California Managed Care Tax to Boost Medicaid Pay, Doctor Corps (1)

California lawmakers’ decision to reinstate a tax on managed care organizations might serve as a catalyst for addressing systemic inequities within the state’s Medicaid program, advocates and state officials say.

The MCO provider tax will force managed care plans operating within the state to pay up to $192.50 per enrollee, in turn generating $19.4 billion in additional funding over three years. Some $11 billion of the funding will go toward increasing provider reimbursement rates, creating new residency slots for incoming doctors, and helping out struggling hospitals.

The tax was part of a sweeping budget bill passed June 15 by both ...