Governor Gavin Newsom’s plan to freeze Medi-Cal enrollment for undocumented immigrants to address California’s $16 billion budget shortfall has sparked intense debate between fiscal conservatives and immigrant advocates.
At a Glance
- Newsom proposes to freeze new Medi-Cal enrollment for undocumented immigrants 19 and older starting in 2026, saving over $5 billion
- Current enrollees and children would maintain coverage, with emergency and pregnancy care still provided through federal funding
- A monthly $100 premium for adults with “unsatisfactory immigration status” is proposed for 2027
- California currently spends $8.5 billion annually on healthcare for undocumented immigrants
- Democratic lawmakers and immigrant advocates strongly oppose the changes, while Republicans support fiscal restraint
California’s Budget Reality Forces Tough Decisions
Governor Newsom’s budget proposal represents a significant shift in California’s approach to providing healthcare for undocumented immigrants. Facing a projected $16 billion decline in state tax revenues, partly attributed to tariffs from the Trump administration, the Governor is taking steps to rein in spending. The Medi-Cal program itself faces a $6.2 billion shortfall, with increased costs for covering the 1.6 million undocumented immigrants currently enrolled after California expanded eligibility to all adults without legal status in 2024.
Under the proposal, new enrollees 19 and older without permanent legal status would be barred from joining Medi-Cal starting in 2026, though current enrollees would retain coverage. Children would also continue receiving benefits regardless of immigration status. Emergency medical care and pregnancy services would still be available to all undocumented Californians through existing federal funding mechanisms that remain unaffected by the proposed changes.
— Lee Grove (@LeeGroveJr) May 5, 2025
Newsom Defends Decision While Facing Criticism
The Governor has attempted to frame the proposal as a moderate approach to fiscal responsibility, not a complete reversal of the state’s commitment to immigrant healthcare. “We’re not cutting or rolling back those enrolled in our Medi-Cal system. We’re just capping it. No state has done more than the state of California. No state will continue to do more than the state of California,” Newsom stated in defense of his plan. The proposal also suggests implementing a $100 monthly premium for adults with “unsatisfactory immigration status” beginning in 2027.
“We committed spending to something we can’t afford. It was begun in times when the budget was much more flush and then increased in times when the budget was unreasonably in surplus,” said Sen. Roger Niello.
Republican lawmakers have generally supported the move toward fiscal restraint, with some arguing the changes don’t go far enough. Meanwhile, Democratic legislators, particularly members of the Latino Caucus, have expressed strong opposition to any rollback of immigrant healthcare benefits. The proposal requires approval from the California Legislature, where Democratic lawmakers have generally opposed major cuts to Medi-Cal for immigrants.
Federal Pressure and Similar Trends in Other States
California’s situation is complicated by potential federal changes. Congress is considering reducing state Medicaid funds from 90% to 80% for states offering health insurance to unauthorized immigrants, which could cost California an additional $3.2 billion annually. This federal pressure is part of a growing national debate about the financial sustainability of expanding healthcare benefits to undocumented immigrants during economic downturns.
“These are folks who are working, paying taxes. They should have access to health care,” State Sen. Scott Wiener said.
Similar debates are playing out in Minnesota, where Democratic Governor Tim Walz faces a proposal to make adult immigrants without legal status ineligible for MinnesotaCare in 2026. Minnesota expanded public insurance coverage for unauthorized immigrants in 2023, enrolling over 20,000 people. The rollback proposal is part of a budget compromise with Republicans, but some Democratic lawmakers may oppose it, potentially stalling the broader health budget bill and risking a government shutdown if not resolved by July 1.
The Broader Implications
Critics, including Health Access California, view Newsom’s proposed cuts as a betrayal of his campaign promise for universal healthcare. Immigrant advocacy groups argue that the changes would create a two-tiered healthcare system and potentially lead to worse health outcomes for vulnerable communities. For taxpayers concerned about fiscal responsibility, the proposal represents an acknowledgment that unlimited benefits during budget shortfalls are unsustainable, even in a state that has led the nation in expanding healthcare access.
As California lawmakers negotiate the final budget, the outcome will likely set precedents for how Democratic-led states balance commitments to immigrant communities with fiscal constraints. The debate highlights the increasing pressure on state budgets as they attempt to maintain social safety nets while facing economic uncertainty and potential shifts in federal funding priorities.
