Brown Budget Plan & Loss of MCO Tax

When Gov. Jerry Brown (D) unveils his fiscal year 2016-2017 budget proposal on Thursday, one of the big unknowns may be answered —- what he plans to do about the pending loss of the MCO tax and the $1.1 billion hole it leaves in the budget.The managed care organization tax is due to expire June 30, 2016. The state imposed a 3.9% tax on revenue generated by health plans through Medi-Cal managed care and received federal matching funds for the MCO tax. The state then reimbursed the MCOs.