision, and pharmaceutical benefits; no cost-sharing for essential services; a progressive financing structure that caps what anyone pays as a share of income; and pooled purchasing that could use Medicare rates as a starting point for provider payment.3California Legislative Information. California State Legislature – SB-770 Health Care Unified Health Care Financing
Assemblymember Kalra reintroduced a version of the single-payer bill in 2026. It follows a similar framework to AB 1400, covering every Californian under state-administered insurance and requiring the state to pursue federal waivers, but takes a different funding approach. Rather than specifying taxes upfront, the reintroduced bill calls for the legislature to develop revenue sources after the policy framework is established. Whether that strategy attracts more votes or simply delays the same fight that killed AB 1400 is unresolved.
The Federal Legal Barriers
Any version of California single-payer runs into the same set of federal obstacles. These aren’t hypothetical concerns. They are structural limits written into federal law that would have to be cleared before a state-run system could operate as designed.
Medicare and Medicaid Waivers
CalCare’s finances depend on redirecting federal money currently flowing through Medicare, Medicaid, and Affordable Care Act subsidies into the state system. Without those dollars, California would need to raise even more in taxes to cover people who already have federal coverage. Section 1332 of the ACA lets states apply for “innovation waivers” to redirect certain federal subsidies, but only if the state’s alternative plan covers at least as many people with benefits at least as comprehensive and affordable as the federal baseline, without increasing the federal deficit.
Medicare is harder. No existing waiver mechanism cleanly allows a state to absorb Medicare beneficiaries into a state-run program. Either Congress would need to pass specific legislation authorizing the transfer, or the Centers for Medicare and Medicaid Services would need to approve an unprecedented demonstration waiver. Either path is politically contingent on who controls the White House and Congress at the time California applies.
ERISA Preemption
The most stubborn barrier is ERISA, the federal law governing employer-sponsored health benefits. ERISA preempts state laws that regulate employer health plans, even when the state law doesn’t directly conflict with federal requirements. Because roughly 155 million Americans get coverage through employer plans, this preemption effectively shields a large portion of California’s insured population from state-level reform. ERISA preemption can’t be waived by a federal agency. Changing it takes an act of Congress. Every serious state single-payer proposal has acknowledged this barrier, and none has solved it.
What This Means for Californians Today
Nothing has changed about how Californians get or pay for healthcare. AB 1400 is dead, SB 770 is a research and planning exercise rather than a coverage program, and the 2026 reintroduction faces the same political headwinds that killed its predecessor. What the effort has produced so far is policy groundwork: waiver frameworks, cost analyses, and governance models that would let California move faster if political conditions align.
The financial stakes cut both ways. Supporters point to SB 770’s finding of $500 billion in potential savings over a decade and argue that the current system’s fragmentation, administrative overhead, and uninsured population cost far more than the taxes needed to fund CalCare. Opponents counter that projected savings from government-run healthcare consistently prove optimistic, that the tax burden would drive businesses and high earners out of state, and that a system serving nearly 40 million people cannot be administered without the kind of rationing and wait times seen in other single-payer countries.
California’s trajectory depends on two things largely outside the legislature’s control: whether the federal government grants the waivers needed to make the finances work, and whether Congress addresses ERISA preemption. Without both, even a legislature willing to pass the bill would be building a system with a hole in its foundation.