Cal­i­for­nia’s health care tax re­jected

Antelope Valley Press - - NEWS -

SACRA­MENTO (AP) — The Trump ad­min­is­tra­tion says it will not al­low Cal­i­for­nia to col­lect a key health care tax on man­aged care or­ga­ni­za­tions, a de­ci­sion that could cost the state $1.2 bil­lion for low-in­come ben­e­fits.

The news does not im­me­di­ately af­fect Cal­i­for­nia’s bud­get be­cause the state did not plan to re­ceive any of that money this year or next year. But it could cost Cal­i­for­nia $1.2 bil­lion in the fis­cal year that be­gins July 1, 2021, Cal­i­for­nia Depart­ment of Finance spokesman H.D. Palmer said.

“The Ad­min­is­tra­tion will con­tinue its on­go­ing dis­cus­sions with fed­eral Med­i­caid of­fi­cials on this is­sue,” Palmer said. “Con­sis­tent with the fed­eral gov­ern­ment’s prior ap­provals of sim­i­lar fi­nanc­ing waivers, we be­lieve and ex­pect that we can reach an agree­ment that al­lows this type of fi­nanc­ing to con­tinue.”

The Cen­ters for Medi­care and Med­i­caid Ser­vices says it won’t al­low the tax be­cause it only ap­plies to man­aged care or­ga­ni­za­tions that re­ceive Med­i­caid pay­ments. Or­ga­ni­za­tions that don’t re­ceive Med­i­caid pay­ments would not be taxed. That is against fed­eral rules, ac­cord­ing to a let­ter from Calder Lynch, act­ing deputy ad­min­is­tra­tor and di­rec­tor of the fed­eral Cen­ter for Medi­care and Med­i­caid Ser­vices.

The tax ap­plies to man­aged care or­ga­ni­za­tions that man­age Cal­i­for­nia’s Med­i­caid plans, the joint state and fed­eral pro­gram that pro­vides health ben­e­fits for the poor and people with dis­abil­i­ties.

Cal­i­for­nia uses the money it gets from the taxes to pay its share of Med­i­caid costs, which then trig­gers pay­ments from the fed­eral gov­ern­ment. It was ex­pected to save the state about $1.2 bil­lion in the 2021-22 bud­get year.

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