California Governor Gavin Newsom faces mounting pressure over the state's financial stability as he implements significant changes to healthcare programs for undocumented immigrants.
According to Daily Mail, California's $12 billion deficit has forced Newsom to announce restrictions on Medi-Cal, the state's Medicaid program, which will stop accepting new applications from low-income adults without legal status starting in 2026.
The state's ambitious healthcare expansion has exceeded budget expectations by $2.7 billion, with more than 1.6 million undocumented residents enrolled in the program this fiscal year. Newsom's administration emphasizes that current beneficiaries will maintain their coverage, and children's benefits will remain unchanged.
Newsom's office attributes the financial challenges to what they call a "$16 billion Trump Slump" and higher-than-anticipated healthcare utilization. Izzy Gardon, Newsom's spokesman, addressed the controversial decision, emphasizing the need for fiscal responsibility.
The governor's office shared their perspective on the policy changes:
To be very clear, these proposals are the results of a $16 billion Trump Slump and higher-than-expected health care utilization. Because of these outside factors, the state must take difficult but necessary steps to ensure fiscal stability and preserve the long-term viability of Medi-Cal for all Californians.
The new policy also introduces a $100 monthly premium requirement for adults with "unsatisfactory immigration status" enrolled in Medi-Cal, scheduled to begin in 2027. This amount aligns with the average costs paid by individuals on subsidized health plans through California's marketplace.
California currently provides free healthcare to more than one-third of its 39 million residents. The Medi-Cal expansion, combined with rising pharmacy costs and increased enrollment by older individuals, has forced the state to seek additional funding sources.
Newsom's administration projects these changes will generate savings of $5.4 billion by fiscal year 2028-2029. The governor previously defended the expansion program, arguing it would save money in the long term.
The state-funded program operates independently of federal dollars, highlighting California's commitment to providing healthcare coverage regardless of immigration status. However, the mounting costs have necessitated a reevaluation of the program's sustainability.
Newsom, 57, maintains a complex relationship with President Trump while managing state affairs. Despite their political differences, Trump has expressed interest in seeing Newsom run for president, though often using derogatory variations of his name.
The governor recently demonstrated a willingness to work with Trump on certain issues, including a proposed $7.5 billion film production tax credit. This cooperation comes amid Trump's consideration of imposing substantial tariffs on foreign film productions.
Recent developments have also highlighted tensions over other state projects, particularly the high-speed rail initiative connecting San Francisco to Los Angeles, which Trump criticized for cost overruns estimated at $100 billion.
Governor Gavin Newsom's decision to freeze new enrollments in California's Medi-Cal program for undocumented immigrants represents a significant shift in the state's healthcare policy. The changes, set to begin in 2026, aim to address the $12 billion deficit while maintaining coverage for current beneficiaries and children. These adjustments, including the introduction of monthly premiums for certain participants in 2027, are projected to save the state $5.4 billion by fiscal year 2028-2029, marking a crucial turning point in California's approach to universal healthcare coverage.
