(Bloomberg) -- California’s health-care plan for the poor, serving one in three people in the state and almost half its children, is facing a $1.1 billion funding gap amid a squabble over how to replace a tax the federal government said is unfair.
To finance Medi-Cal, California charges 25 managed-care plans a 3.9 percent tax on their total Medi-Cal revenue. The U.S. Department of Health and Human Services has said the levy fails to comply with federal guidelines because it doesn’t apply to all managed-care providers.
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