Governor’s budget continues to put immigrant communities, Covered California enrollees, and the whole health system at risk by delaying action. CA lawmakers must act now to prevent coverage losses and shore up our health care system from H.R. 1 cuts 

Governor Newsom unveiled his proposed budget today, which keeps in place harmful cuts to our immigrant communities, while also including new cuts that put the population further at risk. Despite a looming multi-billion-dollar budget gap due to the health care and other cuts in the Trump Administration’s H.R. 1, the budget also does not call for any additional revenue to backfill those losses. Health Access Executive Director Amanda McAllister-Wallner issued the following statement in response:  

On the changes to health care in the proposed budget: 

“The Governor’s budget belies the huge losses in health care funding that the state is facing in the coming years. Hundreds of thousands of Californians have already begun to feel the pain of these cuts – whether immigrants facing the Medi-Cal enrollment freeze or Covered California enrollees facing skyrocketing premiums – and millions more will see their coverage imperiled in the years ahead. This proposed budget includes no new solutions to protect coverage while doubling down on harmful policies like imposing California-specific work requirements on immigrant communities and abandons decades of precedent for providing full-scope Medi-Cal to refugees, asylees, and other lawfully present immigrants who are losing federal eligibility.” 

On the need for revenue solutions:  

“Rather than exacerbating these projected coverage losses, California must take steps now to shore up funding for the Medi-Cal system, which provides coverage for 15 million Californians and is being targeted for unjust cuts by the federal government.  H.R. 1 gave massive tax breaks to the wealthiest corporations and individuals in our state at the expense of health care for millions of Californians. We urge our lawmakers to meet this moment with the boldness it demands. We cannot – and will not – allow the health of Californians to be sacrificed for corporate profit.” 

Health care highlights in the Governor’s budget: 

Continues to unfairly target undocumented and UIS Californians by retaining cuts from the 2025-2026 budget and putting them at further risk: 

• Cuts maintained from 2025-2026: 
  • A freeze on Medi-Cal enrollment for undocumented Californians which began January 1
  • Elimination of dental coverage on July 1, 2026
  • Implementation of a $30 per month premium starting July 1, 2027 
• This current proposal also: 
  • Subjects immigrant populations to work reporting requirements. The budget proposes to impose these requirements despite not being required by H.R. 1, and despite the near impossibility for many covered immigrants to document their compliance given other federal employment laws. 
  • Denies full-scope Medi-Cal benefits to immigrant populations being pushed off federal health care programs, inconsistent with existing policies which have extended coverage to all income-eligible Californians regardless of immigration status. Under the proposal, these immigrants would receive only emergency and pregnancy-related services.  

General fund H.R. 1 impacts: 

• Work reporting requirements: $13 billion reduction in Medi-Cal spending by 2029-30 leading to coverage losses.
• More frequent redeterminations in Medi-Cal: $3 billion reduction in Medi-Cal spending by 2029-30 leading to coverage losses.
• MCO tax changes: A reduction of at least $1.1 billion in funding for Medi-Cal from January 2027-June 2027, with potential future reductions growing substantially and shifting cost to the general fund.
• Hospital Quality Assurance Fee (QAF): Changes to the QAF will result in $1.3 billion increase in general fund spending.
• Reduction in federal matching funds for emergency services: $872 million cut by 2029-30.
• MCO tax changes – behavioral health: Will bring in $95.5 million revenue in current budget.
• Retroactive Medi-Cal timeframes: Will result in a $23 million cut by 2026-27.
• The state received $233.6 million in federal funds the Rural Health Transformation Program that was part of H.R. 1 – the same amount as Montana, a state with 1 million people. This will support access to care and workforce development, but pales in comparison to the cuts to rural health services in H.R. 1.