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.”