Two Times and Counting
The Legislative History of California’s Blocked Elder Care Bill The Empathy Gap — The Empathy Gap — Article 3 of 4
In the previous article in this series, I described a data infrastructure that makes the exploitation of nursing home residents visible to anyone with an internet connection. The staffing records are public. The citation histories are public. The financial disclosures are public. The harm is documented, coded, and posted on government websites.
And yet, in California — a state that prides itself on progressive governance, on protecting the vulnerable, on leading the nation in consumer protections — the single most important piece of legislation designed to stop that exploitation has been introduced three times. Once, the governor vetoed it outright. Once, it was quietly buried in the Senate before it could reach his desk. The third attempt is drafted and awaiting assignment before proceeding to the legislature, its fate still to be decided. The reasons why this keeps happening tell us something important, not just about nursing home policy, but about who actually governs California, and for whom.
First, What Was Actually Accomplished: SB 650
Before cataloguing the failures, it is worth acknowledging what did pass — because the gap between what passed and what was needed illuminates exactly what has been blocked.
In 2021, Senator Henry Stern (D-Los Angeles) authored SB 650, the Corporate Transparency in Elder Care Act, which Newsom signed into law. The bill required skilled nursing facilities to file annual consolidated financial reports with the state — disclosing ownership structures, related-party transactions, and the financial statements of every entity connected to the facility at 5% ownership or above. Organizational charts became mandatory. The shell company architecture that private equity uses to obscure the flow of money — from Medicaid reimbursements into management fees, rent payments, and related-party contracts — became, at least on paper, visible. (JD Supra, National Law Review, Crowell & Moring)
SB 650 was meaningful — in principle. But its implementation was drawn out to a degree that itself tells a story. Newsom signed the bill in October 2021. HCAI did not finalize the implementing regulations until late 2023, after two lengthy comment periods. The first consolidated financial reports were not due until April 2024 — for fiscal years ending December 31, 2023 — and meaningful public data only began appearing on the HCAI website in 2024 and into 2025. Three years from signature to usable information. (HCAI, Moss Adams, Crowell & Moring)
Researchers, journalists, and advocates like CANHR can now trace ownership structures that were previously buried in layers of LLCs. That is real. But it was transparency without teeth, and transparency that took three years to produce. Knowing where the money goes is not the same as stopping it from going there. SB 650 created a window — slowly, partially, and only after sustained advocacy pressure to implement what had already been signed into law. What advocates needed — and what the legislature has three times refused to provide — was a wall.
The Wall That Never Got Built: Two Failures, One More Attempt
AB 2079 (2022): The First Veto
In 2022, the California legislature passed AB 2079 — a bill that would have established a minimum spending floor requiring nursing homes to direct a set percentage of their Medicaid revenue toward direct patient care. The logic was straightforward: if a facility is receiving public dollars to care for elderly and disabled Californians, a defined portion of those dollars must actually reach the residents. (AB 2079 Veto Message)
Governor Newsom vetoed it.
His stated rationale was technical: the bill’s rebate mechanism conflicted with a new quality-based reimbursement structure being implemented simultaneously under the state budget. Advocates read the objection as precisely that — a technical pretext. The governor had the tools to reconcile the two approaches. He chose not to use them. (AB 2079 Veto Message)
What the veto letter did not mention: that nursing home industry operators and their affiliated organizations had donated substantially to Newsom’s political campaigns. ReNew Health Consulting Services — a nursing home management company operating troubled facilities — had given $10,000 to his 2018 campaign and another $10,000 to his 2022 re-election campaign. When LAist’s investigative reporting surfaced the second donation, Newsom returned it to charity. He kept the first. (LAist)
AB 1537 (2023–2024): Death by Inaction
Two years later, Assembly Member Jim Wood introduced AB 1537, a revised version of the spending floor bill. It passed the Assembly. It moved to the Senate. And then, in August 2024, it was ordered to the “inactive file” — legislative shorthand for a bill that will not receive a vote — at the request of Senator Henry Stern (D-Malibu). (LegiScan, CalMatters Digital Democracy)
No floor vote. No public debate on the merits. No veto that could be overridden or publicly challenged. The bill simply disappeared.
The name is worth pausing on. Senator Stern was the same legislator who authored SB 650 — the transparency bill described in the previous section as a genuine, if limited, achievement. The man who created the window was the man who blocked the wall. Whether that reflects political pragmatism, industry pressure, or the seductive appeal of half-measures is a question Senator Stern has not been required to answer publicly. (Valentine Law Group)
The nursing home industry had spent at least $10 million lobbying California lawmakers over the preceding decade, with donations reaching at least 105 of the 120 current legislative members. In a system where that money flows to the very legislators who decide which bills receive floor votes, “death by inaction” requires no explanation beyond the math. (Los Angeles Times)
The 2026 Bill: The Third Attempt
The bill now before the legislature — drafted in January 2026 under the reference number RN 2601159 — is the most carefully constructed version yet. Its authors have clearly studied the previous defeats and attempted to address every technical objection that has been raised.
