In an effort to reduce a $12 billion deficit, California lawmakers passed a budget proposal on Friday that would suspend enrollment in a state-funded health care program for undocumented immigrants.
Democratic Governor Gavin Newsom’s May proposal is a scaled-down version of theirs. For the third consecutive year, California, which has the biggest state budget in the nation, is in deficit.
Democratic leaders have begun to reduce a number of liberal policy initiatives, including the historic extension of health coverage for low-income adult immigrants without legal status, as a result of this year’s budget deficit.
The vote takes place as tensions over President Donald Trump’s crackdown on immigration in Southern California are rising in Los Angeles.
Trump claimed that protests had descended into violence and that, in defiance of local and state authorities, more than 4,000 members of the National Guard and 700 Marines had been mobilized as demonstrators went to the streets and occasionally battled with law officers throughout the days-long protests. Most of the protests have been nonviolent.
A federal appeals court halted a judge’s decision that had prevented the Trump administration from deploying National Guard personnel late Thursday. The case is scheduled for a hearing on June 17.
The Medicaid enrollment freeze decision demonstrates how difficult it is for Democratic state leaders to defend progressive agenda items from financial constraints.
Due to budget deficits this year, Illinois and Minnesota—both of which have Democratic governors—are on course to deny low-income persons without legal status access to health care.
This isn’t the state’s final budget. Solutions are still being negotiated between Newsom and legislative leaders before to the July 1 start of the next fiscal year. Lawmakers risk losing their pay if they don’t adopt a balanced budget by Sunday.
In addition, Democratic state leaders are preparing for the possibility of federal health care program cuts as well as other general economic uncertainties, like federal tariff policies that would compel them to make even more drastic cuts.
Republican lawmakers claim that in order to prevent future deficits, the Legislature’s budget falls short in this area. Among other things, the caucus failed to pass a motion Friday that would have cut off money for the health care programs for low-income individuals without legal status.
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Adding premiums and freezing access
According to the budget, almost 1.6 million individuals without legal status are registered in the state’s health care program this fiscal year.
Beginning in 2026, low-income persons without legal status would no longer be able to apply for the state’s Medicaid program, Medi-Cal, under Newsom’s proposal.
In 2027, those who are currently enrolled would have to begin paying a $100 monthly fee instead of being terminated from their insurance. By fiscal year 2028-2029, state officials projected that the state will save $5.4 billion.
Although lawmakers largely agreed that enrollment for adults without legal status should be stopped, they also included a clause that would allow individuals to re-enroll within six months in the event that they lose coverage due to nonpayment.
Under the Legislature’s plan, the monthly premium would also drop by almost a third to $30 and would only be applicable to adults aged 19 to 59 beginning in July 2027. A savings of almost $3.8 billion by fiscal year 2027-2028 would result from the idea.
According to campaigners, the plans will probably lead to more individuals using emergency rooms and people losing coverage because they are unable to pay the costs.
