Attorney General Bonta Stands Up for Affordability, Challenges Trump Administration’s Proposal to Cut Medicaid Payments to Healthcare Providers

OAKLAND - California Attorney General Rob Bonta today led a coalition of 14 attorneys general in submitting a comment letter opposing a proposed rule by the U.S. Department of Health and Human Services (HHS) and Centers for Medicare & Medicaid Services (CMS) that would severely limit an important tool used by state Medicaid programs to increase access to care. State-Directed Payments and supplemental payments under fee-for-service Medicaid (referred to in the letter as Healthcare Affordability Payments) help states support hospitals and other healthcare providers, including those serving rural, urban, and underserved communities, where Medicaid payments often fall short of the cost of providing care. The proposed rule, intended to implement the One Big Beautiful Bill Act, would sharply restrict these payments beyond what Congress authorized and fails to consider the devastating harms to patients and providers that will flow from further Medicaid cuts. In California, Medi-Cal serves as the state's Medicaid program.

"Medical emergencies don't stop when Medicaid payments stop - they just become more expensive and less accessible. As Americans face a crisis of affordability, we should be expanding access to affordable healthcare, not making the cuts Congress enacted even worse," said Attorney General Bonta. "This proposed rule will have real consequences for hardworking Americans and their families. My fellow attorneys general and I insist that it be withdrawn."

In the comment letter, Attorney General Bonta and the coalition argue that the proposed rule:

• Imposes cuts beyond those required by the One Big Beautiful Bill Act to arbitrarily cut Healthcare Affordability Payments for services Congress spared, like mental healthcare and rehabilitation care, as well as extending to reach fee-for-service supplemental payments.
• Undermines Medicaid expansion under the Affordable Care Act (ACA). Medicaid expansion, pioneered by the ACA, is a crucial tool to counter the cost-of-living crisis and language in the proposed rule's preamble appears intended to coerce states into abandoning Medicaid expansion. To date, 41 states have expanded Medicaid under the ACA.
• Arbitrarily penalizes large, dynamic urban regions. Specifically, CMS's narrow definition of "geographic region" could unfairly disadvantage large, interconnected urban areas and communities where residents routinely live, work, and receive healthcare across county or municipal boundaries.
• Increases uncompensated care costs for hospitals. Hospitals may have to raise prices on other consumers to compensate for these funding losses, and some may be forced to reduce services, merge, or shutter completely.

Medicaid is a federal program that helps states provide health insurance and long-term care for about 80 million Americans - about one in five people in the United States. In California, more than one-third of the population is enrolled in Medi-Cal, which provides funding for key services like primary care, mental healthcare, children's hospitals, nursing facility services, outpatient services, and more. The many harmful provisions under the One Big Beautiful Bill Act are already projected to explode the state's uninsured rate to above 14.7%, but further changes may raise that by expanding costs and related attacks on California's healthcare safety net.

Attorney General Bonta continues to stand firmly opposed to any federal attempt to limit access to Medicaid. Last month, he filed a lawsuit over the Trump Administration's implementation of Medicaid work requirements that put eligible people at risk of losing their health coverage. Previously, he filed a lawsuit against the Trump Administration for illegally sharing Californians' personal health data with ICE and creating a culture of fear that would lead to fewer people seeking vital emergency care. He also filed a lawsuit challenging the Trump Administration's final rule that would make it harder for Americans to obtain health coverage under the ACA.

In sending this letter, Attorney General Bonta leads the attorneys general of Arizona, Colorado, Delaware, Hawai'i, Illinois, Massachusetts, Michigan, New Mexico, New York, Oregon, Rhode Island, Vermont, and Washington.