Antelope Valley, California – Karen Sanchez has been seeing the impact of a new federal law firsthand, one patient at a time. For ten years, Sanchez, an outpatient laboratory technician, has greeted S, a man in his 30s with Down syndrome, every few months at a hospital in this rural part of Los Angeles County. S arrives with a caretaker, always breaking into a smile when he sees Sanchez and her now-familiar purple hair. But the routine visits are shadowed by a new reality: the requirements of the One Big Beautiful Bill Act (OBBBA), passed in July 2025, which mandates that patients like S re-verify their eligibility for Medi-Cal, California’s version of Medicaid, every six months.
“It is hard for him to even grasp the changes,” Sanchez said, voicing concerns shared by healthcare workers across the state. The OBBBA, designed to save $100 billion in expenses, increases paperwork and work requirements for those seeking coverage, potentially eliminating benefits for those who don’t qualify. Sanchez fears patients with complex medical conditions, like S, “can just fall through the cracks” in the new system.
The looming changes have ignited a fierce debate in California, culminating in a proposed tax on the state’s wealthiest residents. The Service Employees International Union (SEIU-UHW), representing healthcare workers like Sanchez, is championing a one-time 5 percent tax on individuals with assets exceeding $1 billion, aiming to offset the funding losses stemming from the federal law. Senator Bernie Sanders is scheduled to launch a campaign in Los Angeles on Wednesday evening to gather the 875,000 signatures needed to place the measure on the November ballot, with retroactive application to January 1, 2026, for those residing in the state at that time.
The proposal has deeply divided California’s political and economic landscape. Google cofounders Larry Page and Sergey Brin have reportedly purchased homes in Florida and relocated some companies, signaling a potential shift in their tax status. Patrick Kallerman, vice president at the Bay Area Council, argues the tax isn’t targeted at billionaires but at “California’s economy.” Rob Lapsley, president of the California Business Roundtable, issued a statement calling the $100 billion tax increase a threat to the state’s economic ecosystem, impacting jobs, investment, and public services.
California, boasting the world’s fourth-largest economy if it were a country, is particularly vulnerable to the potential exodus of its wealthiest residents. Governor Gavin Newsom, facing a nearly $3 billion budget deficit exacerbated by federal funding cuts, has distanced himself from the ballot measure, stating billionaires should not move out of the state due to a tax unlikely to pass, according to Rocket News.
Despite the opposition, Sanchez and her union colleagues are actively collecting signatures, spending evenings at a local brewery to meet the April deadline. The effort comes as California grapples with the implications of the OBBBA, which will impact 14.5 million Medi-Cal recipients – more than any other state. Over a third of California residents, and half of its children, rely on Medi-Cal, a figure attributed to the state’s large population and historically less stringent eligibility checks, according to Marc Joffe, president of the Contra Costa Taxpayers Association and a visiting fellow at the California Policy Center.
Proponents of the tax argue it addresses a fundamental imbalance. Darien Shanske, a law professor at the University of California at Davis, said the “moment of crisis” created by the OBBBA spurred the drafting of the tax, highlighting the limitations of existing income tax structures in reaching the ultra-wealthy. Critics, however, contend the estimated number of coverage losses is overstated, suggesting those able to work could fulfill requirements through employment or community involvement. New undocumented migrants will not be enrolled this year and will face a $30 coverage fee starting next year.
A key point of contention lies in the taxation of intangible assets, such as equity shares, common among successful startup founders. Opponents argue this “punishes people for being innovative,” creating an emotional and perceived injustice. Facebook founder Mark Zuckerberg is reportedly considering a $200 million home purchase in Miami, potentially joining other billionaires leaving California, according to The Wall Street Journal. Google’s cofounders terminated or moved 15 related companies from the state before the January 1, 2026, date of the proposed tax, as reported by The New York Times. Palantir chairman Peter Thiel, who has also reportedly relocated, donated $3 million to a political committee opposing the measure.
Despite the financial firepower arrayed against it, the SEIU-UHW maintains the threat of capital flight is a “scare tactic.” Back at the hospital in Antelope Valley, Sanchez anticipates an increasing number of patients facing partial coverage costs. As the only trauma hospital within a 65km radius, she fears reduced Medi-Cal payments could compromise services, envisioning patients traveling long distances for critical care. Rural hospitals and home-based care, already vital employment sources in these communities, are particularly vulnerable to the OBBBA cuts.
Political analyst Daniel Schnur, from the University of California, Berkeley’s Institute of Government Studies, believes the measure is likely to qualify for the November ballot, citing the opportune timing. A 2025 Harris poll revealed 94 percent of respondents believe a wealth gap exists, with 71 percent supporting a wealth tax. A January poll by the Mellman Group showed 48 percent support for the California tax, against 38 percent opposition.
As Governor Newsom navigates this deeply divided landscape, the fate of California’s healthcare system, and its wealthiest residents, hangs in the balance. The question remains: what legislative solution, if any, will Newsom pursue to address the potential fallout from the OBBBA and the proposed billionaire tax? The outcome will likely be “litigated up to the Supreme Court,” according to Joffe of the California Policy Center, leaving the future of healthcare access in California uncertain.
