California doctors and insurers sue state over healthcare tax that raises premiums

In California, doctors and health insurers have filed a lawsuit against Governor Gavin Newsom and the state Legislature over a healthcare tax that could raise insurance premiums. The lawsuit, filed with the California Supreme Court, argues that the tax violates Proposition 35, a 2024 voter initiative limiting healthcare taxes. The tax, known as the managed care organization tax, was recently increased for private health plans, potentially adding about $100 per person annually to premiums. The state says the tax is necessary to fund healthcare, but plaintiffs argue it disregards voter-approved limits.