In Sacramento, California’s legislative body has recently approved a modified version of a budget proposal aimed at addressing a significant budget deficit by freezing enrollment in a health care program for immigrants lacking legal status. This move comes as part of efforts to mitigate a $12 billion shortfall in the state’s finances.
California, which boasts the largest state budget in the nation, is grappling with its third consecutive year of fiscal deficits. Consequently, Democratic leaders have scaled down several liberal initiatives, including a major health care expansion for low-income immigrants without legal status, marking a shift in policy priorities.
The approval of this budget proposal coincides with rising tensions in Los Angeles regarding President Donald Trump’s stringent immigration policies. Protests throughout Southern California have been ongoing, occasionally resulting in clashes with law enforcement. Despite President Trump’s assertions of violence, the widespread demonstrations have remained largely peaceful. In response, California has taken legal action against the federal government to halt the deployment of National Guard troops.
This decision to freeze Medicaid enrollment illustrates the challenges faced by Democratic state leaders in balancing progressive ideals with budgetary constraints. Similarly, Illinois and Minnesota, under Democratic leadership, are also considering halting health care access due to their own budgetary challenges.
However, this budget proposal is not the final decision, as Governor Gavin Newsom and lawmakers continue negotiations before the fiscal year’s commencement on July 1. Legislators are under pressure to approve a balanced budget by the deadline or risk losing their salaries. These discussions take place amidst looming concerns of potential federal cuts to health care programs and economic uncertainties that could necessitate further spending reductions.
Republican lawmakers have criticized the proposal for insufficiently addressing fiscal prudence. Despite their push to eliminate funding for health care programs for low-income individuals without legal status, this suggestion did not gain traction. “It’s a challenging budget due to the unsustainable spending by the governor and legislative Democrats over many years,” expressed Republican Assemblymember James Gallagher after the vote.
Currently, the state provides health care through Medi-Cal, California’s Medicaid program, to over 1.6 million individuals without legal status. Under Newsom’s plan, starting in 2026, low-income adults without legal status would no longer be eligible for Medi-Cal, although those already enrolled would maintain their coverage but would face a $100 monthly premium from 2027. This policy aims to save the state $5.4 billion by fiscal year 2028-2029.
While lawmakers largely agreed on freezing enrollment for non-legal status adults, the proposal also allows individuals to re-enroll within six months if coverage is lost due to missed payments. Moreover, the monthly premium would be reduced to about $30 and apply only to adults aged 19 to 59, beginning in July 2027. The revised proposal is projected to save approximately $3.8 billion by fiscal year 2027-2028.
However, some advocates warn that these changes may lead to individuals losing coverage due to unaffordable premiums, potentially increasing emergency room visits. “This approach does not adequately address the health and safety of communities that bolster our economy and contribute billions in state taxes,” commented Masih Fouladi, Executive Director of the California Immigrant Policy Center.
A divide exists among Democrats concerning the Medicaid enrollment freeze, with some arguing that it contradicts California’s values and creates a two-tier health care system. Assemblymember Sade Elhawary pointed out the inconsistency of the policy with the state’s previous commitment to universal health care and equated the premium imposition to the immigrant-targeting policies of the Trump administration.
On the other hand, Democratic state Sen. Akilah Weber Pierson justified the budget proposal, emphasizing that it retains benefits for currently enrolled individuals and averts more severe cuts in social services. Lawmakers rejected the governor’s proposals to cut funding for certain in-home services for low-income residents and Planned Parenthood, indicating a commitment to provide essential support where possible. “No one currently covered will lose their health care benefits,” she assured.