A patient at La Clinica in Oakland picks up her prescription on Sept. 26, 2019. Photo by Anne Wernikoff for CalMatters
Doctors and health insurers filed a lawsuit last week alleging Gov. Gavin Newsom and the Legislature violated the law when they approved a healthcare tax that could substantially increase insurance premiums for Californians.
The lawsuit claims the recently passed tax on health plans, known as the managed care organization tax or MCO tax, circumvents a 2024 initiative that limits healthcare taxes and directs revenue toward specific purposes. The California Medical Association and California Association of Health Plans filed the complaint with the California Supreme Court.
“California voters passed Proposition 35 and made it law. The state does not get to ignore that law simply because following the law is inconvenient,” medical association CEO Dustin Corcoran said in a statement.
Tara Gallegos, a spokesperson for Newsom, said the tax allows the state to make changes to fund healthcare. “The state disagrees with their claims, and we believe the courts will too,” Gallegos said in an email.
H.D. Palmer, a spokesperson for the Department of Finance, said in a previous statement to CalMatters that the state wanted to balance the…
