KHN Morning Briefing

Summaries of health policy coverage from major news organizations

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Gov. Brown Signs Law To Expand Tax On California’s Managed Care Insurers

The package is designed to help avoid losing more than $1 billion in federal matching funds for Medi-Cal, California's Medicaid program for low-income residents.

San Francisco Chronicle: Brown Expands Health Industry Tax
Gov. Jerry Brown signed legislation Tuesday to expand a tax on the health insurance industry so that the state doesn’t lose $1 billion in federal funding. Under the expansion, managed-care organizations — such as Blue Shield, Cigna and Aetna — will have to pay the state tax regardless of whether they serve Medi-Cal patients. Previously, only those serving Medi-Cal patients had to pay the tax and received federal matching funds to offset it. The newly added health plans will get a break on their corporate and insurance taxes so they don’t raise patients’ premiums. (Gutierrez, 3/1)

Bay Area News Group: California Legislature Approves Replacement Tax On Health Care Plans
Passing the tax was a top priority for Gov. Jerry Brown and Democratic legislative leaders because it will help the state avoid a cutoff of more than $1 billion in federal matching funds for Medi-Cal, the state health insurance program for low-income Californians that now covers about one-third of the state's residents. The $1.27 billion tax cleared the state Senate on a 28-11 vote and then sailed through the Assembly 61-16 with support from almost a dozen GOP lawmakers, including Assembly Republican leader Chad Mayes. (Calefati, 3/1)

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