California Governor Gavin Newsom announced a budget proposal on Wednesday that indicates the state may end free medical care for undocumented immigrants enrolled in its Medi-Cal program, primarily due to escalating costs.
He pointed out that California is grappling with a significant budget deficit for the second consecutive year, despite a substantial federal surplus earlier. The state now faces a $12 billion gap that needs addressing.
To tackle this issue, Newsom’s revised budget for 2025-26 aims to save $5 billion by prohibiting new undocumented immigrants from enrolling in Medi-Cal.
The governor’s plan includes freezing registrations for new recipients and halting fee insurance premiums, which is anticipated to save over $5 billion annually after previously granting Medi-Cal access to low-income immigrants without legal status.
Under this proposal, Medi-Cal will no longer accept new enrollees under the age of 19 starting in the 2026-27 fiscal year.
While the 1.6 million immigrants already enrolled will retain their coverage, children can still sign up. All undocumented residents will continue to have access to emergency medical care and pregnancy services. However, those who fail to enroll by January 2026 will be ineligible for other services like prescription medications and doctor visits.
About a third of California’s nearly 40 million residents benefit from programs available to individuals earning under 138% of the federal poverty level. The income threshold is around $21,600 for individuals and $44,400 for a family of four. Earlier this year, the state needed to appropriately allocate billions to cover increased medical costs, including rising registration numbers among the elderly and escalating drug prices.
Newsom’s proposal has stirred attention, marking a significant retreat from a policy he previously championed as central to his commitment to universal healthcare in California. His push for this initiative, which started in January 2024, bolstered his image as a progressive leader. Critics, particularly from conservative circles, argue that the program has been overly costly, while many Californians had seen it as a beacon of hope amid tough economic times.
In light of this, Newsom has framed his decision to cut coverage for undocumented immigrants as a means to strengthen Medi-Cal. His office stated that these changes are aimed at preserving coverage for millions and upholding the integrity of their healthcare system.
He has also laid blame on former President Trump for the economic challenges necessitating these cuts. According to Newsom’s Office, Trump’s tariffs have resulted in a loss of up to $16 billion in state revenues. Coupled with ongoing budget challenges, they have claimed that states must undertake tough but necessary financial adjustments.
Newsom’s past policy offering “free” healthcare to undocumented individuals has brought Medi-Cal to the brink of bankruptcy, forcing the program to borrow over $6 billion earlier this year just to remain afloat.
