OAKLAND — California Attorney General Rob Bonta joined a coalition of 24 attorneys general on September 22, 2026, to submit a comment letter opposing a proposed federal Medicaid rule. The Centers for Medicare and Medicaid Services projects no enrollment losses as a result of the proposed rule.

The coalition argues that the regulation would restrict state funding flexibility and increase the number of uninsured Americans. The Congressional Budget Office estimated that the proposed rule could leave 1.2 million more people uninsured by 2034.

The regulation would limit states’ ability to use provider taxes to cover Medicaid costs. The federal government provides at least 50% of the cost of Medicaid services.

"This proposed rule would restrict states’ use of provider taxes and force them to find other ways to pay their share of Medicaid costs," Bonta said. "It is unlawful and should be withdrawn or significantly changed."

States may have to reconstruct financial records going back to mid-2025 due to new paperwork requirements in the proposed rule. The coalition of attorneys general includes representatives from Arizona, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Maine, Massachusetts, Maryland, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Virginia, Washington, and Wisconsin.

"The One Big Beautiful Bill Act is already having serious consequences for Americans across the country and will continue to do so, and now the Trump Administration is trying to make matters worse," Bonta said.

Why It Matters

The dispute centers on how states finance their share of Medicaid obligations under federal law. Restricting provider taxes forces states to identify alternative revenue sources to maintain coverage levels while meeting federal matching requirements.

The disagreement over projected enrollment impacts reflects differing assessments of how financing changes affect participation. The Congressional Budget Office and the Centers for Medicare and Medicaid Services offer contrasting estimates regarding the number of individuals who may lose coverage.

Timeline

The One Big Beautiful Bill Act was signed into law on July 4, 2025, and has no official short title because it was removed during the Senate amendment process. California Attorney General Rob Bonta joined a coalition of 24 attorneys general to submit a comment letter opposing the proposed rule on September 22, 2026.

Bonta stated on September 22, 2026, that the One Big Beautiful Bill Act is already having serious consequences for Americans across the country and will continue to do so, and now the Trump Administration is trying to make matters worse. He also noted on that date that the proposed rule would restrict states’ use of provider taxes and force them to find other ways to pay their share of Medicaid costs. Bonta said on September 22, 2026, that the rule is unlawful and should be withdrawn or significantly changed.

What's New

Under the One Big Beautiful Bill Act, most adults in 43 states and the District of Columbia are required to work, go to school, enter a training program, or volunteer for at least 80 hours a month to qualify for Medicaid, with mandates taking effect in January. Native Americans and Alaska Natives are exempt from the Medicaid work mandates, but Native Hawaiians are not exempt due to a lack of federal recognition as a tribal nation.