insurance

A proposal to tax California’s billionaires has fractured Democratic politics, repelled some of the state’s richest residents and exploded into a costly battle that’s overshadowing even the gubernatorial election.

Known as Proposition 40, the ballot measure is also dividing the very industry it’s supposed to help. The healthcare workers union behind the initiative, which would authorize a wealth tax on billionaires, says the levy would raise sorely needed funds to shore up health coverage.

By contrast, leading California hospital and doctor groups are opposing the measure ahead of the November vote. They say the one-time 5% levy on the state’s wealthiest is a risky gambit with an uncertain path to victory — as well as a distraction from other proposals to shore up healthcare.

“This is an experiment on a taxation scheme that’s not been done before, and it puts healthcare in a more vulnerable position as a result,” California Medical Assn. Chief Executive Dustin Corcoran said at a recent briefing in Sacramento. “It’s not a healthcare ballot measure.”

Less than six weeks before election day, polls show a divided electorate. But whatever the outcome, the fight is exposing a broader problem confronting California: how to preserve one of the nation’s largest expansions of publicly funded healthcare as a big chunk of the money that helped pay for it disappears.

Over the last decade, California increased access to publicly funded healthcare by broadening eligibility for Medi-Cal, the state’s Medicaid program, and other types of insurance, allowing millions more residents to gain coverage. The number of people without insurance fell to 2.4 million in 2024 from about 6.5 million in 2011.

Now, that trend is expected to reverse. According to the Congressional Budget Office, President Trump’s budget bill last year will lead to $1 trillion in healthcare-related cuts over a decade. Earlier this week, the Trump administration said it recently removed 760,000 people from Obamacare plans across the nation, alleging that some were enrolled improperly and others don’t exist.

Combined with strict work requirements, more frequent eligibility checks and a pullback in state spending pushed by Democratic Gov. Gavin Newsom, the changes are projected to push California’s uninsured population under the age of 65 to 4.6 million by 2030, according to the UC Berkeley Labor Center.

“Without trying to be melodramatic, when millions of people lose coverage, it is entirely predictable that thousands will die unnecessarily because of foregone treatment,” said Dave Regan, president of SEIU-UHW, the healthcare-workers union pushing the billionaire tax.

“There is an absolute consensus on what the problem is, and there’s a consensus that there’s no other solution on the table,” he said in an interview at Bloomberg’s San Francisco offices.

Even before the budget cuts start to bite, financial strains are mounting at institutions such as Martin Luther King Jr. Community Hospital in South Los Angeles.

MLKCH’s waiting room is now mostly used for treating patients, with 16 wooden cubicles functioning as care rooms. Sick or injured people are also cared for in the hospital’s front hallways and in what used to be the meditation chapel and the gift shop.

The hospital opened in 2015 with an emergency department built for 25,000 visits annually. In 2024, it handled 130,000. Dr. Elaine Batchlor, its CEO, said further funding reductions “would threaten the sustainability of the hospital.”

Batchlor isn’t taking a position on Proposition 40 and has been looking for other sources of revenue. SEIU-UHW’s Regan argues there’s no other way to raise the money needed to fill the massive gap.

The California Budget & Policy Center estimates the state stands to lose roughly $30 billion in federal Medi-Cal funding each year. Asking California lawmakers for that amount is a “fool’s errand,” Regan said. “And on top of that, the only people the legislature will tax are ordinary people.”

The union estimates the levy would raise $100 billion over five years, with 90% earmarked to shore up health coverage amid impending budget cuts.

Critics dispute the projection. The state’s nonpartisan Legislative Analyst’s Office says the tax would probably raise tens of billions of dollars, but potentially reduce income-tax revenue in the long run, as some ultrawealthy residents depart the state.

Recent polls show an increasingly contested path for Proposition 40. A recent UC Berkeley-Politico poll found 45% of likely voters in favor, but opposition has increased since early this year and now stands at 43%. A separate Public Policy Institute of California survey put support at 52% and opposition at 46%.

