CA AB119

Establishes a new managed care organization (MCO) provider tax effective April 1, 2023, through December 31, 2026, on health plans providing Medi-Cal services, replacing the previous tax that expired January 1, 2023.

Creates the Managed Care Enrollment Fund to receive tax revenues for funding nonfederal shares of Medi-Cal capitation payments, managed care rates, and transfers to the Medi-Cal Provider Payment Reserve Fund.

Imposes tiered per-enrollee tax amounts based on Medi-Cal and non-Medi-Cal enrollment levels, with rates ranging from $0 to $192.50 per Medi-Cal enrollee and $0 to $2.25 per other enrollee across the tax periods.

Requires federal Centers for Medicare and Medicaid Services (CMS) approval before tax collection begins and allows the department to modify tax provisions to comply with federal requirements without triggering rulemaking procedures.

Sunsets the tax provisions on January 1, 2027, with complete repeal on January 1, 2028, though the Managed Care Enrollment Fund remains operational beyond the sunset date.