a bill<\/a> substantially raising the tax on private plans.\u00a0<\/p>\nHealth insurers said they will pass the cost directly on to consumers, spiking premiums by about $100 per person each year. That means a family of four could pay a $400 annual increase. That would come on top of the rate increases people typically see year to year.<\/p>\n
\u201cCalifornia is breaking the law by blowing through a tax limit voters put in place to protect Californians and businesses from higher health care costs,\u201d said Charles Bacchi, CEO of the health plans association.<\/p>\n
Doctors, hospitals, clinics and Medi-Cal insurers have argued for many years that the revenue from the tax should go toward improving Medi-Cal. They said that the state was inappropriately using the money to replace general fund spending, and that many providers were being paid far less than their services cost. In 2024, they asked voters to approve a limited tax that would be reserved for Medi-Cal improvements.<\/p>\n
But Congress last year changed the rules on taxes used to generate revenue for healthcare, including the ones imposed on health plans. Rather than lose the money generated by the tax, Newsom proposed and the Legislature agreed to submit two taxes to the federal government for approval: one that complied with the 2024 initiative but would be rejected by the feds, and one that complied with federal regulations and largely disregarded the initiative.\u00a0<\/p>\n
This story was updated three hours after publication with a response from the governor\u2019s office. <\/p>\n
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Supported by the California Health Care Foundation (CHCF), which works to ensure that people have access to the care they need, when they need it, at a price they can afford. Visit www.chcf.org to learn more.<\/p>\n
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