California voters are set to decide in November whether the state should permanently tax them on managed care organizations — and whether revenue from that tax should go toward investments in health insurance for low-income people.
The MCO tax, a state tax on health insurance plans, is set to expire in 2026. If voters vote “yes” on Proposition 35, the tax would become permanent and proceeds from it will offset a portion of Medi-Cal enrollment taxes and administrative costs.
The initiative, led by the Coalition to Protect Access to Care, has a wide range of support under its belt, including from both the state Democratic and Republican parties as well as from the California Hospital Association and California Medical Association.
Over $9 million was given this year to the Coalition to Protect Access to Care in support of the measure, including from the California Medical Association, local Planned Parenthood groups and the California Dental Association, according to financial records filed with Cal-Access.
While Gov. Gavin Newsom hasn’t outright expressed opposition to the ballot measure, he had proposed using the tax revenue to help offset California’s multibillion-dollar budget deficit.
“This initiative hamstrings our ability to have the kind of flexibility that’s required at the moment we’re living in,” Newsom told reporters. “I haven’t come out publicly against it. But I’m implying a point of view. Perhaps you can read between those many, many lines.”
