From Oppose to Neutral Position on MCO Tax Proposal

Tom Scott
CA Executive Director, National Federation of Independent Business

Rising health care costs is the #1 concern for our small business members according to a survey we released last November. Because of that, we take very seriously any potential increases in premiums as a result of this legislation. Given the aggressive legislative timeline for the Governor’s Managed Care Organization (MCO) tax, we took an oppose position. However, we sought out additional information and assurance that small business would not see increased costs as a result of these bills.

Due to outreach from legislative leaders, informational hearings, and additional input from industry representatives last week, we now have the assurances necessary to move to a neutral position.

While increasing the MCO tax, these proposals reduce other industry taxes by an equal or greater amount, leaving no valid rationale for health plans to raise rates due to this legislation. We understand that these tax changes are necessary to obtain critical federal matching funds for state healthcare costs.

Please click here to view our letter to members of the Legislature on SB 2X 15 and AB 2X 20.

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