CA SB119

Repeals the inoperative managed care organization (MCO) provider tax (Article 6.8) and establishes a new MCO provider tax (Article 7.1) on health plans contracted to provide Medi-Cal services for tax periods April 1, 2023 through December 31, 2023, and calendar years 2024, 2025, and 2026.

Imposes tiered per-enrollee taxes on Medi-Cal and non-Medi-Cal enrollees, with Medi-Cal taxing tier II (1,250,001 to 4,000,000 enrollees) taxed at $182.50 per enrollee for 2023-2024, increasing to $187.50 in 2025 and $192.50 in 2026.

Creates the Managed Care Enrollment Fund to replace the Health Care Services Special Fund, receiving all tax revenues to fund nonfederal shares of Medi-Cal capitation payments, managed care rates, and transfers to the Medi-Cal Provider Payment Reserve Fund.

Requires federal Centers for Medicare and Medicaid Services approval before tax collection begins and allows the director to modify tax provisions to meet federal requirements without jeopardizing federal financial participation.

Declares the bill an urgency statute taking effect immediately upon enactment and requires a two-thirds vote for passage due to resulting in higher taxes under California Constitution Article XIII A Section 3.