Health advocates support bill revamping health plan tax

Proposal prevents health cuts with extended and revamped managed care organization (MCO) tax, continuing federal funding stream with virtually no impact on health plan premiums

SACRAMENTO—Yesterday, the California Legislature revealed its proposal to revamp the managed care organization (MCO) tax. In his state of the state address last month, Governor Jerry Brown stated his commitment to find a solution to revamp this tax which funds health care services for the poor. Not passing this tax would leave a $1.1 billion hole in the state budget.

“California needs to revamp and renew the managed care organization tax, so we don’t lose critical federal funds for our health system. Maintaining this funding stream helps prevent a billion dollars in cuts to health care, on top of the cuts made during the recession that have yet to be restored,” said Anthony Wright, executive director of Health Access California, the statewide health care consumer advocacy coalition.

“In the years when the state budget was in deficit, hideous cuts to the Medi-Cal program were enacted, some of which have not yet been restored. We must avoid doing back to the dark days of denying Californians the care they need by eliminating benefits, reducing eligibility or cutting provider reimbursement. California does not need a $1 billion hole in its Medi-Cal budget.”

“There is a long tradition of bipartisan legislative support for the MCO tax and other health provider taxes to help leverage federal funds. We support this proposal and look forward to working with the Administration and Legislature to pass it.” said Wright.