Brown expands health industry tax

SACRAMENTO — Gov. Jerry Brown signed legislation Tuesday to expand a tax on the health insurance industry so that the state doesn’t lose $1 billion in federal funding.

The Obama administration told state officials in 2014 that the state’s tax on managed-care organizations violated federal law because it singled out plans that accept Medi-Cal patients.

A bipartisan vote was needed in the state Legislature to expand the tax, sending Democratic lawmakers to the bargaining table to get Republican support.

The legislation also sets aside $123 million to restore rate freezes for skilled-nursing centers that are part of acute-care hospitals, $173 million to repay transportation loans and $240 million to pay down the state’s retiree health care liability.