(SACRAMENTO, CA) The California State Legislature passed a bill authored by Assemblymember Bob Blumenfield (D-San Fernando Valley) to extend a tax on managed health care organizations in order to save health care for 300,000 low-income children provided through the Healthy Families Program.
“We finally reached a bipartisan breakthrough to narrowly avert disaster,” said Blumenfield. “Low-income parents across California have been sick with worry for months, not knowing if at any moment the state would revoke their children’s insurance. This has been a very scary situation with a simple solution. By signing this bill, the governor can alleviate the fears of these parents.”
Supported by advocates for children’s health and the industry subject to the tax, Assembly Bill (AB) x1 21 is a one year extension of the annual gross premiums tax of 2.35% assessed on Medi-Cal managed care organizations (MCOs) to help fund the Healthy Families Program. The plan will generate upwards of $200 million which, when accounting for matching federal funds, will generate almost $500 million to support health care services provided through the program.
“Absent this funding, the program has an enormous shortfall and will be forced to take health care from three hundred thousand children to avoid collapse,” added Blumenfield.
Healthy Families provides health, dental and vision coverage to nearly 1 million children and teens who do not have insurance and do not qualify for free health care through Medi-Cal. It is a public private partnership where the state works with managed care plans to provide health care, and those enrolled in the program pay monthly premiums and copayments during physician visits.
Existing law provides that insurers – including property insurance, life insurance, casualty insurance and some preferred provider organizations and point of service plans - are assessed a 2.35% tax on their annual gross premiums. Health care service plans, including Medi-Cal managed care plans, were not subject to the gross premiums tax until 2009 when the Legislature passed the California Children and Families act which established the tax that ended this year.
ABx1 21 passed the Assembly with a 61-9 vote after a 34-2 Senate vote on September 2. It now goes to the governor who will have 12 days to act on the bill. Further information is available at http://www.leginfo.ca.gov.
Contact: Anthony Matthews, tel. (916) 319-2040
