In 2024, California became one of the first U.S. states to make all immigrants without legal status eligible for Medi-Cal, its health care program for very low-income people.
Gov. Gavin Newsom is now proposing to freeze part of that expansion as California stares down an unexpected $16 billion loss of tax revenues. The culprit? President Donald Trump’s oft-changing tariffs, as well as higher-than-expected enrollment in Medi-Cal, according to Newsom’s office.
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To recover about $5 billion in savings, the Democrat is floating a combination of premiums and program freezes to the Medi-Cal extension to immigrants without permanent legal status. In the proposal, enrollees age 19 and older with “unsatisfactory immigration status” would pay a $100 monthly health care premium to access the program starting in 2027. The administration also plans to freeze enrollment by 2026 for new adults living in California illegally. Those immigrants would still be able to access some care such as emergency services.
About 1.6 million immigrants without legal status have enrolled in Medi-Cal so far, according to CalMatters.
In a statement, Newsom’s office described the plan as “difficult but necessary steps to ensure fiscal stability and preserve the
long-term viability of Medi-Cal for all Californians.” Medi-Cal is California’s version of Medicaid, the federal health care provider for low-income and disabled residents.
California Republicans quickly criticized Newsom for his budget decision-making.
Sen. Brian Jones, the Republican minority leader in the state senate, said the governor “is finally waking up to the budget disaster he created.” Assemblymember James Gallagher, the Republican leader there, called Newsom’s announcement the “biggest load of crap I have ever seen from a politician, and he shovels out a lot of it. We are in this budget predicament because of (Newsom’s) failed leadership.” Both posted their comments on the social media platform X.
The proposal is the opening salvo in Newsom’s revised 2025-2026 budget, which his administration will detail Wednesday morning. In January, officials projected that the state’s budget would be roughly balanced after several years of deficits and cuts — though Newsom still planned to tap $7 billion in reserves.
California has dramatically expanded its Medi-Cal services in recent years. Its budget problems come as Republicans in Congress unveiled $880 billion in proposed cuts Tuesday, mostly to Medicaid, to help pay for $4.5 trillion in tax breaks. Democrats say the plan would require states to cut health care coverage for millions of residents.
