The California Medical Association (CMA) and a coalition of health advocates released a statement yesterday calling on Gov. Brown and the California Legislature to reinstate the Managed Care Organization (MCO), assessment tax that expired in 2012. The tax could raise $350 million per year to address the health care needs of children, particularly those being transitioned from the Healthy Families program to Medi-Cal.

While the governor’s 2013 budget, announced yesterday, proposes to reinstate the MCO tax, there is no indication of how the revenue will be spent.

When the MCO tax was created in 2009, it was seen as a solution to persistent funding shortfalls that plagued the Healthy Families program. While the tax was in effect, the Healthy Families program was stable and successful in providing care for the nearly 900,000 children it served.

The tax also brought additional revenue into the state through federal matching funds.

This month, the Department of Health Care Services began transitioning the state’s low income children from the Healthy Families program to Medi-Cal. The transition, proposed by Brown and passed by the Legislature this summer, is part of a larger plan to close the budget deficit. The Medi-Cal transition is expected to save about $64 million in 2013.

CMA has opposed this plan since it was first proposed and believes the move will likely have a negative impact on those who have relied on the Healthy Families program for their health care.

MCO revenues could be used to help insure a smooth transition from the Healthy Families program to Medi-Cal by providing enrollment assistance for families and by supporting targeted increases in Medi-Cal provider reimbursements designed to make sure there are enough quality providers offering the services children need.

Other organizations that signed the statement include the American Academy of Pediatrics, California Academy of Family Physicians, California Children's Hospital Association, California Coverage and Health Initiatives, California Primary Care Association, California School Health Centers Association, Children Now, Children's Defense Fund-California, Latino Coalition for a Healthy California, March of Dimes, National Physicians Alliance-California, PICO California, The Children's Partnership, and the United Ways of California.