Led by Sergey Brin, wealthy opponents have poured almost $230 million into funding Building a Better California, according to a filing late Thursday. That’s helping them flood the airwaves with anti tax advertising. There are also two competing ballot measures designed to torpedo Proposition 40 if they pass.

Billionaires aren’t the only detractors. Critics have also assailed Proposition 40 for carving out an exception to California’s constitutional funding rules to steer most proceeds to healthcare. While the state generally earmarks at least 40% of General Fund revenue to public schools and community colleges, the billionaire-tax proposal excludes the new levy from that calculation.

Corcoran, the medical association chief, argues that even if Proposition 40 passes in November, legal challenges would potentially delay its implementation for years.

“There’s a lot that we can do looking ahead to 2028 when these cuts start taking greater effect that frankly would provide more immediate relief than Proposition 40 would,” he said. His group and others are pushing instead for large corporations to help cover the cost of public insurance for their workers.

Regan called that proposal “the worst public policy on planet Earth,” saying costs will be passed on to consumers and that it essentially acts as a payroll tax on low-wage workers.

He also disputed the notion the billionaire tax would lead the ultrawealthy to leave the state, pointing to Nvidia Corp. CEO Jensen Huang, who earlier this year said he would be “perfectly fine” with the levy. As for legal challenges to the billionaire tax, Regan said he believes they can be resolved in 12 months.

The uncertain funding picture has many hospitals bracing for cuts.

James Suver, CEO of Ridgecrest Regional Hospital, about 150 miles north of Los Angeles, said he’s not betting on proceeds from the billionaire tax. He’s weighing options that include pausing maternity care again, cutting physician recruitment and reducing emergency-room service.

“Our future under the most likely scenario is not looking very good,” Suver said. “We’re beyond doing minor nips and tucks to be able to offset some of the changes that I suspect may be happening in the future.”

Clanton writes for Bloomberg. Kara Wetzel of Bloomberg contributed.

RIYADH: Trade can grind to a halt before ports close or shipping lanes are blocked. Disruption can begin elsewhere, when cargo or vessels become too costly or difficult to insure, or when markets are unable to provide adequate coverage for war-related risks.

Against a backdrop of rising geopolitical risks in the region and their spillover into maritime traffic, insurance and reinsurance markets, Saudi Arabia is moving to establish a national framework to help keep trade flowing even in a highly volatile maritime environment.

In response, the Cabinet approved the establishment of the “Saudi War Risks Insurance Pool for Cargo and Vessels,” a step aimed at building domestic insurance capacity to address risks that could drive up transportation and trade costs or constrain global insurers’ ability to provide coverage.

The initiative is also intended to help ensure the continuity of goods flows and support businesses involved in transportation and logistics.

The move is particularly significant for Saudi Arabia as it expands its role as a trade and logistics hub. The competitiveness of ports and distribution centers depends not only on cargo-handling speed and transport costs, but also on companies’ ability to price and manage risks when geopolitical conditions change abruptly.

Saudi Finance Minister Mohammed Al-Jadaan said after the Cabinet approved the mechanism that the Saudi marine insurance pool was a specialized national mechanism designed to support the continuity of trade and supply chains through a public-private partnership.

He said the pool would directly enhance the technical preparedness of the domestic insurance market and expand its capacity to provide the necessary coverage under rules and frameworks set by the Insurance Authority.

He added that the initiative would strengthen the resilience of the national economy and help safeguard its stability amid regional and international crises and challenges.

Industry specialists who spoke to Asharq Al-Awsat said the pool’s economic value would be most evident during crises, when insurance premiums surge or insurers and reinsurers tighten their acceptance of risks associated with particular regions.

They said a stable insurance safety net could give transport companies, importers and exporters greater room to plan and continue operating.

A stable insurance environment

Logistics specialist Nashmi Al-Harbi said rising shipping risks in the Red Sea and the Gulf had prompted some insurers to tighten their conditions for covering vessels linked to the region.

