Newsom Proposes Pausing Health Access for Undocumented, Low-Income Immigrants Amid California's Billion-Dollar Budget Deficit

California Governor Gavin Newsom is proposing a freeze on new enrollment for low-income immigrants without legal status into the state's Medi-Cal program starting in 2026, and the introduction of monthly premiums for those already enrolled beginning in 2027.

The move is part of a broader effort to contain rising costs in the state's Medicaid system, which faces a $6.2 billion budget shortfall, and to address economic pressures from shifting federal trade policies.

The Medi-Cal expansion, which made California the first state to offer full health care access to all low-income adults regardless of immigration status back in 2023, has cost the state $2.7 billion more than expected. Newsom's office now estimates the changes will save $5.4 billion by fiscal year 2028–29, as The Associated Press reports.

"The state must take difficult but necessary steps to ensure fiscal stability and preserve the long-term viability of Medi-Cal for all Californians," the governor's office said in a statement addressing the matter.

Beginning in 2027, those already enrolled in Medi-Cal but classified as having "unsatisfactory immigration status", including undocumented immigrants and some legal residents who are ineligible for federally funded Medicaid, will be required to pay a $100 monthly premium.

The governor's office said the figure aligns with what individuals pay for subsidized plans through the Covered California marketplace. Most Medi-Cal recipients currently pay no premium.

The enrollment freeze will not, however, affect children, and those already enrolled will remain covered. Newsom has not indicated how long the freeze will remain in place. The governor, who had previously defended the expansion as a cost-saving public health strategy, now cites the need for fiscal responsibility amid broader economic uncertainty.

The initial expansion, launched in January 2024, was expected to enroll over 700,000 people and cost the state $3.1 billion annually. It was celebrated by health and immigrant rights advocates as a step toward universal health care, but was implemented just as California's budget deficit soared to a record $68 billion. Rising pharmacy costs, an aging population and slowed economic growth have further strained the budget.