Confronting a $1.1 billion shortfall in its Medicaid budget, California will soon impose a new tax on health insurance carriers.

According to the law signed by Gov. Jerry Brown on Tuesday, all insurers in the state will pay a tax to finance Medicaid. Previously, only insurers that participated in the state's Medicaid program, Medi-Cal, were subject to such a tax.

The decision comes as the result of pressure from the Obama administration, which insisted that the state generate more of its own revenue to finance its Medicaid program. The administration signaled that it would not continue matching the state dollar-for-dollar unless the state implemented a broader tax aimed at getting more from insurers.

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