Maryland Attorney General pushes back on proposed rule that could threaten health coverage

BALTIMORE, Md. — Maryland Attorney General Anthony Brown announced Monday that he is co-leading a coalition of 24 attorneys general in filing a comment letter opposing a proposed federal rule that the coalition says goes further than federal law allows and could put federal funding for Medicaid at risk.

The rule, proposed by the Centers for Medicare and Medicaid Services (CMS), an agency within the Department of Health and Human Serivces, won't take effect until the public, and states have a chance to weigh in by filing comments.

In the letter the coalition released they argued that CMS is rewriting the rules in a way beyond what Congress authorized.

In particular, the rule could change how the federal government treats certain taxes, fees, and other payments collected by states.

The letter addresses four key concerns about the proposed rule change:

• The proposed rule would improperly interfere with state regulation of health insurers. For the first time, CMS would penalize states for collecting taxes and payments from health insurance companies by reducing the amounts the states would receive for Medicaid. This would violate the law, would threaten states’ Medicaid programs, and would improperly interfere with states’ regulation of health insurance. 

• Improperly applying new limits to collection of taxes and payments from health insurers. A law passed by Congress in 2025 imposes new limits on some taxes and payments collected by states. CMS’s proposed rule would apply those limits to taxes and payments on health insurers, but that is neither required nor allowed under the 2025 law. 

• Eliminating a 30-year-old safety valve. CMS has also proposed to change its criteria for determining when taxes and payments will reduce federal Medicaid contributions. But some of these criteria were written into federal law by Congress and can’t be changed by CMS. 

• Piling on costly new paperwork. States could have to reconstruct financial records going back to mid-2025 and build entirely new reporting systems from scratch. 

“States are already stretched thin funding health coverage for their residents,” the coalition wrote. “This rule adds new federal overreach and red tape on top of that, without adequate legal justification.”

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