managed care

For instance, California has netted an estimated $8.8 billion this fiscal year from its tax on managed care plans and took in about $5.9 billion last year from hospitals.

The proposals are also a threat to Proposition 35, a ballot initiative California voters approved last November to make permanent the tax on managed care organizations, or MCOs, and dedicate some of its proceeds to raise the pay of doctors and other providers who treat Medi-Cal patients.

All states except Alaska have at least one provider tax on managed care plans, hospitals, nursing homes, emergency ground transportation, or other types of health care businesses.

The cost has been driven up by a surge in enrollment, pharmacy costs and higher managed care costs, according to the budget proposal.

The governor’s budget includes a controversial proposal to grab $1.3 billion in funding in 2025-26 from Proposition 35, a measure voters approved in November that dedicated the revenue from a tax on managed care organizations to primarily pay for increases to Medi-Cal provider rates.