California creates $1.1B deficit with failed healthcare tax

After failing to devise a way to replace the state's managed care organization tax, California lawmakers are facing a $1.1 billion hole in next year's health budget, Kaiser Health News reports. Health insurance plans that serve Medi-Cal managed care recipients were the main beneficiaries of the tax, and Gov. Jerry Brown recently vetoed more than a dozen healthcare-related bills that the state legislature sent his way.

A deal on the managed care organization tax is not expected until the middle of 2016, designated as the time when the tax must end. The cut of this money from the budget could make it difficult to raise already-low reimbursement rates for physicians, and talks between insurers, legislators and state health officials on how to replace the funds will continue, according to KHN. Article

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