Jerry Brown

Gov. Jerry Brown speaks at the Capitol on Jan. 7. (Rich Pedroncelli / Associated Press)

By Melanie Mason
February 29, 2016

Culminating a prolonged, wonky debate that has consumed the Capitol for months, legislators on Monday approved a new tax on healthcare plans that would help finance the state’s public healthcare program for the poor.

The package of bills — which await Gov. Jerry Brown’s signature — would overhaul a tax on managed care organizations (MCOs), in an effort to secure more than $1 billion in federal money to help pay for Medi-Cal, which serves a third of the state’s population.

“I can’t emphasize enough the importance of the MCO financing proposal here before us today,” Assemblyman Rob Bonta (D-Alameda) said on the floor.

“We cannot risk losing this much-needed federal funding,” Bonta added. “We need to continue funding the expansion of healthcare coverage and protect programs from cuts during future budget deficits. Today’s proposal will allow us to do both.”

The new tax required bipartisan votes to clear the two-thirds vote threshold. Some normally tax-averse Republicans said they were supportive of the plan in part because it eliminated certain levies for health insurers, reducing the companies’ overall tax burdens. GOP lawmakers also were swayed by companion spending measures that increased money for services for the developmentally disabled and paid down state debts.

“Collectively, we came up with something that’s really good,” said Assemblyman Brian Maienschein, a San Diego Republican.

But not all Republicans were won over.

“What about the consumers,” asked state Sen. Jeff Stone (R-Murrieta), questioning the assertion that there would be no costs passed along by the healthcare plans. “When we raise taxes, someone’s got to pay the bill.”

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