Thousands of low-income California children will be able to keep their health coverage under a bipartisan bill passed by state lawmakers and expected to be signed by California Gov. Arnold Schwarzenegger.
Calif. bill would use insurer tax to keep kids covered
In July, the governor signed a budget that included deep cuts to the state Children's Health Insurance Program, called Healthy Families in California. Because of the cuts, the state said it would have to drop up to 600,000 children from the program starting in October. About 922,400 children are covered under Healthy Families, and enrollment was frozen in July.
The bill would apply a 2.35% tax on insurers' gross premiums of Medicaid managed-care revenues to the Healthy Families program until January 2011. Companies that are taxed would be reimbursed after the tax dollars are applied to the program, allowing the state to draw down matching federal dollars. The California Association of Health Plans supported the bill. The bill also increases Healthy Families member premiums, starting in November, to help pay for the program. Schwarzenegger called the deal a “great victory for California's kids” in a statement and said that he looks forward to signing the bill.
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