Study Finds Healthy California Act Will Cost Billions Less and Cover Millions More Than Current System

May 31, 2017

Middle class families and California businesses would pay less and receive more coverage


SACRAMENTO, CA – A study by national researchers released today found that the Healthy California Act (Senate Bill 562) will save billions of dollars while expanding coverage to uninsured and underinsured Californians.

“Healthcare costs Californians billions and one-third of people with healthcare still don’t have enough coverage,” said Senator Ricardo Lara. “The good news is that California can get a lot more for our money and reduce the costs of healthcare for middle class families and businesses.”

“This study adds to the evidence that SB 562 is the right policy for California’s future," said Senator Toni G. Atkins. "Our healthcare system is complex, and we have much work in front of us to make sure that the Healthy California Act is done correctly. We will get there.”

Here are some of the findings of the economic analysis by a team of economists at the Political Economy Research Institute (PERI) at the University of Massachusetts Amherst, led by nationally known economist and author Robert Pollin.

The total cost of healthcare in California will fall from $368.5 billion to $331 billion with the passage of SB 562.

Middle class families will pay less for healthcare. The average middle class family will see their out of pocket costs fall by 9% if they now buy insurance, and 2.6% if they get insurance from their employer.

Businesses will pay less for healthcare. Small businesses with fewer than 9 employees who provide healthcare will see costs fall by 22%. Middle-sized business with 10-19 employees will pay 13% less.  Even large businesses with 500 employees will pay less.

Healthy California will give full coverage to the estimated one-third of Californians who are underinsured and burdened with high out of pocket costs.

Healthy California cuts costs through better administration and lower prescription drug costs. Having one publicly run system will reduce inefficiency and missed prevention opportunities, similar to Medicare now.

The California Nurses Association/National Nurses United is the sponsor of Senate Bill 562 and sponsored the study.

Click here to read the study: