News Headlines Article

Brown expands health industry tax
San Francisco Chronicle

Gov. Jerry Brown signed legislation Tuesday to expand a tax on the health insurance industry so that the state doesn’t lose $1 billion in federal funding. Under the expansion, managed-care organizations — such as Blue Shield, Cigna and Aetna — will have to pay the state tax regardless of whether they serve Medi-Cal patients. Previously, only those serving Medi-Cal patients had to pay the tax and received federal matching funds to offset it. The newly added health plans will get a break on their corporate and insurance taxes so they don’t raise patients’ premiums. The Obama administration told state officials in 2014 that the state’s tax on managed-care organizations violated federal law because it singled out plans that accept Medi-Cal patients.