Assemblymember Ash Kalra, a San Jose Democrat, introduced Assembly Bill 1900 in February 2026. If passed, it would lead California to transition to CalCare — a single-payer health care coverage system. This is not Kalra’s first attempt; he has introduced similar legislation in 2022, 2023, and 2024, all of which died at various stages of the legislative process.
AB 1900 establishes the policy framework for a single-payer system in California and is intended to be considered separately from a financing proposal. Until a financing proposal is passed, the costs would be limited to convening the CalCare Board and Public Advisory Commission to develop a transition plan. Once fully financed, California would begin implementing CalCare, which would ensure all Californians; regardless of employment, income, or immigration status can get health care free at the point of service.
The bill is co-authored by 20 legislators and was introduced in partnership with the California Nurses Association. Supporters point to a new poll showing nearly two-thirds of California voters want transformational changes to the health care system, and more than 40 percent of voters say it has become harder to afford health care in recent years.
On the opposition side, Republican Assemblymember Kate Sanchez posted that legislative analysts estimate the cost at over $500 billion — nearly double California’s current budget. The most significant and immediate concern for California hospitals would be a dramatic reduction in reimbursement rates. Currently, hospitals rely on commercial insurance to offset losses from Medicare and Medicaid. Under a single-payer system, that cross-subsidy disappears entirely.
Private insurers currently pay hospitals an average of 37% more than traditional Medicare reimbursement, while Medicaid pays 21% less. This gap explains why hospitals depend heavily on commercial payer revenue to stay financially solvent. A transition to CalCare would likely set rates closer to Medicare or Medicaid levels, representing a potentially catastrophic revenue loss for California hospitals and health systems.
Critics argue that CalCare would generate savings by underpaying health care providers. Without the ability to transfer costs to patients with private insurance — as happens today — doctors and medical professionals would have an incentive to leave California. The decline in medical professionals could create access issues, longer wait times for procedures, and restrictions on innovative therapies.
The Congressional Budget Office, in its national analysis of single-payer options, found that a single-payer system would reduce administrative costs by approximately 1.8% of GDP while also increasing health care utilization, placing significant new demand on hospital capacity. More patients, at lower reimbursement rates, with a constrained workforce is a difficult equation for hospital operations. The Congressional Budget Office has also conducted the most comprehensive federal analysis of single-payer systems. Key findings relevant to hospital and health system leaders include that providers would likely respond to lower reimbursement rates by improving capital utilization and labor productivity — but this adjustment would take years and involve significant disruption.
States With Similar Bills
California is not alone. Several states are actively pursuing or studying single-payer proposals:
New York has the longest-running campaign. The New York Health Act (S3425) has been reintroduced in every legislative session since 2015 and would create a universal single-payer health plan for every New York resident funded by broad-based revenue based on ability to pay.
Colorado has taken a study-first approach. On May 14, 2025, Colorado enacted legislation requiring the Colorado School of Public Health to assess how to implement a single-payer system and deliver model legislation by December 31, 2026. This follows a 2016 ballot initiative (Amendment 69) to establish ColoradoCare that was rejected by nearly 80% of voters, largely due to cost concern projections showed the system would have created a $7.8 billion deficit by year ten.
Bottom Line for Health Systems
If AB 1900 were to advance and eventually be financed and implemented, the impact on California hospitals and health systems would likely be severe in the near term. The elimination of commercial insurance revenue which currently subsidizes the losses from Medicare and Medicaid would threaten the financial viability of many hospitals, particularly rural and safety-net facilities.
California experts are already warning that current funding pressures could result in loss of staff, closures of hospitals and clinics in underserved areas, and an overall deterioration of the provider infrastructure and that’s without a single-payer transition. Layering dramatically lower reimbursement rates on top of the current environment would be among the most disruptive policy changes in the state’s health care history.