CALIFORNIA Gov. Jerry Brown on Tuesday, March 1, signed into law three bills designed to avoid a $1.1-billion cutoff in federal funding for Medi-Cal, which provides health insurance coverage to nearly one-third of Californians.
The state’s current tax, which would have expired on July 1, applies to only 26 plans that accept Medi-Cal patients. Revenue collected from these plans is used to fund the program. The new tax meets a federal government demand that the an extension of the levy must apply to all managed care organizations so that the state can receive matching federal funds for the health care program.
“Democrats and Republicans came together today to do what’s best for California,” Brown said in a statement after the state legislature approved the bills. “This legislation will save money and help millions of people with health care and disability services.”
The new plan includes tax offsets to minimize the impact on health plans that could potentially be absorbed by consumers. It was supported by many health insurers, including Anthem and Blue Shield.
“The proposal provides a stable ongoing funding source for Medi-Cal,” said Sen. Ed Hernandez (D-West Covina), who led the effort to pass the bill. “It allows California to maximize its share of existing federal dollars, and we’re always complaining that we don’t get our fair share. It will not negatively impact premiums.”
Bipartisan support was required for the new tax, including at least one Republican vote in the Senate and three GOP votes in the Assembly.
Though Republicans are typically tax-averse, the new tax received support from two GOP members in the Senate and 11 in the Assembly. Democrats unanimously voted in favor of the measure.
“Collectively, we came up with something that’s really good,” said Assemblyman Brian Maienschein (R-San Diego).
However, some Republicans who voted against the plan are concerned that the replacement tax will unavoidably be passed on to consumers.
“Is there anything written in this bill that would codify the fact there would be no increases to any citizens of California? No,” said Sen. Jeff Stone (R-Riverside). “The bottom line is the consumer will get hurt with this bill.”
Before the new tax goes into effect, it requires approval from the Obama administration, which state officials are optimistic about.
It took months of negotiations before the state senate and assembly came to the final deal.
To secure Republican support, the package included several components, such as allocating additional funding for Californians with developmental disabilities and forgiving a budget debt owed by skilled-nursing facilities.
Both chambers also unanimously approved on Monday a separate measure that allocates about $300 million to services for about 300,000 developmentally disabled Californians. It boosts wages for staff at regional centers and provides additional money for independent-living programs. This bill also
The third bill approved provides about $240 million to pre-fund retiree health care for public workers and pay back a $173 million transportation loan.