That makes the establishment of the Saudi pool particularly timely for domestic transport and logistics companies, he said, as it would help reduce one of the main sources of uncertainty affecting international shipping contracts.

Al-Harbi told Asharq Al-Awsat that international companies doing business with Saudi Arabia, or whose cargo passes through its ports, would also benefit from greater clarity and stability in the insurance environment.

He said the pool’s scope would not be limited to vessels based in the kingdom but would extend to activities and companies with Saudi interests, subject to approved eligibility and coverage requirements.

Al-Harbi said providing stable war-risk coverage would make Saudi Arabia more attractive as a regional hub for storage, distribution and re-exporting.

Logistics companies do not consider only port, transport and cargo-handling costs when selecting destinations, he said. They also take into account the costs of risks to goods and vessels throughout their journeys.

The cost of risk

Supply chain and logistics expert Khalid Al-Ghamdi said the importance of the Saudi war-risk insurance pool went beyond providing coverage for vessels and cargo.

It also addressed a deeper challenge facing businesses: the difficulty of predicting risk costs when geopolitical conditions change suddenly.

Al-Ghamdi said a national war-risk safety net would give Saudi logistics companies greater stability when planning voyages, signing contracts and setting prices.

Companies managing thousands of containers need to know more than the cost of fuel, transport and cargo handling, he said.

They also need greater certainty about insurance costs so that insurance risks do not suddenly become a heavy financial burden or an obstacle to keeping voyages in operation.

The decision sends a message to international logistics companies that Saudi Arabia is continuing to build a business environment capable of operating even when shipping is disrupted, he said.

That could become an additional factor in decisions by global companies when choosing ports and distribution and re-export centers.

Al-Ghamdi added that the selection of a logistics hub was based not only on location and transport costs, but also on its ability to absorb shocks and manage risks associated with trade flows.

Strengthening that capacity could improve supply-chain resilience, bolster international companies’ confidence and create opportunities for more effective risk-management partnerships, he said.

Insurance pool arrangements

The initiative establishes a national insurance mechanism bringing together the public and private sectors under the supervision of the Insurance Authority.

It is intended to strengthen the domestic insurance market’s ability to handle war risks associated with maritime transport and mitigate the effects of volatility and rising reinsurance costs in global markets.

The initiative also aims to enhance Saudi Arabia’s competitiveness as a logistics hub at a time when more flexible tools are needed to manage the risks facing trade and transport.

As part of its implementation, the Saudi Reinsurance Company, known as Saudi Re, said that the Insurance Authority had selected it to lead and structure the pool’s arrangements, with participation from insurers operating in the domestic market.

Saudi Re will manage the pool’s technical operations and reinsurance arrangements. Beneficiaries will be able to obtain coverage through participating insurers under approved terms and conditions.

Initiative’s objectives

The Insurance Authority has identified four main objectives for the pool: enhancing the insurance market’s preparedness and capacity to absorb marine insurance risks; supporting the continuity of trade and supply chains; limiting the effects of sharp volatility and higher reinsurance costs in global markets; and strengthening Saudi Arabia’s competitiveness as a major logistics hub.

The pool will cover cargo transported by land, sea and air, as well as marine hull insurance against covered damage and risks.

It will also cover charterers’ liability and provide protection and indemnity coverage, offering broader protection to parties involved in transport and trade.

Eligible beneficiaries include exporters and importers; vessel owners and operators; shipping, freight and maritime transport companies; businesses involved in cargo movements, logistics and supply chains; and Saudi insurers participating in the pool.

International models

Saudi Arabia is not alone in adopting such a mechanism. Other countries have established national pools to address rising war risks and difficulties in obtaining coverage from traditional insurance markets.

India offers a recent example. This year, it launched a marine insurance pool with a total capacity of $1.5 billion, including a $1.4 billion sovereign guarantee, to cover war risks affecting vessels and cargo linked to Indian interests.

