Governor’s May Revision Update: Health Insurance Affordability Proposals [Publication Details]

May 15, 2019 - With the May Revision (and prior to the May Revision with the release of proposed implementing legislation), the administration has provided additional details on its January proposal to impose a state individual mandate and use penalty revenues from the mandate to fund health insurance subsidies.
https://lao.ca.gov/Publications/Detail/4047

Fiscal Outlook: Medi-Cal

Nov 14, 2018 - Expiration of Managed Care Organization (MCO) Tax Current MCO Tax. Since 2016-17, the state has imposed a per-member tax on Medi-Cal and non-Medi-Cal MCOs. Revenues from the MCO tax, which leverages federal funding for Medi-Cal, provide a substantial General Fund offset in Medi-Cal.
https://lao.ca.gov/Publications/Report/3898

The 2020-21 Budget: Overview of the Governor's Budget

Jan 13, 2020 - Recently, corporation tax collections have grown faster than anticipated while personal income tax collections have grown somewhat slower. The administration assumes that this pattern will continue. This is because they attribute the pattern to partnerships, which are taxed under the personal income tax, changing to corporations in response to 2017 federal tax changes.
https://lao.ca.gov/Publications/Report/4135

The 2019-20 May Revision: Governor's May Revision Medi-Cal Budget

May 14, 2019 - In combination with a package of associated tax  changes, the existing MCO tax package generates  a net General Fund benefit of around $1.5  billion. Under state law, the MCO tax package expires at the end of 2018 ‑19.
https://lao.ca.gov/Publications/Report/4046

The 2020-21 Spending Plan: Health Budget and Policy

Oct 15, 2020 - The 2020-21 Spending Plan: Health Budget and Policy ‑$252 ‑$2,114 a Original proposal refers to the MCO tax as reauthorized and proposed to the federal government for consideration in 2019. b The MCO tax is only authorized for a half year in 2022 ‑23. c Approved tax refers to the MCO tax as modified by the administration and approved by the federal government in April 2020.
https://lao.ca.gov/Publications/Report/4281

The 2020-21 Spending Plan: Health Budget and Policy [Publication Details]

Oct 15, 2020 - These actions include the offsetting of what would otherwise be General Fund costs with (1) revenues from the federally approved reauthorized tax on managed care organizations and (2) federal Medicaid funds that are being provided to the state at an enhanced level during the term of the public health emergency.
https://lao.ca.gov/Publications/Detail/4281

The MCO Tax: A Flat Versus Tiered Structure

Jul 20, 2015 - Some MCOs with higher tax rates could cede some of their market share to other MCOs with lower tax rates. A flat tax woul d not have this effect. Regardless of which tax structure is in place, there are signs that the MCO industry is already moving toward greater consolidation.
https://lao.ca.gov/Publications/Report/3292

The Uncertain Affordable Care Act Landscape: What It Means for California

Feb 17, 2017 - To encourage the use of HSAs, some Republican replacement proposals offer tax credits to individuals for contributions into an HSA. (The tax credit could either be some portion of the alternative health care tax credit discussed above or a separate tax credit.)
https://lao.ca.gov/Publications/Report/3569

The 2021-22 Budget: Medi-Cal Fiscal Outlook

Nov 18, 2020 - Assume Statutorily Scheduled Expiration of Managed Care Organization (MCO) Tax For a number of years, the state has imposed a tax on MCOs ’ Medi ‑Cal and commercial lines of business. The state ’s previous MCO tax expired at the end of 2018 ‑19 and, in 2019 ‑20, the Legislature reauthorized the MCO tax in similar but not identical form to the prior tax.
https://lao.ca.gov/Publications/Report/4299

Issues That Could Impact Californians' Health Care Coverage in 2023 and Beyond

Dec 16, 2022 - As part of the federal Tax Cuts and Jobs Act of 2017, Congress effectively eliminated the federal individual mandate by setting the penalty for violating the coverage requirement to zero beginning in 2019.
https://lao.ca.gov/Publications/Report/4654