To save more than $5 billion, the governor wants to curb new enrollments and charge monthly premiums. Democratic lawmakers reject the idea
by Kristen Hwang and Ana B. Ibarra
A year after expanding Medi-Cal to all low-income immigrants without legal status, Governor Gavin Newsom proposed freezing new enrollments and charging monthly premiums, a measure that seeks to save the state more than $5 billion.
Newsom’s budget plan establishes that, starting in 2026, Medi-Cal—the public insurance for low-income and disabled people—will no longer accept new undocumented adults age 19 and older. Those already enrolled, approximately 1.6 million people, will retain their coverage. Children will remain eligible. In addition, all undocumented immigrants would retain access to emergency medical care and prenatal care, services funded by the federal government.
However, those who do not enroll by January 2026 would not have access to regular medical services such as consultations or prescription drugs.
The proposal requires approval by the state Legislature. So far, Democratic lawmakers—particularly those in the Latino Legislative Caucus—have shown strong opposition.
“I am completely against what is being proposed, as it would reform Medi-Cal in a way that excludes working Californians,” said Sen. Lena González, a Long Beach Democrat and co-chair of the Latino caucus. “We understand that budget adjustments need to be made, but this should not be the way to go.”
In addition to freezing enrollment, Newsom proposes that, starting in 2027, adults with “unsatisfactory immigration status” pay a monthly premium of $100. This would include people with certain legal status but who do not qualify for federal Medicaid. The governor’s office notes that this premium is lower than the average subsidized premium in Covered California.
The proposal has sparked outrage among health advocates. Amanda McAllister-Wallner, executive director of Health Access California, called it a betrayal of the governor’s commitment to universal healthcare. “These measures are reckless and reckless. It’s an abandonment of his legacy,” she said in a statement.
Newsom also proposed eliminating long-term care coverage and comprehensive dental services for immigrant adults starting in 2026, although emergency dental services would be maintained. Additionally, clinics serving this population would no longer receive advance payments from the state; instead, they would be reimbursed after services are provided.
With these measures, the state would save an additional $2.4 billion for the 2028-29 fiscal year, according to the governor’s office. In total, the package of cuts could achieve $7.8 billion in savings over the next few years.
Newsom argues that these difficult decisions are necessary in the face of a projected $16 billion drop in tax revenue and a $12 billion deficit. Part of the decline is attributed to tariffs imposed by the Trump administration, but Medi-Cal was already facing financial challenges due to rising costs and enrollment.
In March, the administration reported a $6.2 billion deficit in Medi-Cal, forcing it to allocate additional funds to pay providers through June. According to the state Department of Health Care Services, $2.7 billion more than expected was spent to cover immigrants without legal status. In total, the state allocates approximately $8.5 billion a year from the general fund for this population.
Republicans like Senator Roger Niello of Roseville see the cuts as a necessary correction. “We committed to spending on something we couldn’t afford,” he said. “This program started in a time of budgetary prosperity and expanded beyond what was reasonable.”
Newsom, however, defended his plan, saying it will not eliminate existing coverage. “We are not eliminating or cutting those already enrolled. We are just putting a limit on it,” he stated. “No state has done more than California, and no state will continue to do more than us.”
The proposal comes as Congress is considering cuts to the federal Medicaid program. One of the plans would penalize states that cover undocumented immigrants, reducing their federal funding for the program’s expansion. According to the Center on Budget and Policy Priorities, that could cost California $3.2 billion in the first year.
Despite the resistance, Newsom insists the state remains committed to immigrants. “We have to make difficult decisions, but we continue to lead the way in protecting our immigrant communities,” he concluded.
— CalMatters reporter Jeanne Kuang contributed to this report.
Correction: This story was updated on May 14 to correct an erroneous state deficit figure.
