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Trump can stop Gavin Newsom’s healthcare tax — and should

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California Democrats pushed a controversial new healthcare tax through the legislature without a single Republican vote. Gov. Gavin Newsom included it in the 2026-27 budget package — the last of his governorship.

They probably thought that settled the matter.

Before Newsom’s new healthcare tax can take effect, it must be approved by the Trump administration. President Donald Trump can stop it.

Why? Because the tax is designed to trigger more federal Medicaid dollars being spent on the state, it needs sign-off from the Centers for Medicare & Medicaid Services, now headed by Dr. Mehmet Oz.

That makes this far more than a Sacramento budget fight. It is a test of whether Washington will allow Newsom to shift more healthcare costs onto privately insured families to salvage a financing maneuver that keeps federal Medicaid dollars flowing to a financially strained Medi-Cal program.

The provision is contained in SB 125, a budget trailer bill Newsom signed. It imposes a flat $8.85-per-member, per-month tax on commercial health plans, Medi-Cal managed care plans and Obamacare marketplace plans.

Consider what that replaces. California had been taxing Medi-Cal plans roughly $274 per member per month — and private plans just $2.25. That 122-to-1 gap was no accident. It was the engine of the scheme.

This year, Washington banned it: States must now tax all health plans equally. So Newsom cut the tax on Medi-Cal plans, and raised it on the private insurance working families carry. His administration calls that simple compliance.

Opponents see something very different.

Republican Assemblyman Carl DeMaio of San Diego called the proposal “a wolf in sheep’s clothing,” warning that it could saddle California families with........

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