India’s experience demonstrated the scale of demand for such coverage. The scheme issued more than 1,600 policies within weeks of beginning operations, while war-risk insurance premiums fell by about 35% to 40% from the peaks recorded during the escalation of regional tensions.

The trend reflects a shift in how countries manage maritime war risks — from relying entirely on global insurance and reinsurance markets to developing domestic capacity that can help keep trade moving when coverage becomes more expensive or private insurers’ appetite for risk declines.

Los Angeles County launched a probe into Farmers Insurance Company’s handling of claims by policyholders impacted by last year’s devastating Eaton and Palisades wildfires, after a growing number of residents complained of delays, denials and underpayments.

In a letter sent to Farmers on Wednesday, the county’s lawyers said if the company is engaging in any unlawful or unfair business practices, it must immediately stop.

“Eaton Fire survivors did everything right—responsibly paying their premiums year after year—but when disaster hit, Farmers left them with a contaminated home and refused to pay for testing and cleanup,” said Los Angeles County Supervisor Kathryn Barger, who represents Altadena, in a statement.

“My constituents shouldn’t have to walk back into homes with lead and asbestos because an insurance company won’t pay for the test that would prove it’s there,” she added.

Farmers disputed the county’s claims.

“As always, we operate in accordance with applicable laws and regulations,” the insurer said in a Thursday statement. “We do not believe the inquiry accurately characterizes our actions or practices and will cooperate through the appropriate process.”

“Serving our customers during difficult times is at the heart of what we do, which is why each claim is reviewed individually, taking into account the specific circumstances of the loss and the coverage provided under the policy,” the company said. “We remain focused on handling claims with care, consistency and attention to each customer’s unique situation.”

County officials said that at a recent meeting with Eaton fire survivors, those with Farmers policies said the insurer had been slow or resistant to pay for toxin testing by qualified industrial hygienists, forcing residents to pay for it themselves.

The testing revealed that many homes were contaminated with unsafe levels of lead, asbestos, chromium, and other toxic substances, the county said.

The residents also told the county that Farmers has refused to pay for adequate remediation of the contaminants and declined to cover ongoing living expenses.

“After paying millions of dollars in premiums, policyholders deserve the benefits and support they paid for,” said Supervisor Lindsey Horvath, whose district includes Pacific Palisades. “Families whose homes survived the Palisades and Eaton Fires but remain damaged or contaminated should not be forced to choose between returning to an unsafe home and financial devastation.”

The new investigation comes after the county filed a lawsuit against State Farm on Aug. 31 for its handling of Eaton and Palisades fire claims. The county claims State Farm engaged in illegal and deceptive business practices that kept victims from receiving what they were entitled to under their policies. State Farm denied the county’s claims.

After two of his children fell ill on an all-inclusive Jet2 trip to Turkey, Blake Chapman decided to abandon the holiday and fly home – but says he was left £10,000 out of pocket

A furious dad says he was left £2,000 out of pocket after a holiday nightmare – despite having paid for travel insurance. Blake Chapman flew out with his 29-year-old partner Abbey Andrews and their three children Keeton, 11, Tobias, 3, and Vienna 1, on August 6. They had paid for 10-day £8,000 all-inclusive Jet2 holiday in the Turkish resort of Alanya.

But the family’s holiday started to go wrong just two days after they landed in Turkey, when Blake and Abbey’s youngest child, Vienna, fell ill with symptoms of severe food poisoning. “It started happening with my one-year-old two days in,” Blake said. “She was completely fine then it got to about 11:15pm and she started projectile vomiting, really bad diarrhoea, temperature.

“Because we were in a different country we panicked. I ran down to reception, they told me that they’d call an ambulance. They got to the hospital, they put an IV drip in Vienna.”

Soon after arriving at the hospital, Blake was presented with a £2,000 bill. “I argued it because I said that we’ve got insurance and I paid for the higher insurance,” he said. “In the end I just paid it.”

But things went from bad to worse when the couple’s three-year-old son Tobias began to show the same symptoms.

