Jerry Brown’s proposal to expand health plan tax sputtering
http://www.sacbee.com/news/politics-government/capitol-alert/article22347993.html
Gov. Jerry Brown’s plan to make more managed care organizations pay a state tax – one likely to be passed on to consumers – is meeting resistance at the Capitol.
A major part of Brown’s proposed health care budget, the expanded tax on managed-care organizations would raise an estimated $1.7 billion to help pay for health care for the poor and pay for a court settlement ending a years-long legal fight over reduced hours for home-care workers....
California has had several versions of a health plan tax since 2005, and the current one imposes a 3.94 percent levy on the earnings of health plans that serve people receiving Medi-Cal, the state’s health insurance program for the poor. Today, the money attracts federal matching dollars that flow back to 27 Medi-Cal managed care plans that currently pay the tax.
That tax expires next year, but renewing it in its current form is a nonstarter. That’s because the Obama administration has told California and other states that such taxes need to be broad-based and apply to all health plans – including the dozen in California that do not have any Medi-Cal patients and thus would not receive any federal matching dollars for serving them.