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California medical and insurance groups sue Newsom over healthcare tax

Medical and insurance groups are challenging California's tax on private health plans, according to Associated Press.

Updated Oct 5, 2026 · 22:33 UTC1 reports

The short version

The California Medical Association and the California Association of Health Plans petitioned the California Supreme Court, alleging a new tax on private health plans violates a 2024 ballot measure.[Associated Press]
Health insurers warn the tax will be passed directly to policyholders, raising annual premiums by roughly $100 per individual or $400 for a family of four.[Associated Press]
State officials defended the tax, arguing it is needed to fund healthcare programs and buffer potential federal cuts to Medi-Cal.[Associated Press]
The California Supreme Court must decide whether the legislature's tax package illegally circumvents limits established by voters.[Associated Press]

The California Medical Association and California Association of Health Plans filed a lawsuit with the California Supreme Court against Gov. Gavin Newsom and state lawmakers.[Associated Press]
The lawsuit alleges a managed care organization tax passed in June breaches a voter-approved 2024 initiative limiting healthcare taxes.[Associated Press]
Health insurers stated the tax will directly increase consumer premiums by approximately $100 per individual annually.[Associated Press]
Administration officials defended the tax as essential to fund healthcare and offset federal Medi-Cal reductions.[Associated Press]

Whether the California Supreme Court will agree with plaintiffs that the tax unlawfully bypasses the 2024 ballot measure.[Associated Press]
The final scale and timing of premium increases passed onto consumers.[Associated Press]

Outlet counts describe coverage, not independent confirmation. Reports may share a wire service or original source.