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California lawmakers unveil bill to tax MCOs and plug $1.1 billion hole in budget

California lawmakers on Monday unveiled two identical bills to replace the soon-to-expire tax on managed care organizations (MCO). The bills, ABx2 20 (Bonta) and SBx2 15 (Hernandez), are the product of 14 months of negations with MCOs. These bills are supported by the California Association of Health Plans, with most member plans either supportive or neutral. The current MCO tax will expire this summer if legislators cannot agree on a replacement. Since 2005, the state has taxed MCOs and used the money to cover the costs of the Medi-Cal program. ...