Medicaid Managed Care Tax Fight in Calif.

California lawmakers are staring down a $1.1 billion hole in next year’s health budget after failing to come up with a way to replace the state’s “managed care organization tax” on health insurance plans that serve Medi-Cal managed care recipients.

It’s a hole big enough that state Gov. Jerry Brown recently used it as a reason to veto 15 health care and other bills sent to him by the state legislature. And unless it’s filled, Brown, a Democrat, is expected to issue a preliminary state budget in January with sizeable cuts to health and human services programs.