News Summary

California Governor Gavin Newsom has unveiled a plan to freeze enrollment for low-income immigrants without legal status in Medi-Cal, starting in 2026. This move, aimed at addressing a projected $12 billion budget deficit, is estimated to save the state $5.4 billion by the end of the 2028-2029 fiscal year. While current enrollees will retain their coverage, adults aged 19 and over with ‘unsatisfactory immigration status’ will face monthly premiums. The decision has drawn criticism from lawmakers concerned about its impact on immigrant communities.

California Governor Gavin Newsom has proposed a plan that would freeze enrollment for low-income immigrants without legal status in state-funded health care, known as Medi-Cal, starting in 2026. This decision comes as the state grapples with a projected $12 billion budget deficit.

The enrollment freeze is part of a broader effort to address the significant budget shortfall, which Newsom estimates will save the state $5.4 billion by the end of the 2028-2029 fiscal year. The Medi-Cal program, which provides health benefits to undocumented immigrants, has experienced costs that exceed initial estimates, with current expenditures reaching $9.5 billion annually. This figure is approximately $2 billion higher than the initial prediction of $6.4 billion.

Newsom’s budget proposal, which totals nearly $332 billion, was presented on May 14, 2025. Under the new plan, current enrollees will retain their Medi-Cal coverage, and the impending changes will not affect children who are also enrolled. However, starting in 2027, adults aged 19 and older on Medi-Cal classified with “unsatisfactory immigration status” will be required to pay a $100 monthly premium.

Background and Implications

The reasoning behind this budget revision includes rising health care costs, a significant increase in Medi-Cal enrollment, and economic uncertainty largely tied to federal tariff policies that have contributed to a reported $16 billion revenue loss for California under the previous administration. This financial strain has intensified the challenge for Newsom as he manages state health care policy amid ongoing speculation about a potential presidential run in 2028.

Although some lawmakers, including members of Newsom’s own party, are expected to review and possibly oppose the proposed enrollment freeze, citing its negative impact on immigrant communities, the governor’s office has maintained that no other state provides as much support for undocumented individuals as California. Criticism has emerged regarding Newsom’s tendency to blame the budget shortfall on external factors, like federal policies, rather than addressing state spending decisions.

Furthermore, if the federal government implements legislation to cut Medicaid funding for states that extend health coverage to undocumented immigrants, California could face even greater budgetary constraints. The situation highlights the delicate balance Newsom must maintain between fiscal responsibility and extending vital services to vulnerable populations.

Future Considerations

As the state moves towards a potential enrollment freeze in 2026, analysts are cautioning that failure to address budget management could jeopardize California’s long-term fiscal health and undermine support for its most vulnerable residents. Politically, the implications of this budget plan may shape the future landscape of health care policies in California as well as the broader national conversation around immigrant health benefits.

Governor Newsom’s proposed changes symbolize a complex intersection of fiscal constraints, political dynamics, and public health policy, all while reflecting the ongoing challenges faced by the state amid fluctuating economic conditions. The upcoming legislative session will be critical in determining how this proposal unfolds and its overall impact on California’s immigrant communities.