Blake said: “The following day around 1.00pm we all got out of the pool just about to get some dinner and it happened to my three-year-old Tobias. We kind of knew what to expect this time. Tobias was being sick in the hospital.”

Faced with the prospect of a second massive bill, Blake refused hospital treatment for Tobias and consulted a pharmacist instead.

Meanwhile, although Blake had been given an explanation for Vienna’s symptoms, he didn’t entirely believe it. He continued: ”We got the doctor’s report and they put it down to dehydration but I’m like a helicopter dad, I took the kids all over the world, we’ve never had a problem.

“When Vienna went to hospital she had a blood test and they said she’s got high white blood cells so that indicated an infection. I don’t believe it is dehydration because I’m not going to sit with a one-year-old in the beaming sun.”

With two of his children seriously unwell, Blake made the decision to abandon the holiday: “My plan was ‘let’s get out of here, let’s fly home’,” he says.

Blake says he tried to get hold of the Jet2 rep without success, so he called the company direct. Despite being told that his insurance claims could potentially take months to process, Blake and Abbey decided to leave the hotel before anyone else fell ill, spending another £950 on flights, arriving back in the UK on August 11.

“It’s put me off all-inclusives,” Blake says. “I would never go to Turkey again in my life from this experience.

He stressed that he wasn’t holding anyone responsible, but was frustrated by the slow process of his insurance claim. ”I’m not blaming the hotel, I’m not blaming the hospital for us being ill but it was how we were left in the dark,” he said.

“It’s very frustrating, very emotional. What I want to do is spread awareness because people think if you go all inclusive with the full travel insurance too then you’ll be OK if anything happens – but we were asked to pay thousands.”

A spokesperson for Jet2holidays said: “We were very sorry to hear that members of the Chapman family became unwell during their holiday. Our in-resort team made attempts to contact the family to offer support, but they had already departed before we were able to speak to them.

“Our teams on the ground work tirelessly to support customers throughout their holidays, and we remain committed to providing help whenever it is needed.”

Some issues can make it harder to find affordable travel insurance

Expert advice has been issued for many Brits planning to go abroad. People with disabilities and long-term medical conditions are being warned to shop around for travel insurance as their health history can send premiums soaring.

Having a medical condition does not mean you cannot get travel insurance – but it can make finding affordable cover considerably harder. Research by Which? highlighted in a new post on X on Wednesday, September 2 found that seven in 10 of its members who had bought travel insurance in the previous two years had declared a medical condition. While most said this had only a minor effect on their ability to find an insurer willing to cover them, many reported that their condition pushed up the price.

One in four said their medical conditions had a major impact on what they paid. The problem can become particularly acute for older travellers.

Data from Compare the Market cited by Which? suggests customers aged over 65 pay roughly double once their medical conditions are taken into account. And simply buying a standard travel policy without declaring a condition could leave holidaymakers dangerously exposed.

Insurers usually require travellers to disclose their medical history, with specialist medical screening companies assessing the risks involved. The resulting risk assessment can affect whether an insurer will provide cover and how much it charges.

But different insurers can make different decisions – meaning it pays to shop around rather than accepting the first quote.

Specialist policies to consider

Which? assessed policies from specialist providers and identified several as Best Buys. Saga came out on top, with its Plus annual multi-trip policy scoring 82%.

It provides up to £20 million of medical expenses cover, £20,000 cancellation cover and £10,000 for baggage and valuables. Saga’s Plus single-trip policy scored 81%, while its Standard annual multi-trip policy scored 77%.

Staysure Signature scored 74%, with unlimited medical expenses cover, £15,000 cancellation cover and £5,000 for baggage. AllClear Platinum scored 70%, also offering unlimited medical expenses cover.

Which? also highlighted InsuranceWith’s Platinum policy, which scored 68% and includes £5,000 of gadget cover.

