Bill taxing insurers moves forward in California

SACRAMENTO, Calif. – California lawmakers pushed forward Wednesday 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, authored by Assembly Speaker Karen Bass, 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 percent tax on the gross premiums of health insurance companies that serve Healthy Families, was supported by the industry.

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

The Senate vote was 27-8.

The measure goes to the Assembly, where it faces a tougher test.