California lawmakers reveal new health plan tax proposal — 6 insights

On Monday, Feb. 8, 2016, the California Legislature unveiled a bill imposing a new tax on health insurance plans that would prevent a $1.1 billion hole in the state budget, according to a Mercury News report.

Here are six insights:

1. The tax is designed to allow California to continue receiving matching funds from the federal government to pay for health insurance for the poor.

2. The proposal would replace a tax that applied only to Medi-Cal managed care organizations, which the federal government said it would not renew.

3. Last year, Gov. Jerry Brown (D-Calif.) called a special session to deal with healthcare financing but failed to find a solution. His administration has worked for months to broker a compromise with insurance companies, which warned that higher costs could get passed on to consumers.

4. Insurers would get a reduction in other taxes to offset the cost of the new assessment.

5. The measure requires bipartisan support in the Assembly and Senate to achieve the supermajority required of tax increases.

6. The bill could begin moving through legislative committees as soon as this week.

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