California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

California Association of Health Plans Opposes Two Tax Bills

The California Association of Health Plans is officially opposing two bills (ABX2-4, ABX2-17) that aim to generate additional funding for Medi-Cal, the state's Medicaid program, by expanding taxes on some health insurance plans, the Sacramento Bee's "Capitol Alert" reports.

Background on Bills

ABX2-4, by Assembly member Marc Levine (D-San Rafael), would impose a $7.88 monthly flat tax per enrollee on all California managed care plans in an effort to raise nearly $2 billion annually for Medi-Cal, In-Home Supportive Services and other health care programs (Miller, "Capitol Alert," Sacramento Bee, 9/3).

ABX2-17, by Assembly member Kevin McCarty (D-Sacramento), would repeal a provision of law involving not-for-profit hospital corporations regulated under the Knox-Keene Act (Gorn, California Healthline, 9/1). It would shift oversight of certain health plans from the Department of Managed Care to the Department of Insurance's jurisdiction, generating about $300 million in funding for Medi-Cal.

Details of CAHP's Opposition

In an opposition letter last week, CAHP wrote, "We believe that ABX2-4 increases taxes on the private sector by about $1.2 billion," adding, "Our member health plans believe that the proceeds of any [managed care organization] tax should go back to Medi-Cal managed care to bolster the program. In contrast, ABX2-4 funds other programs with revenue from the tax."

Meanwhile, the group wrote that ABx2-17 would "arbitrarily" move some insurers "from one regulator to another without a valid reason, causing major disruption in the marketplace for consumers and providers" ("Capitol Alert," Sacramento Bee, 9/3).

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