California Republicans are pushing back against another tax increase, urging President Donald Trump’s administration to block a health care levy they say could add roughly $400 a year to residents’ costs.
Assembly Republicans are calling on Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz and Health and Human Services Secretary Robert F. Kennedy to reject a recently approved plan that critics argue would drive up premiums for Californians with private insurance.
The measure, known as the managed care organization tax, was signed by Gov. Gavin Newsom last week. It is designed to generate additional funding for the state’s Medicaid programs, though industry groups have warned it could increase annual premiums by $400 or more for a family of four.
“Newsom and Sacramento Democrats blew billions, can’t balance a budget, and now they want working families to pay the price with another $425 in higher healthcare costs,” Assemblymember Carl DeMaio said in a statement.
Under the proposal, health insurers would pay $8.85 per enrollee each month. If insurers pass the full amount on to customers, that would equal more than $100 a year for each person covered by a health plan, according to CalMatters.
The Legislative Analyst’s Office has projected that Californians could see monthly premiums rise by about 1.5%, in addition to the regular annual increases many policyholders already face.
“Californians are already struggling to afford coverage—the last thing they need is another backdoor tax hike from Sacramento,” DeMaio said.
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The health care tax is one of two tax increases included in Newsom’s upcoming state budget, and it has drawn criticism even from some Democratic lawmakers as Californians continue to grapple with high costs for gas, housing, utilities and other everyday expenses.
Sen. Akilah Weber Pierson, a Dem from San Diego, called the tax plan “extremely problematic” at a hearing last month, CapRadio reported.
“Raising health insurance premiums to help balance the state budget is simply robbing Peter to pay Paul,” added Dr. René Bravo, president of the California Medical Association.
The proposed tax hike requires the approval of the Centers for Medicare and Medicaid Services, the Republicans said.
“The Administration cannot prejudge an application until it’s thoroughly reviewed, but Gavin Newsom proudly pushing a plan that could jack up insurance premiums is on par for California Democrats,” said Kush Desai, a White House spokesperson.
A letter signed by DeMaio, Assembly Republican Leader Heath Flora and a coalition of other Republican legislators statewide claimed that approving the tax would “reward” California for failing to properly manage its federal health care resources.
“Rather than addressing the underlying causes of these escalating costs, California is seeking to shift the burden onto privately insured families while leveraging additional federal taxpayer dollars to sustain spending commitments that have proven financially unsustainable,” the letter claimed.
Newsom’s office did not immediately respond to a request for comment.
