MCO Tax Bill Concurrently Passes Through the Legislature

February 29, 2016

FOR IMMEDIATE RELEASE                        
Contact: Janet Chin (626) 430-2499
(Sacramento, CA) – Today, on a Senate Floor vote of 28-11, Senator Ed Hernandez, O.D. (D–West Covina), Chair of the Senate Health Committee, passed measure SBX2 2, a specialized tax on Managed Care Organizations (MCO) that will help stabilize Medi-Cal funding and provide significant resources for those with developmental disabilities. The bill later passed the Assembly Floor on a vote of 61-16.

The way the MCO tax swap proposal is structured is very complex, but the net effect of the proposal is actually quite simple. The tax will provide stable and ongoing funding for Medi-Cal and allow California to maximize its share of existing federal dollars without negatively impacting premiums. It will deliver a $106 million net benefit to plans and provides appropriate funding to our developmental services community, who have suffered much too long.
“With more than 12 million people in our state on Medi-Cal, it’s more important than ever that we do all we can to bolster the program,” stated Senator Hernandez, “This bipartisan plan brings in almost $8 billion in federal support to Medi-Cal over three years and frees up much needed funding for the developmentally disabled community.”
SBX2 2 replaces California’s current MCO tax which sunsets on July 1, 2016. 
"Passing this measure today proves that Government still works, and that Democrats and Republicans in California can come together, across party lines, to solve real problems” said Hernandez. “It’s nice to see members putting politics aside to do what’s right for California.”

This proposal has earned broad support from the California Association of Health Plans, CalChamber, California Medical Association, California Dental Association, California Hospital Association, Planned Parenthood, and others.

The bill will now go to the Governor for his signature.