As many as 3.4 million Californians could lose their Medi-Cal health insurance due to cuts proposed in a budget bill currently being debated in the U.S. Senate. Governor Gavin Newsom expressed serious concerns about the potential impact of these cuts, which he described as "devastating."
The proposed legislation, part of President Trump’s agenda, aims to make significant reductions in healthcare funding. Newsom warned that these changes could lead to the closure of struggling rural hospitals, cut government food assistance, and increase health insurance premiums for those using Covered California, the state’s marketplace for Affordable Care Act plans.
Medi-Cal, California’s version of Medicaid, covers over 15 million residents, which is more than a third of the state’s population. This program is especially vital in rural areas, where many residents supported Trump in the last election. Notably, more than half of California’s children receive healthcare through Medi-Cal.
The Senate’s current version of the budget bill includes requirements for many Medicaid recipients to prove they are working, volunteering, or attending school for at least 80 hours each month. States would need to implement these verification systems by the end of 2026, or risk losing federal funding for Medicaid.
Republican House Speaker Mike Johnson stated that the goal of this policy is to encourage low-income Americans to work and regain their dignity. However, the Congressional Budget Office estimates that these new requirements could reduce Medicaid spending by $344 billion over ten years and leave 4.8 million more people without health insurance.
Experts in health policy warn that such work requirements can lead to eligible people losing their benefits simply because they cannot provide the necessary proof. Newsom mentioned that about 5.1 million Californians would need to go through this verification process, and he estimates that only one-third would likely meet the requirements. This could result in approximately 3 million people losing their coverage due to the new verification rules.
Last year, California became the first state to offer healthcare to low-income undocumented immigrants, a move that has faced criticism and has cost the state billions. In response to the current budget pressures, Newsom’s proposal included cuts to this program, such as freezing new enrollment and requiring premiums for adults.
The proposed federal cuts could also threaten 16 rural hospitals, which recently received a $300 million lifeline in loans. Newsom criticized California’s Republican representatives for supporting a bill that could harm these vulnerable healthcare facilities.
In summary, the proposed budget cuts could have far-reaching consequences for millions of Californians and the state’s healthcare system as a whole. Newsom’s administration is working to address these challenges while ensuring that residents continue to receive the healthcare they need.