As of January 1, 2020, California residents must maintain qualifying health insurance throughout the year. This requirement applies to each resident and their spouse or domestic partner. A tax penalty on Californians will be imposed on those who don’t have health insurance.

Gov. Gavin Newsom proposed an Individual Mandate and State Healthcare subsidies in which 850,000 Californians could get help paying their premiums for people with too high of an income to qualify for federal financial aid but still have trouble affording coverage. Some small business owners in California are forced to consider whether to grow their business and not have insurance or pull back from their practices for a couple of months to lessen their income so that they still qualify for insurance.

As taxes increase, disposable income is reduced, slowing the growth of the economy. As long as an increase in government demand does not offset that reduction in consumer demand, total demand decreases. Only the federal government can print more money, just like raising taxes. This has potential economic consequences, however (in the form of higher inflation), as well as political consequences. Nevertheless, the federal government does have that option, which is certainly not open to households, businesses, and health care.

There are some problems with universal health care; healthy people pay for the other’s medical needs, primarily chronic and pre-existing conditions. More access to health care also increases the line at hospitals, clinics, etc. 

Proponents say “free” healthcare for all would eliminate premiums, copays, and deductibles for everything from major surgery, to dental, vision, hearing, and mental health services. Others believe that enormous tax increases for all would prepay whatever health care services the government chooses to provide.

The question for debate is, should California increase taxes to provide more healthcare coverage to those without insurance?