Sacramento, California - Assemblymember Eduardo Garcia (D-Coachella) released the following statement on AB 2x-1 and SB 2x-2 Managed Care Organization (MCO) Funding:

“Today’s bi-partisan MCO reform package enables us to take in nearly $8 billion federal dollars. These funds will be used for critical mental and health services in our district,” said Assemblymember Eduardo Garcia. “This effort brings needed aid to the economic, environmental, and public health crisis that we are facing throughout California.”

“This very important measure will support our developmentally disabled community in a positive way. Without the support of these services, Desert Arc and other organizations would not be in existence,” said Richard Balocco – President/CEO of Desert Arc

AB 2x-1and SB 2x-2 is being supported by Anthem, Blue Shield, California Association of Health Plans, Cal Chamber, California Dental Association, California Medical Association, California State Association of Counties, Health Net, L.A. Care Health Plans, Local Health Plans of CA, Molina Healthcare, Planned Parenthood, Sutter Health, Urban Counties and Western Center on Law and Poverty.

Bill Summaries:

S.B.X.2 No. 2 (Sen. Hernández/Asm. Bonta) Medi-Cal: developmental services: provider rate increases.

  • Replaces California’s current MCO tax which sunsets on July 1, 2016.
  • Allows California to maximize existing federal dollars, nearly $8 billion in federal support over three years.
  • Will not negatively impact premiums and relieves the plans of $371 million in corporation and insurance tax liability, annually for the three years. This tax savings must go towards reducing premiums, increased provider reimbursements or increased plan profits. 
  • Provides stable and ongoing funding for Medi-Cal.

A.B.X.2 No. 1 (Asm. Thurmond/Sen. Beall) Medi-Cal: developmental services: funding.

  • The MCO tax also raises enough revenue to free up General Fund dollars that will be used to provide a $300 million investment in the community-based developmental services system. With matching federal funds, this represents a $500 million investment.
  • As a result, the developmental services system that supports nearly 300,000 of the state’s most vulnerable citizens will finally be stabilized after years of cuts and rates freezes that had a debilitating impact.
  • Relieves rural and critical access skilled nursing facilities that are associated with general acute care hospitals from repayment of a prior budget cut.

The bill also provides new resources to improve access to the system for families that have historically been especially underserved, including families of color and those who speak languages other than English.