New York could create a tax aimed at managed care organizations like Aetna and UnitedHealthcare that would force them to pay a hypothetical $1 billion into state coffers.
Because whatever the state spends on Medicaid is reimbursed by the federal government, the loophole creates the potential for a legal shell game where the Medicaid insurers come out even, the state makes money and the federal government loses it.
Variations of this trick have been around for years, with 18 states using some type of tax on managed care organizations to increase their share of federal reimbursements.
Now Democrats in New York are eyeing California's maneuver, seeing the move as an easy way to inject billions of dollars into the state's health care spending as it negotiates the overall state budget.
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