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California health plans and doctors seek to block MCO tax
They argue the state rebuilt a voter-capped managed care tax without returning the changes to voters, and estimate it could add about $100 a year to premiums for privately insured Californians.
California's health insurers and the state's medical association have filed a petition with the California Supreme Court to stop the state from putting its restructured managed care organization, or MCO, tax into effect, according to Insurance Business.
The lawsuit, filed late Thursday and made public Friday, challenges how Sacramento rewrote Proposition 35, the 2024 ballot measure that capped the tax on commercial health plans. The petition argues the Legislature and Gov. Gavin Newsom's administration changed the measure without taking the revised version back to voters.
The petition names state agencies and officials, including the Department of Health Care Services and its director, Michelle Baass, the Department of Finance and its director, Joe Stephenshaw, and state Controller Malia Cohen.
The groups say the tax will flow into health insurance premiums on top of already elevated renewal increases. They also argue the rebuilt tax could raise costs by about $100 a year for each privately insured Californian.