California Governor Gavin Newsom has announced plans to halt the enrollment of low-income immigrants without legal status in a state-funded health care program, starting in 2026. This decision comes in response to a higher-than-expected cost of the program, which exceeded initial estimates by $2.7 billion. The governor attributes the decision to economic uncertainties stemming from federal tariff policies.
The Medi-Cal program, which provides free health care to poor adults regardless of immigration status, was initially celebrated as a step towards universal health care in California. However, Newsom’s recent proposal indicates a shift in approach as the state grapples with a $6.2 billion Medicaid shortfall. While new enrollments will be frozen, those currently enrolled will not be removed from the program, and the changes will not affect children.
Starting in 2027, adults with unsatisfactory immigration status already on Medi-Cal will be required to pay a $100 monthly premium. This new requirement aims to align costs with those of subsidized health plans available on California’s health marketplace and is expected to save the state approximately $5.4 billion by the 2028-2029 fiscal year.
The funding challenges faced by California include rising pharmacy costs and increased enrollment among older residents, which have forced the state to borrow and seek new funding sources. The budget situation is compounded by recovery efforts from natural disasters, ongoing tariff impacts, and projected multibillion-dollar budget deficits in the coming years.
As negotiations for the budget begin, it remains unclear how lawmakers will respond to Newsom’s proposed changes regarding Medi-Cal enrollment. The governor’s budget proposals also indicate plans to scale back on baseline spending and make tough fiscal decisions in light of the economic environment and expected deficits.
