California Gov. Gavin Newsom proposes pausing immigrant well being care protection growth

California Gov. Gavin Newsom has proposed a pause to the enrollment of extra low-income immigrants with out authorized standing for state-funded well being care advantages in 2026 because the state faces financial uncertainty. 

Newsom outlined his almost $332 billion state spending plan on Wednesday, revealing that California is going through a $12 billion finances deficit. 

“California is underneath assault,” Newsom stated. “We’ve a president that is been reckless when it comes to assaulting these progress engines.”

The Democratic governor famous that the freeze doesn’t imply California is backing away from its assist for immigrants.

“No state has finished greater than the state of California, no state will proceed to do greater than the state of California by a protracted shot. And that is some extent of satisfaction,” Newsom stated.

The choice, the small print for which have been revealed earlier than Wednesday’s finances revision presentation, is pushed by a higher-than-expected price ticket on this system and financial uncertainty from federal tariff insurance policies, Newsom stated. It additionally comes as Newsom faces his remaining years within the governor’s workplace, with hypothesis persevering with to mount about his future political prospects. 

California’s push to supply free well being care advantages to all low-income adults, no matter their immigration standing, was introduced in late 2023. Newsom touted the deliberate growth as “a transformative step in the direction of strengthening the well being care system for all Californians.”

Nonetheless, the price has exceeded the state’s preliminary $6.4 billion estimate by greater than $2 billion.

Nonetheless, as late as March of this yr, Newsom steered to reporters he was not contemplating rolling again well being advantages for low-income individuals dwelling within the nation illegally — even with California grappling with a $6.2 billion Medicaid shortfall. He additionally repeatedly defended the growth, saying it saves the state cash in the long term. This system is state-funded and doesn’t use federal {dollars}.

Below Newsom’s plan, low-income adults with out authorized standing will not be eligible to use for Medi-Cal, the state’s Medicaid program, beginning in 2026. Those that are already enrolled will not be kicked off their plans due to the enrollment freeze, and the modifications will not impression kids. Newsom’s workplace did not say how lengthy the freeze would final.

Beginning in 2027, adults with “unsatisfactory immigration standing” on Medi-Cal, together with these with out authorized standing and those that have authorized standing however aren’t eligible for federally funded Medicaid, can even must pay a $100 month-to-month premium. The governor’s workplace stated that’s in keeping with the common value paid by those that are on backed heath plans via California’s personal market. There is no premium for most individuals at present on Medi-Cal.

“We consider that folks ought to have some pores and skin within the recreation because it pertains to contributions,” Newsom stated.

In complete, Newsom’s workplace estimated the modifications will save the state $5.4 billion by 2028-2029.

The Medi-Cal growth, mixed with different elements resembling rising pharmacy prices and bigger enrollment by older individuals, has pressured California to borrow and authorize new funding to plug the multibillion-dollar gap earlier this yr. California gives free well being care to greater than a 3rd of its 39 million individuals.

The proposals come forward of Newsom’s scheduled presentation on the up to date finances. Restoration from the Los Angeles wildfires, altering federal tariff insurance policies, and the costly well being care growth are placing a pressure on California’s huge state finances. Lawmakers predict a multibillion-dollar shortfall this yr, and extra deficits are projected for a number of years forward.

Newsom blamed President Donald Trump’s tariff insurance policies for the shortfalls, estimating that the polices have value the state $16 billion in tax revenues. California can be bracing for main finances hits if Republicans in Congress comply with via with a plan to slash billions of {dollars} in Medicaid and penalize states for offering well being care to immigrants with out authorized standing.

Newsom now opens finances negotiations with lawmakers and it is unclear how Democrats who management the Legislature will react to his plan to freeze new Medi-Cal enrollment for some immigrants. A remaining finances proposal should be signed by June. California’s finances is by far the biggest amongst states.

“That is going to be a really difficult finances,” Assemblymember Jesse Gabriel, who chairs the finances committee, stated earlier than Newsom’s proposals have been introduced. “We’ll must make some powerful choices.”

The finances proposals introduced this week will construct on among the impacts of federal insurance policies, however many unknowns stay.

The governor already stated he is planning to reduce on baseline spending this yr. Analysts and economists additionally warn that California will face greater deficits within the tens of billions of {dollars} within the coming years on account of financial sluggishness and inventory market volatility introduced on by the tariff struggle.

The finances Newsom first proposed in January included little new spending. Nevertheless it permits the state to completely implement the nation’s first common transitional kindergarten program and enhance the state’s movie and TV tax credit score to $750 million yearly to deliver again Hollywood jobs which have gone to New York and Georgia. He lately referred to as on Trump to move a $7.5 billion movie tax credit score on the federal stage.

Final yr, Newsom and the Legislature agreed to dip into the state’s wet day fund, slash spending — together with a virtually 10% reduce for almost all state departments — and quickly increase taxes on some companies to shut an estimated $46.8 billion finances deficit.