The Santa Barbara Independent republishes stories from CalMatters.org on state and local issues impacting readers in Santa Barbara County.
A year after granting Medi-Cal access to low-income immigrants without legal status, Gov. Gavin Newsom is proposing to freeze enrollment of new recipients and charge premiums in a move expected to save the state more than $5 billion.
Under Newsom’s proposal announced today, Medi-Cal — the state’s health insurance program for low-income people and those with disabilities — beginning in 2026 would no longer accept new enrollees 19 and older who lack permanent legal status.
The 1.6 million immigrants already signed up would not lose their Medi-Cal coverage, and children could still enroll. All undocumented Californians would still be covered for emergency medical and pregnancy care — so-called “limited scope” coverage that is paid for with federal dollars. But those who don’t enroll before January 2026 would be uncovered for other medical expenses, such as prescription drugs and doctor’s visits.
Before the changes could go into effect, the California Legislature would have to approve them in the state budget. Democratic lawmakers have so far largely balked at making major cuts to Medi-Cal coverage for immigrants.
Senate Majority Leader Lena Gonzalez, a Long Beach Democrat and co-chair of the Latino Legislative caucus, said caucus members would not support Newsom’s proposal. State support for immigrants is a top priority of the caucus.
“Absolutely I’m opposed to what is being put forward right now, that would reform Medi-Cal in a way that cuts folks that are working Californians,” Gonzalez said. “This is really stark. I get it, we have to tighten our belts, but we should look for other ways.”
But Sen. Roger Niello, a Republican from Roseville and vice chair of the Senate budget committee, said Newsom’s proposed cuts confirm what Republicans have criticized about the expansion from the beginning: Medi-Cal for immigrants is too expensive to be sustainable.
“We committed spending to something we can’t afford,” Niello said. “It was begun in times when the budget was much more flush and then increased in times when the budget was unreasonably in surplus.”
Newsom also proposed that adults with “unsatisfactory immigration status” should pay a $100 monthly premium starting in 2027. Those are people whose immigration status makes them ineligible for federal Medicaid, including those with lawful status. The $100 premium is less than the average subsidized premium paid under Covered California, according to the governor’s office.
The decision is a bruising blow to Newsom, who ran for governor on the promise of universal health care. California was the second state after Oregon to offer full-scope health insurance to all immigrants without legal status.
“These cuts are reckless and unconscionable. This is a betrayal of the governor’s commitment to California immigrants, and an abandonment of his legacy, which brought California so close to universal health care,” Amanda McAllister-Wallner, executive director of Health Access California, said in a statement.
Newsom also suggested eliminating long-term care and full-scope dental coverage for immigrant adults 19 and older starting in 2026, though they will still have access to emergency dental services. Clinics that serve these patients would no longer receive early payments from the state and would be reimbursed after-the-fact, according to the proposed budget.
On top of the $5.4 billion saved from the enrollment freeze and premiums, these moves would save the state an additional $2.4 billion by 2028-29, Newsom’s office said.
Newsom has estimated that the deficit will reach $12 billion and that the state’s tax revenues will decline $16 billion this year, largely due to President Donald Trump’s tariffs.
Newsom’s office said the deficit required “tough decisions” but that the governor remained committed to protecting immigrants.
“We’re not cutting or rolling back those enrolled in our Medi-Cal system. We’re just capping it,” Newsom said today. “No state has done more than the state of California. No state will continue to do more than the state of California.”
Newsom’s office blamed wide-ranging tariffs imposed by the Trump administration for weakening the state’s expected revenues, but the Medi-Cal program was already experiencing cost problems related to growing enrollment and increasing costs of prescription drugs.
In March, the administration reported a $6.2 billion shortfall in its Medi-Cal budget, and had to appropriate additional funds to pay providers through the end of June.
The Department of Health Care Services, which oversees Medi-Cal, cited a number of reasons for exceeding its budget, including that it was spending about $2.7 billion more than anticipated on people without legal status.
The state spends about $8.5 billion a year from the general fund to cover immigrants who are in the country without legal authorization, according to the Newsom administration’s estimates.
Newsom’s call to limit enrollment comes as Congress is proposing major spending reductions to the federal Medicaid program. (Medi-Cal is California’s name for Medicaid.)
One proposal aims to penalize states that cover unauthorized immigrants. That penalty would come in the form of reduced federal funding for the Affordable Care Act expansion population — largely able-bodied adults without children. If enacted, that penalty could cost California about $3.2 billion in federal funding in the first year and increasing after, according to the Center on Budget and Policy Priorities.
CalMatters reporter Jeanne Kuang contributed to this story.
This story was corrected on May 14 to remove an inaccuracy about the size of the state’s deficit.
