The Real Stakes Behind California’s Billionaire Tax Fight: Health Care Access

Just as California’s billionaires would prefer, the public conversation around a proposed one-time tax on a fraction of their immense wealth has become centered on a single threat: They’ll leave and take their money with them if the tax passes.

It’s a wild notion unsupported by history, but you can expect to hear more about it all the way to the Nov. 3 general election. That is partly because the billionaires themselves are spending huge in an effort to defeat the measure — with some of the largest contributions coming from those, like Google co-founder Sergey Brin, who claim they’ve already fled the state.

But there is another piece of the conversation that consistently isn’t getting enough attention here. It is the question of what California’s health care landscape will look like in the face of the Trump administration’s wholesale attack on Medicaid and the deep funding cuts that follow — reductions that revenues from the 2026 Billionaire Tax Act are meant to partly offset.

Increasingly, that landscape appears treacherous. And as recent comments from the CEO of one of Southern California’s most prominent nonprofit health systems make clear, the fallout will hit the state’s most vulnerable residents the hardest.

“The house of cards didn’t just weaken,” Chris Van Gorder, president and CEO of San Diego-based nonprofit Scripps Health, said in an essay posted to the health care industry site Becker’s Hospital Review. “It collapsed.”

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For years, rural hospitals and community clinics have walked a tightrope financially. These operations form the core of California’s safety net health care system (more than 14 million residents rely on Medi-Cal, the state’s version of Medicaid, for their coverage), but reimbursement rates from both Medicaid and Medicare have for years run below the actual costs of providing care.

The projected cuts from H.R. 1, which will slice as much as $30 billion a year from California’s Medi-Cal funding, turn that problem into an existential crisis. Already, Los Angeles County has closed seven clinics. Planned Parenthood also shuttered at least five clinics in the state, and a recent report by the consumer rights group Public Citizen concluded that federal cuts put 83 California hospitals at risk of either closing, reducing services or laying off staff.

Scripps Health, a $5 billion integrated health system that serves between 600,000 and 700,000 patients a year, will survive, but that doesn’t mean its services won’t have to be reduced or modified. That’s nothing compared with what faces smaller clinics and health groups, many of which have already eliminated some services and implemented severe austerity measures.

“Over the past decade, health systems have streamlined operations, reduced administrative overhead and implemented technology to improve care delivery,” Van Gorder said. “There is no excess left to trim without affecting patient care.”

His words echo almost precisely those of scores of health care executives, politicians, doctors and nurses with whom I’ve spoken over the past several years. Their message has been plain: Extreme financial hardships mean their systems and clinics won’t be able to deliver the care they should to the lower-income workers and families who depend on them.

“We don’t have services to cut,” Rena Salamacha, CEO of the Mee Memorial Healthcare System in King City, California, told me last year. The system, in southern Monterey County, serves a community of largely immigrant agriculture workers, and it leans heavily on Medi-Cal reimbursements to keep the doors open. But between Gov. Gavin Newsom walking back coverage for undocumented workers and the funding issues that H.R. 1 will exacerbate, the system is in for more rough times.

Under heavy financial pressure, Mee Memorial Hospital closed its labor and delivery services seven years ago. It’s the only health facility for 50 miles in any direction.

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It is situations like this that the Billionaire Tax Act is meant to address. It would raise an estimated $100 billion over five years, with most of the revenue being used to offset as much as possible the Trump-led, GOP-approved Medicaid cuts contained in the so-called One Big Beautiful Bill Act.

Proponents of the California plan submitted nearly 1.6 million voter signatures to the state, more than twice the amount required to place it on the November ballot. The measure is being led by the Service Employees International Union-United Healthcare Workers West, which represents many of the workers whose jobs could be threatened by systems either closing or reducing services. (Disclosure: SEIU is a financial supporter of Capital & Main.)

When people can’t see a doctor because they either lack coverage or can’t afford it, it kicks into motion a chain of events that impoverishes the entire state, health experts said. Those patients remain sick, often going to work or school that way; they endure medical conditions that only worsen over time; and, lacking any other option, they ultimately wait until their situation is so dire that they head straight for the emergency room — the one place they know they can’t be turned away.

Providing that emergency care without reimbursement, the hospital itself begins to suffer financially. But the hospital doesn’t serve only low-income patients.

“We all use one door for the emergency room,” Jarrod McNaughton, CEO of the Inland Empire Health Plan in San Bernardino and Riverside counties, told me. “If that door is no longer there, it doesn’t just impact Medi-Cal patients — it impacts the entire community that that hospital or provider serves.”

Taxing the ultra-wealthy, even in technology-rich California, won’t fully make up for the federal funding cuts. But to the millions who are at risk of losing their coverage, the plan represents a lifeline.

And this is where the conversation should land, not on the vague and intentionally scary notion that some ultrawealthy residents will bolt because of a one-time, 5% tax on their wealth — which they would be given five years to pay.

It’s probably easier to talk about the prospect of rich people fleeing the state than it is to help voters see the long-term consequences of hollowing out California’s safety-net health system. But that doesn’t change the reality: Clinics and hospitals are under siege. The state’s collective health depends upon finding solutions.

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