California Gov. Gavin Newsom is requesting an additional $2.8 billion loan to address a bloated deficit in the state’s Medicaid program, which has surpassed budget expectations largely due to coverage for illegal immigrants.Â
The new request comes after the Democratic governor asked lawmakers last week for a $3.4 billion loan from the general fund to cover outstanding costs for Medi-Cal, one of the state’s primary healthcare programs that takes both federal and state taxpayer dollars.
“With tough fiscal choices ahead, Governor Newsom, jointly with Pro Tem McGuire and Speaker Rivas, will evaluate proposals to rein in long-term spending — including in Medi-Cal — while working to protect the core health and social services Californians rely on,” Newsom spokesperson Izzy Gardon told Fox News Digital in a statement Tuesday.Â
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California Gov. Gavin Newsom, D-Calif., recently signed a law regulating additives used in popular foods in California. (MediaNews Group/East Bay Times via Getty Images)
The additional $2.8 billion would keep the health care program afloat through June.
Newsom’s office pushed back on the skyrocketing healthcare costs being solely due to illegal immigrants on the programs. Instead, they attribute the increases to higher overall enrollment for all populations and pharmaceutical costs. The administration also pointed to other states, Pennsylvania and Indiana, which are also facing budget shortfalls in their Medicaid programs.
However, Republicans in the legislature, who have been hounding against increased spending in the state for years, blame the state’s policies as the culprit for the under-projection.
“That’s a staggering $6.2 billion over budget…and the costs keep climbing with no end in sight,” California Senate Republican Minority Leader, Brian Jones, wrote in a post on X on Monday. “Californians should not be forced to shoulder the burden of radical Democrats’ reckless financial mismanagement.”
“Even Jerry Brown refused to expand Medi-Cal to all illegal immigrants because he knew it was fiscally irresponsible and unsustainable,” Jones wrote. “Now under Newsom, legal residents are paying the price both financially and in reduced access to healthcare. The public deserves answers: Why are the costs so much higher than what Newsom promised? What is Newsom’s plan to fix the financial disaster he created?”
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Illegal migrants are detained by the U.S. Coast Guard Southern California. (Â USCG Southern California via X)
Last year, California expanded Medi-Cal to cover all low-income adults ages 26 through 49, regardless of immigration status, making it the first state to do so. Roughly 1.6 million illegal immigrants are enrolled in the state’s healthcare program, according to state data, and 15 million California residents are enrolled.
“Both lawfully present and not lawfully present individuals can apply through Covered California to see if they are eligible for a health plan through Covered California or Medi-Cal,” the state’s healthcare marketplace, Covered California, says on its website. “There is no ‘waiting period’ or ‘five-year bar.'”
The state initially estimated the program would cost just under $6 billion in FY 2024 to 2025. However, one year into the program, that budget has ballooned. In response, House Republicans recently advanced a proposal to cut $880 billion from a group of programs, mainly Medicaid, over the next 10 years.Â
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(Republican lawmakers in Sacramento say state policies that allow illegal immigrants to enroll in Medi-Cal are partly to blame for the massive budget shortfall.)
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Newsom’s latest budget proposal projects that California will spend $8.4 billion to cover illegal immigrants in Medi-Cal for 2024-2025, followed by $7.4 billion in 2025-2026. During a budget hearing with legislators, Michelle Bass, director of the Department of Health Care Services – which manages Medi-Cal – the state significantly underestimated the number of illegal immigrant enrollees last year.
Bass said during the hearing the department had just one month of data on the new “unprecedented” policies before it had to make projections for the budget signed by Newsom, “and all happened at once.”
