U.S. workers, employers face biggest health insurance price hike in decades, renewing calls for voters to pass Prop 40 in November

Full original release

LOS ANGELES, CALIFORNIA – New reporting reveals that U.S. workers and employers are set to be hit with the largest health insurance cost increases in at least 20 years. 

Prop 40 supporters have been warning for months that federal healthcare cuts would trigger massive health insurance cost increases for workers and employers, as costs get pushed to the private market.  Now that warning is becoming a reality, and California’s employers and working families are paying the price.  According to the Wall Street Journal’s story U.S. Workers Are Paying More for Healthcare, and Next Year Will Be Worse:

• “Surging healthcare costs are walloping U.S. workers, and they will only worsen next year. For 2027, employers may be facing the biggest health-insurance increase in at least two decades.”

• “Americans with workplace coverage spent an average $5,297 this year on healthcare, $388 more than 2025, according to a new estimate from benefits-consulting firm Aon. The spending represents a combination of payroll deductions for premiums and out-of-pocket charges like deductibles and copays.”

• “The burden is likely to grow significantly next year, when U.S. employers expect their healthcare costs to go up by 11.1%, according to a new survey from WTW, another big benefits consultant—the steepest rise in more than 20 years.”

• “As companies are forced to pay more for insurance, their workers, who typically pay a share of the premium, are seeing their own costs rise roughly in tandem. That means more dollars are held out of their paychecks each month.”

• “Americans are paying more out of pocket for healthcare in the form of deductibles, copayments and coinsurance, as well as expenses not covered by their insurance, according to federal data.”

“When employers spend more on health insurance, there is less money available for wages,” wrote Glenn Melnick, director of USC’s Center for Health Financing, Policy and Management, in an April opinion piece for CalMatters. “Rising premiums are, in effect, a hidden pay cut for working families.”

Hundreds of elected officials, labor unions, and community-based organizations have endorsed Prop 40 as an urgent and necessary solution to keep hospitals open and healthcare costs from skyrocketing. 

This month alone, the California State Democratic Party, the California Nurses Association, and the state’s largest labor group, the California Federation of Labor Unions, AFL-CIO, all voted to endorse the Billionaire Tax, showing that Democrats and working families are united behind Prop 40. 

The number of major supporters of the Billionaire Tax has far outpaced the number of groups opposing. Supporters include U.S. Senator Bernie Sanders, Representative Ro Khanna, Teamsters California, AFSCME California, SEIU-UHW, Committee of Interns and Residents / SEIU, UNITE HERE Local 11, UNITE HERE Local 30, AFT Local 1521, Disability Voices United, Our Revolution California, Oxfam America, Color of Change, and many more. 

Voters consistently support the California Billionaire Tax by large, double-digit margins. A new poll of likely 2026 California voters found that the billionaire tax holds a strong double-digit, 19-point lead statewide, with voters supporting it by a 57% to 38% margin. Support rises dramatically among constituencies that form the backbone of the Democratic Party, with 80% of Democrats and 70% of union members supporting Prop 40.

Prop 40 qualified for the ballot after supporters submitted more than 1.6 million signatures from Californians across the state — nearly twice the number required to qualify — making it one of the strongest citizen-led ballot qualification efforts in California history.

The funds from Prop 40 will go to life-saving medical care for seniors, veterans, and families. It will allow millions of Californians to keep their health insurance and not see their premiums skyrocket. It will also help prevent teacher layoffs in our public schools and keep children fed through food assistance. 

Prop 40 will give Californians the opportunity to vote “yes” to save their healthcare, with 90% of funds raised going toward stabilizing the state’s healthcare system and protecting healthcare for all Californians, and 10% funding food aid and supporting K-14 public education. 

Impact of federal healthcare cuts 

• Dozens of hospitals and ERs will close; dozens more will be forced to cut back services and lay off healthcare workers. The patient care crisis will worsen as patients are forced to wait longer and drive further for medical care. 
• Up to 3.4 million Californians could lose their healthcare coverage under Medicaid, including many seniors, children, veterans, and people with disabilities 
• The state could lose about $30 billion in federal healthcare funding every year — destabilizing the health care system and driving up health care costs for everyone.
• Insurance premiums for Californians who purchase Affordable Care Act plans could rise as much as 97%, and an estimated 400,000 Californians could be priced out of healthcare altogether. 

Impact of food assistance cuts

• Currently, 5.5 million Californians benefit from food aid. 3.5 million are senior citizens and children.
  
• At least 754,000 people could lose their entire monthly benefit, with over 3 million households facing reductions.
  
• The estimated funding loss is $2.5 to $4.5 billion annually.
  
• The SNAP/Cal-Fresh cuts, if not backfilled by other funding mechanisms, are expected to cost California approximately 400,000 jobs over the next nine years.

About Prop 40, the California Billionaire Tax Act

Trump’s “Big, Ugly Bill” slashed funding for healthcare in California to pay for more billionaire tax breaks. These cuts eliminate healthcare coverage for up to 3.4 million Californians and double health insurance premiums for millions more. Prop 40, the California Billionaire Tax Act, will make billionaires finally pay their fair share in taxes to keep local hospitals and ERs open and healthcare affordable for millions of Californians.

Vote YES on Prop 40 to save lives, tax billionaires. 

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