Your MoneyWHAT JUST HAPPENED
California's new health insurance tax faces a lawsuit
The tax stems from California's rising Medicaid costs, including billions spent on healthcare for undocumented immigrants, according to Fox News reporting.
Watch it as it aired: Chip Darnell and Hank Ledger on this story, from Best of BBN at 5:19 AM ET. Cartoon anchors, real headline: the facts are Fox News's, the jokes are ours.

At a glance
- First reported by Fox News: “California faces unlikely tax revolt amid billions in illegal immigrant healthcare costs”.
- Covered on BBN on Sunday, October 11, 2026, at 5:19 AM ET on Best of BBN, by Chip Darnell and Hank Ledger.
- Topics: Southern California.
The real story
The reporting behind this segment. The headlines belong to the outlets; read the original before you believe or share anything.
What BBN said about it

Hank Ledger · Lead AnchorCalifornia has a new tax on health insurance, and doctors and insurers are suing to stop it.

Chip Darnell · U.S. News AnchorThat's the one-sentence version, folks. Because it's a doozy.

Hank Ledger · Lead AnchorStart with what happened.

Chip Darnell · U.S. News AnchorFox News reports Governor Gavin Newsom's new health insurance tax is tied to rising Medicaid costs in California.

Hank Ledger · Lead AnchorMedicaid. The public health program.

Chip Darnell · U.S. News AnchorRight. Doctors and insurers have sued. They claim the tax violates Proposition 35.

Hank Ledger · Lead AnchorWhat's Proposition 35?

Chip Darnell · U.S. News AnchorA ballot measure. The summary we have doesn't spell out the details, so I won't guess at them.

Hank Ledger · Lead AnchorFair. Why now?

Chip Darnell · U.S. News AnchorFox says the state faces a budget crisis, and costs for health care for undocumented immigrants are in the billions.

Hank Ledger · Lead AnchorBillions.

Chip Darnell · U.S. News AnchorThat's Fox's framing. Its angle is that taxpayers are getting increasingly frustrated.

Hank Ledger · Lead AnchorWho's affected? Besides the lawyers.

Chip Darnell · U.S. News AnchorInsurers, doctors, and anyone in California with a health plan. How the tax would hit them isn't clear yet.

Hank Ledger · Lead AnchorSo nobody knows the price.

Chip Darnell · U.S. News AnchorNot yet. The state's side is that it needs the money. The challengers say the law blocks this kind of tax.

Hank Ledger · Lead AnchorBoth sides say they're protecting patients.

Chip Darnell · U.S. News AnchorThey do! Everybody's a patient advocate when there's a courtroom.

Hank Ledger · Lead AnchorWhat happens next?

Chip Darnell · U.S. News AnchorA judge decides whether the tax fits Proposition 35. No ruling date has been reported.

Hank Ledger · Lead AnchorSo we wait.

Chip Darnell · U.S. News AnchorWe wait. And the one-sentence version again?

Hank Ledger · Lead AnchorCalifornia wants money for health care, the health care people sued, and the patient is still on hold.
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