California’s Medical Coverage Cuts and New Rules

As deficits rise, Newsom and the state legislature have decided to freeze medical enrollments for undocumented immigrants over 19 starting in early 2026. Additionally, as of July 1, Medi-Cal will halt dental coverage for undocumented individuals and immigrants. This has sparked concerns, with some arguing that “it’s not enough.”

Adriana Ramos Yamamoto, a policy analyst at the California Center for Budget and Policy, pointed out that these cuts threaten years of efforts aimed at improving healthcare access for undocumented communities in the state. “All of this progress is under threat because of our own state’s budget deficit,” she noted, emphasizing the intensified pressure on Sacramento lawmakers as federal funding decreases. “Currently, we lack the funds to compensate for the federal shortfalls.”

“State leaders really need to take brave steps to increase revenue fairly to soften the blow of these federal funding cuts on our state and Medi-Cal,” she added.

New Medicaid Eligibility Rules Rollout

When the Affordable Care Act was signed in 2010 by then-President Barack Obama, it enabled adults aged 19-64 with incomes below 138% of federal poverty levels to qualify for Medicaid. Since then, over 21 million adults have enrolled nationally, with Medi-Cal accounting for 5 million of this number.

Under new guidelines, the state must update eligibility criteria for this “expansion group.”

• Individuals will need to renew their Medicaid eligibility every six months, instead of annually, through the local health and welfare agency.
• Healthy adults without dependents must participate in educational courses or community service for at least 80 hours monthly, with some exceptions if the state’s unemployment rate goes above 8%.

This will increase paperwork for both Medi-Cal recipients and county offices overseeing these policies. According to UC Irvine lobbyists, many recipients could risk losing coverage due to administrative oversights. “Someone might juggle two jobs, but if they fail to submit updates about their work situation, their coverage could be jeopardized,” one expert explained.

As states and counties take two years to fully implement these modifications, Caroptim Health’s Hunn mentioned that his team will coordinate with Orange County to ensure that residents know about the new forms they’ll need. “It’s important they recognize when to look out for specific communications and understand they have a set number of days to complete the renewal process,” he said.

Increased Fees for Undocumented Immigrants

Starting January 1, 2027, Medi-Cal recipients aged 19-59 will have to pay a monthly premium of $30 as stipulated in this year’s state budget. This applies to both undocumented and temporary immigrants, while pregnant individuals are exempted.

If someone misses three consecutive payments, they risk losing their coverage, and due to the 2026 registration freeze, re-enrollment will not be available.

Starting Out-of-Pocket Payments

On October 1, 2028, new out-of-pocket payment requirements will come into effect for Medicaid recipients in the growth population, mandating fees of $1 to $35 per service, with exceptions for primary care and mental health or substance use services. Additionally, the total annual out-of-pocket cost cannot surpass 5% of an individual’s income, which could complicate financial planning for some.

“The state needs to monitor how much individuals are spending on these costs to prevent them from exceeding that 5% threshold,” a commentator stated.