California Proposes Enrollment Freeze for Low-Income Immigrants in Medi-Cal

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An abstract representation of California's health care system amid budgetary changes.

News Summary

California Governor Gavin Newsom has announced a proposal to freeze enrollment for low-income immigrants without legal status in Medi-Cal, anticipating savings due to a projected $12 billion budget deficit. This measure, effective in 2026, comes as costs for the program have exceeded initial estimates. While current enrollees will retain coverage, changes will require adults aged 19 and older to pay premiums starting in 2027. The proposal is raising concerns among lawmakers about its impact on immigrant communities.

California Governor Gavin Newsom has announced a proposal to freeze enrollment for low-income immigrants without legal status in the state-funded health care program, Medi-Cal, starting in 2026. This measure comes in response to a projected $12 billion budget deficit facing the state.

Governor Newsom’s proposed changes are expected to save California approximately $5.4 billion by the fiscal year 2028-2029. The recent expansion of Medi-Cal coverage to undocumented immigrants has led to costs surpassing initial estimates. The program, which previously estimated costs at $6.4 billion per year, has now reached approximately $9.5 billion annually, representing an increase of $2 billion over previous projections.

This adjustment to the state budget forms part of a nearly $332 billion budget plan presented by Newsom on May 14, 2025. Despite the proposed enrollment freeze, officials noted that current enrollees will retain their Medi-Cal coverage, and the changes will not impact children enrolled in the program. However, beginning in 2027, adults aged 19 and older on Medi-Cal with “unsatisfactory immigration status” will be required to pay a monthly premium of $100.

The proposal reflects a combination of rising health care costs, a significant increase in Medi-Cal enrollment, and broader economic uncertainties, particularly those linked to federal tariff policies. California has experienced a revenue drop of $16 billion due to such federal policies implemented during the Trump administration, which have substantially hindered state finances.

Governor Newsom has historically advocated for the expansion of health benefits to low-income immigrants, arguing that it leads to long-term cost savings. Nonetheless, the proposed freeze raises concerns among lawmakers and advocates. Some legislators, including members of his own Democratic party, are expected to review the plan and may oppose it over potential adverse impacts on immigrant communities.

Critics of the proposal point to the governor’s tendency to attribute the budget shortfall to external factors, including federal policies, rather than taking responsibility for state spending decisions. Moreover, should the federal government pursue changes to Medicaid funding for states allowing health coverage for undocumented immigrants, California may face additional budgetary pressures.

Governor Newsom’s proposal is part of broader discussions about the future of health care policy in California, particularly as he navigates a political landscape filled with speculation regarding a possible presidential run in 2028. His administration is grappling with the complexities of maintaining support for vulnerable populations while addressing significant fiscal challenges.

Financial analysts continue to warn that failure to effectively manage the state budget could threaten California’s long-term fiscal stability and the ongoing support for its most vulnerable residents. Discussions surrounding this issue are expected to intensify as the proposed budget revision is reviewed by lawmakers in the coming months.

As the state confronts a significant deficit, the implications of these fiscal decisions on California’s immigrant population, the health care system, and the overall economy remain to be seen, as both state and federal policies continue to evolve.