Bipartisanship OKs Calif. Health Care Reform

SACRAMENTO (CN) - Gov. Jerry Brown's multibillion-dollar overhaul of managed health care organizations got a boost from California Republicans on Monday and cleared the Assembly.

Lawmakers agreed the three tax reforms are needed to ensure federal funding for Medi-Cal programs and promised the package would not pass on costs to taxpayers.

The package required a two-thirds vote in the Legislature and a combined 13 Republican lawmakers voted in favor of the measures. Brown's proposal cleared both houses with unanimous support from Democrats.

Brown said he will sign the bills as soon as they reach his office.

"Democrats and Republicans came together today to do what's best for California," Brown said after the vote. "This legislation will save money and help millions of people with health care and disability services."

Brown introduced the tax reforms in his January budget proposal, saying they were necessary to comply with Affordable Care Act rules and ensure that California will get more than $1 billion in federal matching dollars. The governor's office said the health care tax actually reduces the net taxes paid by the private health care industry.

Along with bipartisan support from state lawmakers, the reforms were endorsed by the California Chamber of Commerce and a host of health care providers, including Blue Shield and Anthem. The California Hospital Association said the program will provide critical funding for nursing facilities and disabled services.

The Legislature showed courage in approving the tax package, which will help Californians struggling with rising health care costs, said Brianna Lierman, Local Health Plans of California CEO.

"If the MCO tax package had failed, the Medi-Cal program would have stood to lose an estimated $1.1 billion in critical funding," Lierman said in a statement. "That loss would have been a huge hit on California's low-income families, because it could have been absorbed without nor replaced with a source of funding that is nearly as predictable and stable as the MCO tax."

Democratic lawmakers swayed crucial Republican votes by agreeing to set aside nearly $300 million for services for the developmentally disabled and skilled nursing facilities. Democrats also agreed to pay down nearly $400 million in state debt on transportation loans and state employee pension liabilities.

Assembly Republican leader Chad Mayes called the proposal a "win-win" for Californians and stressed the importance of securing federal Medi-Cal funding.

"Assembly Republicans fought to protect Californians, secured funding that will improve services for the developmentally disabled community, and paid down more than $400 million in state debt. This bipartisan agreement is an example of how government should work for the best interests of the people," Mayes said.

After Brown signs it into law, the tax restructuring scheme must be approved by the federal government.

With the health care tax issue hurdled, Brown's focus is expected to turn toward funding highway improvements. Brown proposed spending $807 million on state building repairs in his January budget proposal and last year tasked lawmakers with finding ways to address the state's massive and crumbling highway infrastructure.

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