BILL ANALYSIS Ó
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THIRD READING
Bill No: AB 83
Author: Assembly Budget Committee
Amended: 6/13/13 in Senate
Vote: 27 - Urgency
ASSEMBLY FLOOR : Not relevant
SUBJECT : Budget Trailer Bill: Health and Human Services
SOURCE : Author
DIGEST : This bill reauthorizes a Medi-Cal managed care
organization gross premium tax on health plans from July 1, 2012
through July 1, 2013 and establishes a sales tax on Medi-Cal
managed care plans beginning July 1, 2013 through July 1, 2016.
ANALYSIS :
Existing law:
1.Establishes, under federal law, the Medicaid Program (Medi-Cal
in California), administered by the Department of Health Care
Services, to provide comprehensive health care services and
long-term care to low income populations such as pregnant
women, children, and seniors, and people with disabilities.
2.Approximately five million Medi-Cal beneficiaries receive
health care services by enrolling in Medi-Cal managed care
plans.
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3.The gross premium tax (GPT) was authorized by AB 1422 (Bass,
Chapter 157, Statutes of 2009) for the period of January 1,
2010 through December 31, 2010 and extended through July 1,
2011 by SB 853 (Budget & Fiscal Review Committee, Chapter 717,
Statutes of 2010). Subsequently, ABX1 21 (Blumenfield, Chapter
11, Statutes of 2011) extended the sunset date to July 1,
2012. The Medi-Cal managed care GPT expired July 1, 2012.
This bill:
1.Reauthorizes a gross premium tax on Medi-Cal managed care
plans from July 1, 2012 until July 1, 2013. Specifies that
$125 million of the revenues from this tax be used to fund the
Healthy Families Program and the remaining revenues be
directed to the Department of Health Care Services for
purposes of funding managed care rates for health care
services for children, seniors, persons with disabilities, and
dual eligibles in the Medi-Cal program.
2.Provides a $125 million General Fund loan to the Managed Risk
Medical Insurance Board to cover the costs of the Healthy
Families Program.
3.Establishes a sales tax on Medi-Cal managed care plans
beginning July 1, 2013 through July 1, 2016. Specifies that
these funds be directed to the Department of Health Care
Services for purposes of funding managed care rates for health
care services for children, seniors, persons with
disabilities, and dual eligibles in the Medi-Cal program that
reflect the cost of services and acuity of the population
served.
4.Requires the Department of Health Care Services to provide
quarterly reconciliation of tax revenue utilization to
Medi-Cal managed care plans.
5.Prohibits a county, city, or district from imposing a sales or
use tax on the gross receipts of a Medi-Cal managed care plan.
6.Requires that the sales tax imposed by this bill shall only be
assessed if the Department of Health Care Services fulfills
its obligation to provide actuarially sound, monthly
capitation payments to the Medi-Cal managed care plan.
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7.Provides that this tax can be repealed through judicial
determination or final determination by the administrator of
the federal Centers for Medicare and Medicaid Services.
8.Appropriates $245 million federal funds to the Managed Risk
Medical Insurance Board for the purposes of funding the
Healthy Families Program.
9.Contains an urgency clause and goes into effect immediately.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: Yes
According to the Senate Budget and Fiscal Review Committee, in
2012-13, the tax rate would be equal to the gross premiums tax
(2.35%) and is projected to generate $166.4 million in revenue.
The $125 million of the current year revenues would be directed
to the Healthy Families Program and the remaining would be
directed to the Medi-Cal program for managed care rates for
children, seniors and persons with disabilities, and dual
eligibles that reflect the cost of services and acuity of the
population served.
In 2013-14 and beyond, the rate would be equal to the state
sales and use tax rate (3.9375%) and would generate about $340
million in revenues. These funds would offset General Fund
expenditures for Medi-Cal managed care rates for children,
seniors and persons with disabilities, and dual eligibles.
AB:nl 6/14/13 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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