In January of 2024, California expanded Medi-Cal (the state's version of Medicaid) to cover all illegal immigrants who meet the income threshold. But surprising no one but California Democrats, that decision turned out to be a lot more expensive than predicted. In fact, in April the state had to take out a $3.4 billion loan to cover the additional cost for just a couple of months until the new budget negotiations began.
And once they did begin, Gov. Newsom made it clear the state was facing a big deficit of nearly $12 billion dollars. He blamed this on the "Trump slump" but the reality is that most of this deficit was going to hit the state long before Trump announced tariffs.
Unveiling his revised $322 billion spending plan, Newsom repeatedly blamed the tariffs for undermining key industries and eroding financial markets that are crucial to California’s fiscal health — a “Trump slump” that he forecasts will reduce tax revenues by billions of dollars next year...
But the size of Newsom’s budget proposal remains virtually unchanged from an earlier version in January, when the governor projected a modest surplus, underscoring that runaway expenses for subsidized health care and other state programs are the biggest long-term challenges...
Medi-Cal, the state’s health insurance program for low-income people, has reported a more than $6 billion cost overrun this year — in part because an expansion to include immigrants without legal status brought in more new enrollees than expected — and it needed an emergency cash infusion in March.
It's clear that the expansion of Medi-Cal to illegal immigrants was a big part of the problem because Newsom himself has proposed putting further expansion on hold.
That program is targeted for major reductions in Newsom’s budget proposal: a freeze on new enrollment of adults who are in the country illegally, as well as a $100 monthly premium and cuts to long-term care and dental benefits for those who maintain their coverage. The governor estimates those moves could eventually save more than $6 billion annually.
As I wrote here, Newsom is also looking to cut state funds to health providers, a move which could be a serious blow to Planned Parenthood. Money is fungible so you can blame the deficit on anything in the budget, but Republicans have noted that the budget hole the state is facing is almost exactly the same size as the cost of Medi-Cal expansion to cover illegal immigrants.
"That’s going to continue to be a big debate here in California as we're wrestling with a $12 billion dollar deficit and the cost of providing free healthcare to illegal immigrants is $11.4 billion dollars, so if we just didn't do that, that would eliminate our budget deficit," California State Senate Minority Leader Brian Jones said...
Meanwhile, Assembly Minority Leader James Gallagher told Fox News Digital in an interview that the budget shortfall is "a total disaster" that "was completely predictable."
"You know, two years ago, Gavin Newsom and the supermajority Democrats decided to fund illegal immigrant healthcare through our Medi-Cal program. And everybody said it's gonna be billions of dollars. It's not sustainable. And at the time, Biden was president, and people were coming across the border, millions of people. We had no idea. And I think a lot of them came to California and signed up. And so now we have a completely unsustainable, bankrupted Medi-Cal system that's required $3.4 billion worth of loans to prop up."
Despite all of this, there was an opinion piece in the SF Chronicle Sunday claiming the Medi-Cal expansion was a big success.
Republicans, possessed by anti-immigrant fervor, have blamed the growing costs primarily on the undocumented. Congressional leaders are citing the California expansion to justify hundreds of billions in cuts to Medicaid over the next 10 years.
Fearing the impact, some Democratic politicians have buckled. In California, even progressive politicians have suggested that the state can no longer afford the full expansion.
Among these are Gov. Gavin Newsom, who just revised his budget to freeze program enrollment for immigrant adults and charge $100-per-month premiums to those already enrolled.
This is bad politics — caving to anti-immigrant prejudice only encourages more prejudice. It’s even worse health policy...
In a saner country, the results would be seen as successes
In a kinder country, the additional costs would be seen as payback for the deferred costs of pain.
Asking American taxpayers to subsidize the health care of foreign nationals to the point that the state is facing a big budget deficit seems like a policy destined to encourage prejudice to me. We're not talking about legal immigrants who went through the system. We're not even just talking about farm workers who pick crops. We're talking about anyone who made it over the border by lying about an asylum claim or sneaking across with the help of smugglers. Now we're supposed to reward that behavior with free (or almost free) health care on top of free schools and various other free benefits.
I can see why millions of illegal immigrants would think that's a great deal. I can't see why American taxpayers would want to pay for it on top of already paying for the health care needs of millions of poor Americans plus the cost of their own health care which definitely isn't free.