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California lawmakers could vote this week on a proposal to restructure a tax on health care plans in order to avert a potential $1 billion state budget hole.
This “managed care organization” (MCO) tax brings in federal funds for Medi-Cal, California’s health care program for the poor. The federal government say the state’s current structure is no longer acceptable – and must be fixed by the end of June for the state to keep getting the money.
So Gov. Jerry Brown and health plans have been negotiating for months – and now talks are in the final stages.
Any deal would require Republican votes to pass the Legislature. There are signs that the votes could be there for the right deal as long as it's “revenue neutral“ – that is, the federal funds offset any tax liability to the health plans so the insurance companies don’t pass costs on to the rest of us.
A deal would also likely include funding increases for in-home care for the elderly and disabled (known as in-home supportive services or IHSS), and programs that benefit people with developmental disabilities.