• Governor Newsom proposes pausing new enrollments in Medi-Cal for undocumented immigrants.
• Proposed changes include a $100 monthly premium for current beneficiaries starting in 2027.
• The state faces a $12 billion budget deficit attributed to Trump's tariff policies.
• The revised budget aims to save California $5.4 billion by fiscal year 2028-29.
• Children's coverage will continue unaffected by these changes.

California Governor Gavin Newsom has unveiled proposals to scale back health care coverage for undocumented immigrants, citing an expected $12 billion budget deficit driven by economic downturns and federal policies. Under his plan, the state intends to freeze new enrollments of low-income undocumented adults in the Medi-Cal program starting January 1, 2026. Additionally, a $100 monthly premium will be applied to current beneficiaries beginning in 2027, which is projected to save the state approximately $5.4 billion through 2028-29, according to The New York Times and CBS News.

The decision to pause enrollment is part of a broader budget strategy as the state faces rising costs associated with Medi-Cal, the state’s Medicaid program that provides health care coverage regardless of immigration status. Newsom indicated that costs had exceeded initial estimates, leading to an unsustainable financial situation for the program. California has been operating under the fiscal pressure of decreased revenues due to President Trump's tariff policies, which alone are estimated to cost the state about $16 billion in tax revenues, reports HuffPost and Reuters.

Health advocates have expressed concerns that these changes may hinder access to essential services for immigrant communities. Newsom, however, explained that the policy adjustments are necessary for fiscal stability, asserting, "The state must take difficult but necessary steps to ensure fiscal stability and preserve the long-term viability of Medi-Cal for all Californians," according to Los Angeles Times and The Hill.

Despite these proposed changes, existing enrolled children and individuals on Medi-Cal will not lose their coverage. The announced proposals address the growing fiscal challenges, including a new report indicating that California might face budget deficits in the tens of billions in the following years due to ongoing economic volatility and rising health care costs. Newsom indicated the fiscal strategy may also be influenced by broader cut proposals circulating in Congress that threaten Medicaid funding for states, which includes cuts aimed at states providing health care to undocumented immigrants, highlighting the intricate interplay of state and federal policies, according to CBS News, HuffPost, and The New York Times.