California Renewal of Health Plan Tax Needs Federal OK

California will seek federal approval for its renewal of a tax on managed care organizations that expired in July and that would bring in $1.7 billion in Medicaid funding.

Gov. Gavin Newsom (D) Sept. 27 signed A.B. 115 to renew the tax, clearing the way for the state to ask the federal Centers for Medicare & Medicaid Services for approval.

• Managed care plans would be repaid all but $16 million of the $2.5 billion in tax they pay through reimbursements for services they provide to Medicaid enrollees.
• California would use the tax revenue to get matching federal Medicaid funding, and ...