Take That Illinois! California Pulls Ahead in the State Bailout Sweepstakes

In one of my visits on the Armstrong and Getty Radio Program in recent years, I pondered that California had better hurry up and get going in its quest to bankrupt itself.  Because I don't think the country will have the stomach to bail out two states - and Illinois is certainly giving California a run for its money as far as whose budgetary status and financial acumen are more debauched.

California has landed the latest blow in the battle of mismanagement.  Yep, a full third of the Golden State is, apparently, impoverished enough to need taxpayer funded healthcare. Is that a safety net or hammock?

From SFGate:

Medi-Cal provides free health care to low-income people, including families, seniors, people with disabilities and children in foster care. Nearly a third of the state — 12.5 million people — are enrolled in Medi-Cal, which saw a dramatic increase under the Affordable Care Act. 

But the state stands to lose $1 billion in federal funding after the Obama administration warned California that its tax system — currently California only taxes the plans that accept Medi-Cal patients — doesn’t comply with federal law. The federal government provides matching funds to California for Medi-Cal. 

To prevent the $1 billion loss of matching federal funds, California must tax all health plans — not just those that accept Medi-Cal enrollees. Insurers that don’t participate in Medi-Cal are fighting the broader tax. 

If all health care plans are forced to pay a new tax, it is likely the costs will be passed down to customers. 

Lawmakers are weighing whether to tax all health plans at the same flat rate. ...