These Legal Hurdles Could Trip Up Universal Health Care in California

On Wednesday, the State Assembly’s Select Committee on Health Care Delivery Systems and Universal Coverage wraps up hearings assessing possible paths the state could follow to get to universal care for all Californians. On Monday, the panel considered some of the federal and state legal hurdles California lawmakers could face if they pursue a radical revamp of the health care system.

Here are the main obstacles:


Federal legal hurdles aren’t necessarily insurmountable, but they would require cooperation from Congress and the Trump administration.

  • Covered California — The state runs the Affordable Care Act insurance exchange, but most of the rules that govern Obamacare are federal. Major changes to the program would require extensive negotiation with the U.S. Department of Health and Human Services.
  • Medi-Cal — California’s Medicaid program relies on a mix of state and federal funding. States have a lot of room to change their programs, but the feds have the final say. While the Trump Administration has given states more flexibility to place additional restrictions on Medicaid eligibility and benefits, it’s unclear whether it would support a move to greatly expand eligibility.
  • Medicare — Since Medicare is a federal program, California can’t unilaterally make changes to eligibility, financing or benefits. If a dramatic restructuring of the state’s health care system was designed to affect Medicare recipients, Sacramento would have to negotiate with the Department of Health and Human Services over a number of statutory, regulatory and administrative issues. Health and Human Services does have a Center for Medicare and Medicaid Innovation that allows for experiments with different models.
  • ERISA — The Employee Retirement Income Security Act comes into play for programs that affect employer-provided health insurance. The 1974 federal law governs employee benefits at work, so any change California might want to make to how people get insurance through their jobs would require a change in ERISA, or an exemption to certain provisions (Hawaii has been granted one). In either case, state lawmakers could be facing tough negotiations with Congress.


The state would most likely need to significantly raise taxes to fund a single-payer system or some other approach to universal health coverage. That means state laws that govern taxes would probably come into play.

  • Prop. 98 — The 1988 law amended the state Constitution to guarantee a minimum level of general tax funding for education from kindergarten through community college. When the state has wanted more money for other priorities, it has gotten around this requirement by setting up special funds. But the California Budget and Policy Center believes that wouldn’t work in the case of health care. It says the voters would likely have to amend the state Constitution to allow for much greater spending on health care.
  • Gann Limit — Prop. 4, approved by voters in 1979, limits how much tax money the state can keep. Above a certain threshold, funds have to be returned to taxpayers. To make health care funding exempt from the limit, the state would have to amend the law.

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