The core mechanism: a phased spending floor requiring nursing homes to direct 75% of Medicaid revenue to direct patient care beginning in 2027, rising to 80% in 2028 and 85% in 2029. Facilities that fail to meet the floor must pay rebates into a dedicated Skilled Nursing Facility Patient Care Fund — money that returns to resident care rather than disappearing into the general fund.
The bill strengthens ownership accountability: tighter definitions of “related parties,” mandatory disclosure of all entities in the ownership chain, and automatic disqualification from new facility licenses for operators with a history of serious violations. It closes the shell company escape hatch that has allowed operators to shift money to affiliated entities and then claim the facility itself is operating at a loss.
Perhaps most significantly, the 2026 bill includes a private right of action: any person — not just the state — may bring a civil lawsuit against a facility failing to meet the spending requirement, with the successful plaintiff receiving 50% of the civil penalties recovered. This is not a minor technical provision. It means that if the state refuses to enforce the law, advocates, families, and organizations like CANHR can do so directly, without waiting for CDPH to act.
The Newsom Factor
University of California San Francisco researcher Charlene Harrington — one of the nation’s foremost authorities on nursing home policy, and a Californian who has watched this legislative history play out in real time — does not mince words about where the obstruction lies.
“When you have a governor who is running for president,” she told KFF Health News in 2025, “they’re susceptible to tremendous influence. Nursing homes have been very effective in arguing that they’re losing money.” (KFF Health News)
This is not a fringe critique. It is the assessment of a distinguished researcher with decades of experience studying exactly this policy space. And the pattern she describes is visible in the public record: three bills, three failures, sustained industry lobbying, and a governor whose political ambitions require the goodwill — or at minimum the neutrality — of industries with money to spend.
The French Laundry dinner of November 2020 was not a nursing home policy decision. But it was a revealing data point about whose reality registers with this governor, and whose does not. While Californians could not visit dying parents in nursing homes — could not hold their hands, could not sit with their grief — the governor was dining, unmasked, at one of the world’s most expensive restaurants with lobbyists and their spouses. He apologized. He called it a mistake. And then, twice more, he declined to sign legislation that would have protected those same residents his constituents had been forbidden to visit. (Politico, FOX 11, Los Angeles Times)
The through-line is not cruelty. It is distance. The empathy gap is not always dramatic. Sometimes it is simply the inability — or unwillingness — to register that the people affected by your decisions are as real as the people in the room with you.
What Changes When the Governor Changes
Gavin Newsom cannot run for governor again. His term ends in January 2027. The question of who succeeds him is, therefore, also the question of whether this bill has a future.
As of April 2026, the leading Democratic candidate in the governor’s race is Tom Steyer — billionaire, climate activist, and the man who made a very public point of leaving the financial world to fight the concentrated power he had once been part of. His campaign platform explicitly calls for eliminating “profits for intermediaries providing healthcare” and states that “there is too much profit, and not enough health care, in our health care system.” The California Nurses Association — 100,000 members strong — has endorsed him, with their president stating flatly that “incrementalism won’t work.” (NY Post, Tom Steyer for Governor, National Nurses United, Politico)
Steyer has also received the endorsement of Rep. Ro Khanna — the same congressman who brought the term “Epstein Class” to the House floor and who has been among the most vocal critics of concentrated wealth and unaccountable power in American politics. (Tom Steyer for Governor)
None of this is a guarantee. Politicians in office govern differently than candidates on the trail. But the contrast with Newsom’s record could not be starker — and for advocates who have watched three bills die, the possibility of a governor whose stated convictions align with the legislation is not nothing. It is, in fact, the opening that has not existed for years.
The June 2 primary is the moment to press that opening. Before candidates lock in their positions, before the general election calculus takes over, there is a window to ask — publicly, directly, on the record — where each candidate stands on the SNF minimum spending requirement. A commitment made during a campaign is a governing obligation afterward. That is how civil society shapes legislation: get the promise before the election, then hold the governor to it.
The Money Trail Is Public
For readers who want to verify the claims in this article, the documentation is available without a subscription, a lawyer, or a public records request:
Campaign contributions to Newsom from healthcare industry donors: California Secretary of State PowerSearch at powersearch.sos.ca.gov
Lobbying expenditures by nursing home industry associations: California Fair Political Practices Commission at fppc.ca.gov
AB 2079 veto message: publicly archived at gov.ca.gov
AB 1537 legislative history: CalMatters Digital Democracy at calmatters.digitaldemocracy.org
HCAI nursing home financial disclosures: hcai.ca.gov
The data is there. The pattern is visible. What remains is the political will to act on it — and whether the people most directly affected by that pattern are willing to make themselves impossible to ignore.
That is the subject of the final article in this series.
Next: Article 4 — “Your Story Is Evidence”: A call to nursing home residents, families, and caregivers to lift their voices — and why, in 2026, those voices have more power than they have had in decades.
If your family has experienced nursing home neglect, abuse, or financial exploitation, your story matters — and it is evidence. Visit Everyday Elders to share it, on your terms. Stories may, with your permission, be shared with advocacy and legal organizations working to hold operators accountable.