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MCO Tax Deal Passes Legislature
capital public radio

The California Legislature has handed Gov. Jerry Brown a victory more than a year in the making. On Monday, lawmakers approved a restructured tax on California health insurers to avoid a $1 billion state budget deficit.

Brown first called for a new tax on “managed care organizations,” or MCOs, in January of last year to save $1 billion a year in federal Medi-Cal funds.

The deal that won bipartisan approval Monday is backed by the health insurance industry, which has promised not to pass the tax on to consumers through higher health care premiums.