The 2026-27 Budget: Medi-Cal Analysis [Publication Details]

Mar 2, 2026 - In this report, we analyze the Governor’s budget for Medi-Cal, with a focus on base spending trends, changes to provider taxes, implementation of new H.R. 1 rules, oversight over enacted budget solutions, and considerations for identifying additional savings in Medi-Cal.
https://lao.ca.gov/Publications/Detail/5146

The 2026-27 Budget: Medi-Cal Analysis

Mar 2, 2026 - The  smaller tax is due to an interaction with the new H.R. 1 rules and the commercial enrollment tax limits established in Proposition  35. Adjusts Health Plan Tax Spending Plan. The administration also adjusts its spending plan for a portion of health plan tax funds.
https://lao.ca.gov/Publications/Report/5146

Considering Medi-Cal in the Midst of a Changing Fiscal and Policy Landscape [Publication Details]

Oct 24, 2025 - We describe the changing fiscal and policy landscape for Medi-Cal resulting from Congressional enactment of H.R. 1 and the key issues facing the Legislature.  See our companion infographic
https://lao.ca.gov/Publications/Detail/5083

Considering Medi-Cal in the Midst of a Changing Fiscal and Policy Landscape

Oct 24, 2025 - Impact to Medi‑Cal Providers Health Plan Tax May Become Very Small … Under the new provider tax rules, the tax on health plans likely will be much smaller than under current law. This is because the state would have to significantly reduce tax rates to make the Medi ‑Cal and commercial tax rates proportional.
https://lao.ca.gov/Publications/Report/5083

The 2026-27 Budget: Medi-Cal Fiscal Outlook

Nov 19, 2025 - Why Does the Health Plan Tax Decline Under H.R. 1? Existing Health Plan Tax Disproportionately Taxes Medi ‑Cal Enrollment. The existing tax on health plans (also known as the Managed Care Organization Tax) charges rates on every monthly Medi ‑Cal and commercial enrollee.
https://lao.ca.gov/Publications/Report/5092

The 2026-27 Budget: Medi-Cal Fiscal Outlook [Publication Details]

Nov 19, 2025 - This brief summarizes our annual outlook for General Fund spending on Medi-Cal.
https://lao.ca.gov/Publications/Detail/5092

The 2025-26 Budget: MCO Tax and Proposition 35

Feb 26, 2025 - The 2025-26 Budget: MCO Tax and Proposition 35 3.6 MCO = managed care organization. Continues Funding 2024 Rate Increase … Though the MCO tax spending plan has changed over time, a few augmentations have remained throughout each plan.
https://lao.ca.gov/Publications/Report/4992

The 2025-26 Budget: Overview of the Governor's Budget

Jan 13, 2025 - Significant Changes to Solutions From June 2024 Budget Package Managed Care Organization (MCO) Tax Package. Some of the largest budget solutions in the June budget package involved the MCO tax, a tax on health plans that supports the Medi ‑Cal program.
https://lao.ca.gov/Publications/Report/4951

The 2025-26 Budget: Medi-Cal Fiscal Outlook

Nov 20, 2024 - MCO Tax Federal Approval of Recent MCO Tax Increases Is Pending. To go into effect, the MCO tax must receive federal approval, conditioned on meeting certain rules. The federal government approved the current version of the MCO tax in December 2023.
https://lao.ca.gov/Publications/Report/4941

The 2024-25 Budget: Medi-Cal Analysis

Feb 14, 2024 - As we noted in the “MCO Tax Budget Solution ” section of this report, there is an expected, though not certain, shortfall in the proposed MCO tax package, estimated by the administration to begin mid ‑2028.
https://lao.ca.gov/Publications/Report/4838