Medi-Cal: managed care organization provider tax.
Vote required
Two Thirds
Fiscal committee
No
Appropriation
No
Current location
Chaptered
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Senate
- Passed Assembly
- To Governor
- Became Law
Overview
This bill establishes a managed care organization (MCO) provider tax in Medi-Cal, a health coverage program for low-income individuals in California. The tax is intended to provide ongoing funding for the program, specifically for increased capitation payments to managed care plans, nonfederal share of Medi-Cal rates, and other program needs. The bill also creates a Medi-Cal Stability Fund to hold these tax revenues and directs the Department of Health Care Services to seek federal approval for the tax and to ensure it complies with federal requirements. It ultimately phases out the existing MCO provider tax and replaces it with this new system, subject to federal approval.
Key provisions
- Imposes an $8.85 per countable enrollee per month tax on health plans.
- Deposits tax revenues into the Medi-Cal Stability Fund.
- Funds the Stability Fund for administrative costs, increased capitation payments, and Medi-Cal managed care rates.
- Requires the Department of Health Care Services to seek federal approval for the tax.
- Sets the tax period from 2027 to 2029.
- Establishes a process for modifying the tax amount based on enrollment data.
- Creates a mechanism for waiving interest or penalties if a health plan faces financial hardship.
- Phases out the existing MCO provider tax by January 1, 2032, contingent on federal approval.
Who is affected
- Medi-Cal recipients
- Managed Care Organizations (MCOs)
- Health Plans
- California Residents
Bill text
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Sponsors
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1 on record
Primary sponsor
Committee on Budget and Fiscal Review
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