Dive Brief:
- California's state Senate pulled together enough bipartisan support Monday to pass a set of three bills designed to take the place of a previous tax on managed healthcare plans that no longer comply with federal rules, leaving more than $1 billion in federal matching money for Medi-Cal at stake, the San Jose Mercury News reports.
- The bills drew much of their support by also calling for the first substantial funding increase for services for developmentally disabled Californians in more than 10 years.
- Republicans speaking on the Senate floor prior to the vote said they remained divided on the legislation, but it passed 28 to 11.
Dive Insight:
The plan has won support from most state health insurers and the California Association of Health Plans because the $1.27 billion tax would be paired with the elimination of other insurer taxes. That arrangement is intended to keep insurers from passing any increased expense on to consumers.
As a result, the industry overall is expected to pay about $100 million less in taxes, as the Associated Press notes, while the state increases its revenue through increased federal matching funds.
The impact to individual insurers will vary depending on their individual circumstances.
It may appear less favorable to nine plans that are not subject to the current state tax, which only targets those that accept Medi-Cal patients.