California Senate approves tax on health insurers

The measure would help prevent the removal of nearly 700,000 children from a government health insurance program for the working poor. The bill now moves to the Assembly.
By Eric Bailey

September 2, 2009 | 5:15 p.m.

Reporting from Sacramento - State lawmakers pushed forward today with an agreement to keep nearly 700,000 children from being yanked off a government health insurance program for the working poor.

The state Senate passed a measure that would create a tax on health insurance companies and bring in federal money to rescue the program, which had been deeply cut in recent months as lawmakers scrambled to balance the state budget.

The proposal, offered by Assembly Speaker Karen Bass (D- Los Angeles), won unanimous approval from Democrats. It also had support from three Republican lawmakers who broke ranks with GOP colleagues troubled that the plan involved a new tax on business.

But the levy, a 2.25% tax on the gross premiums of health insurance companies that serve Healthy Families, was supported by the industry.

Republican lawmakers came under intense pressure in recent days as the health insurers lobbied them to support the measure while anti-tax stalwarts -- including the Howard Jarvis Taxpayers Assn. -- urged rejection.

The Senate vote was 27 to 8.

The measure now goes to the Assembly, where it faces a tougher test. Bass must coax support from as many as half a dozen Republican lawmakers to achieve the two-thirds vote needed for approval of tax measures.

"This is one of those rare opportunities to do the right thing on a bipartisan basis, because the alternative is just unacceptable -- hundreds of thousands of kids going without healthcare at a time of increasing risks," said Wendy Lazarus, founder of the Children's Partnership, a nonprofit health advocacy organization.

eric.bailey@latimes.com
Copyright © 2009, The Los Angeles Times

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