Don’t hide your medical condition

Travellers should be completely open about their health when buying cover. A medical condition may result in a higher premium or an exclusion being added to a policy. An exclusion could mean claims linked to that condition are not covered – potentially leaving someone facing a huge bill if they become ill abroad.

Which? insurance expert Dean Sobers said there is a reason it publishes information about the medical screening companies used by insurers. The organisation found that 80% of the policies it assessed used Verisk for medical screening, while 12% used Protectif.

This can matter because insurers may reach different decisions about whether to cover someone – and what to charge – even when the same screening process is involved. He said: “When searching for quotes, you may have found yourself answering what feels like identical health-related questions over and over even when trying different insurers. You’re not imagining it: medical screening is outsourced by most travel insurers, with the vast majority using just two firms – Verisk and Protectif.

“While the insurer makes the ultimate decision about how much to charge you, the different approaches of the screening companies can lead to a different picture of your risk. Verisk, for example, asks you to state the name of your medical condition, while Protectif begins by asking you which medications you’re taking and works backwards from that.

“No particular screening company is necessarily going to deliver a cheaper quote, but if you feel like you’ve hit a brick wall with one, trying another could be worth it.”

Specialist insurers are specifically designed to deal with travellers who may be rejected, heavily loaded or offered limited cover by mainstream providers. And with the cost of holidays already high, shopping around could make the difference between being properly protected and taking a potentially disastrous gamble by travelling without adequate insurance.

Los Angeles County announced Monday that it had filed a lawsuit against State Farm General after hundreds of victims of last year’s devastating wildfires complained that their claims had been delayed, denied or underpaid.

The lawsuit alleges that State Farm engaged in illegal and deceptive business practices that kept victims of the Palisades and Eaton fires from receiving what they were entitled to under their policies.

County officials said their investigation into the complaints found unreasonable delays in processing claims, as well as “systematic underpayments.”

Officials said they also found that State Farm had illegally suppressed smoke damage claims.

“Survivors are just asking for what’s right,” L.A. County Supervisor Kathryn Barger, who represents Altadena, said at a Monday news conference.

Bob Devereux, a State Farm spokesman, said in a statement that the company would respond to the lawsuit through the legal process.

“State Farm General strongly disagrees with Los Angeles County’s characterization of our wildfire claims response,” he said.

Devereux said that State Farm has so far paid more than $6.2 billion on claims related to the two wildfires, including about $1 billion for smoke-related damage. About 78% of the claims have been closed, he said.

“We continue working directly with customers whose claims remain open and evaluating each claim based on the facts of the loss and the coverage provided by the customer’s policy,” he said.

“Our focus remains on helping customers recover,” he said.

Wildfire victims praised county officials for the lawsuit, which was filed in L.A. County Superior Court.

Joy Chen, executive director of Every Fire Survivor’s Network, said at the news conference that, in the months after the fires, it became apparent in talking to victims that those with State Farm policies were not getting the benefits they had paid for.

She said for those families, insurance had become “a barrier to recovery” rather than a safety net.

“Nineteen months after the fires, families are still suffering,” she said.

The county’s investigation included looking at complaints that Chen’s group and others had collected, as well as hundreds of other documents from State Farm policyholders.

County officials said that State Farm “failed to substantially comply” with their requests for documents and information during their investigation.

With more than 2.8 million residential and commercial policies, State Farm is California’s largest private insurer.

The county’s lawsuit includes dozens of complaints of L.A. County fire victims.

“After six decades of paying thousands a year for insurance, we expect them to honor their agreement,” said one family.

Many families say the insurer refused to test their homes for toxins left by smoke.

The lawsuit claims that State Farm “drastically lowballed” estimates of financial losses for destroyed or partially damaged homes.

“They offered us $11,000 to remediate our five-bedroom house,” complained one family. ”That’s only 13% of the actual cost.”

According to the California Department of Insurance, 11,300 State Farm policyholders filed homeowner claims arising from last year’s L.A. County fires.

The lawsuit asks the court to require State Farm to pay full restitution to policyholders, as well as civil penalties for violating state law.