California Republicans have had enough tax hikes — appealing directly to President Donald Trump’s admin to kill a widely-hated health care tax increase that’s expected to cost residents an additional $400 per year.
Assembly Republicans are demanding Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz and Health and Human Services Secretary Robert F. Kennedy to nix a recently signed plan that would raise premiums on Californians with private insurance.
The so-called managed care organization tax, signed by Gov. Gavin Newsom last week, is intended to raise funding for state Medicaid programs but could raise annual premiums by $400 or more for a family of four, industry groups have warned.
“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.
The tax proposal would require health insurers to pay a monthly rate of $8.85 per enrollee — which amounts to more than $100 per year annually for every individual on the health plan, if companies pass all the costs onto consumers, per CalMatters.
The Legislative Analyst’s Office estimated that Californians could face a 1.5% increase in monthly premiums — on top of typical annual rate increases.
“Californians are already struggling to afford coverage—the last thing they need is another backdoor tax hike from Sacramento,” DeMaio said.
The tax hike — one of two approved in Newsom’s upcoming state budget — infuriated even some Dems in the legislature, as California residents struggle with high prices on gas, housing, utilities and other living 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.
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