Andy Vidak, a Republican who represents the 14th state Senate District, the poorest in California, has branded himself an independent thinker who fights valiantly on behalf of his constituents.
But the Hanford lawmaker’s decision to oppose an important health-care tax bill that would restructure how the state taxes managed-care organizations so it complies with federal law suggests otherwise.
If California does not meet the federal mandate, it will lose $1.35 billion in federal health care funds. And there’s little doubt that if the bill does not receive the 27 votes it needs to pass the Senate, the negative impacts will reverberate throughout the 14th District, where poor residents already struggle to access health care.
Vidak’s opposition to the Managed Care Organization tax bill is particularly disappointing because it was put together by Gov. Jerry Brown and Legislative leaders with significant Republican input.
For example, in accompanying bills that are part of the package, Republican members asked for – and received – $173 million in transportation loan repayments and $240 million from Proposition 2 debt repayment funds to pay down the liability for state retiree health.
In addition, Republican and Democratic members received one of their big “asks” in another bill: major rate increases for community-based services for the developmentally disabled. With passage, this legislation will be worth almost $500 million to those who help the developmentally disabled.
More than $300 million would come from the state’s general fund, triggering another $189 million in federal funding.
The nearly $500 million would raise rates and wages for programs and caregivers serving those with autism, Down syndrome, cerebral palsy and similar conditions. The overdue raises would be the first in a decade.
That pot of money also would provide for the expansion of supported and independent living, respite, transportation and employment services. And it would reduce disparities in service delivery.
One critical element of the MCO tax reform bill is that it isn’t expected to increase health-care premiums. Here is what Assemblymember Kristin Olsen, the former Republican leader of the lower house, tweeted Feb. 22 about the MCO bill:
“Who benefits from MCO plan? Every Californian! Cutting debt, helping disabled, improving healthcare access, saving CA $1.3B = great package!”
Olsen then followed with a second tweet: “If 2+2=4 then MCO is a net tax cut (not increase). It’s called math.”
Here’s how that math works. The state would eliminate the corporate and gross premium taxes it imposes on health plans such as Blue Shield and Anthem, at a collective cost of $371 million. That would be offset by a separate tax on managed-care organizations.
Overall state tax collections would fall by about $100 million. But assuming Uncle Sam OKs the details, the state would remain eligible to receive the $1.35 billion in federal funds earmarked for Medi-Cal providers.
It is significant that California Chamber of Commerce, Anthem Blue Cross and Blue Shield of California, nursing home operators, physicians’ groups, and others support the deal. Kaiser is neutral, as is the anti-tax lobbying group the Howard Jarvis Taxpayers Association.
Even though the deal pencils and the state Chamber of Commerce has provided political cover for Republicans such as Vidak, the representative of a district where many people depend on Medi-Cal says he will oppose the MCO bill.
And in an example of politics played in the most cynical of ways, Vidak says he will vote for another piece of legislation in the package: the $307 million increase for developmentally disabled services.
We reached out to Vidak’s office today. He emailed back that “despite promises to the contrary, the MCO tax hike will likely result in health insurance rate hikes on low- and middle-income families and small businesses that are already struggling to pay for Obamacare.”
So, Vidak is voting to give up $1.35 billion in health-care funding because he doesn’t like Obamacare.
We urge him, in Olsen’s words, to do the math and reconsider.