Statement of California Health and Human Services Secretary Diana S. Dooley on the Managed Care Organization (MCO) tax:
Contact: Karin Caves
Office: (916) 654-3780
Cell: (916) 612-1620
September 11, 2015
Since the federal government ruled in July, 2014 that our current MCO tax could not continue beyond 2016, we have explored every conceivable option over the past 14 months to avoid losing $1.1 billion in federal matching funds. We have spent countless hours with the health plans, Legislators and those who will be most hurt if we must make up for a $1.1 billion loss. In the past few weeks alone, we agreed to eliminate other taxes paid by the health plans and made additional adjustments that would result in a very small cost to only a few plans. We did everything we could to make this work. It is deeply disappointing that the health plans could not come together to support this proposal and the Republican legislators have refused to consider any tax adjustments at all. Without additional revenue, there will be no alternative to reductions in our health care spending, jeopardizing the significant gains we have made through our implementation of the Affordable Care Act. We put a good plan on the table. With the Special Session still open, it is now up to the plans which refused to endorse this proposal, and the Republicans who refused to consider it, to stop drawing lines and start putting solutions on the table.