Gov. JB Pritzker proposed a $330 million budget cut last month, reducing the expansion of Illinois' undocumented medical coverage for adult immigrants. A state audit found that services for certain age groups exceeded cost estimates by 280%.
California Democrats face the same financial pressure to reduce compensation during budget crunch.
California became the country's first state to provide health care to all eligible income immigrants a year ago, giving Gavin Newsom another liberal achievement to promote in praise of Golden State as a national pioneer.
However, the California program's $9.5 billion price tag is expected to be even higher, with more than $3 billion, already exceeding budget estimates from last summer.
“We shouldn't bear these costs, period, but especially in the budget crisis,” said MP Carl Demaio (R-San Diego).
With expanded healthcare coverage for all residents regardless of California's immigration status, the state is a ripe target for conservatives as President Trump promotes the nationalist agenda in Washington.
Trump's top confidant billionaire Elon Musk is also heavy, claiming that healthcare is “a mechanism by which Democrats essentially attract and maintain illegal immigrants to come here and turn them into voters.”
“Democrats are working hard to maximize payments to illegals, including free luxury hotels in New York and free medical care for illegals in California.
It is illegal for undocumented immigrants to vote in California, but the Republican attack on free state-sponsored healthcare has transformed policy conversations around healthcare into a highly politicized topic of immigration rights.
The exhausted family ends a nine-hour hike on Mount Cuchoma on a fireway near Campo Road after crossing the US/Mexican border in search of asylum.
(Robert Gautier/Los Angeles Times)
The potential for reductions in Medicaid, a federal health insurance for low-income people, could leave the Capitol Democrats to whether immigrant coverage should be maintained if they need to significantly reduce the services of legal residents.
The scale of the Medicaid funding cuts is still unknown, and it is impossible to ensure that the severity of California's reductions is projected. House Republicans have proposed cutting $880 billion across the federal government, with the majority of which having to come from Medicaid.
“If we draw $10 billion each year from California healthcare, that's a lot of material and will have a very serious impact that will ripple over all sectors of hospitals, doctors, home care, nursing homes and health care delivery systems that rely on millions of people.”
Healthcare advocacy groups are working together on a campaign against Medicaid reduction in Washington, claiming that seniors and disabled people are the ones who are losing the most if Medicaid's state version of Medi-Cal is doing their best.
With no federal cuts, California's financial foothold is already very unstable, so Newsom proposed to take $7.1 billion from the state's rainy day fund. It will act like a savings account to ease budgets during the economic crisis and cover the costs of the state program next year. DeMaio argued that if Democrats cut healthcare for undocumented immigrants, the state wouldn't have to break the piggy bank.
The California Department of Treasury said $8.4 billion in funding to provide healthcare to undocumented immigrants will be paid by state taxpayers through the state's general fund. The remaining $1.1 billion is $1.1 billion for emergency room visits and pregnancy care. The federal government covers it under federal laws that require hospitals to stabilize and treat uninsured patients in the emergency department.
The governor's advisor has warned lawmakers that if federal funds are cut by the Trump administration, the state will lose a lot.
Federal funds typically account for about a third of the state budget. Medi-Cal relies on $107.5 billion in federal funds for the current budget year, almost two-thirds of all federal dollars the state has received. About 15 million Californians, one-third of the state, use Medi-Cal, and over half of Californian children receive healthcare coverage through the program.
“A dramatic decline in the federal workforce, or the likelihood of a decline, suspension or layoff of funds, has a detrimental effect on California's ability to provide services that residents rely on, such as medical and highway safety.” “California does not have enough resources to fill the gaps in the programs created by withdrawal or reductions in federal funds.”
Despite current political polarization, support for state-subsidized healthcare for immigration is not always divided by California's party lines.
Written in 1988 by former Senate minority leader Ken Maddie (R-fresno) and signed by Republican Gov. George Dukmezian, the bill provided nursing home care to undocumented pregnant women and immigrants with severe disabilities.
The failed push by former Republican government Arnold Schwarzenegger on universal healthcare, launched in 2007, included national grants for all children, regardless of their legal residence.
Daniel Zingale, former adviser to Schwarzenegger, who worked closely with the proposal, said Democrats didn't like the plan as they were forced to buy health insurance from Californians.
“That's controversial,” Zingale said. “I remember Republican resistance back then to covering undocumented people, including children, which was one of the reasons that sparked Republican opposition.”
Democrat Gov. Jerry Brown signed a bill in 2015 that would provide Medi-Cal compensation to all children under the age of 19.
Newsom expanded its Medi-Cal coverage pool to include all California-qualified immigrants by age category that began in 2020 and ended in 2024.
However, the program has been suffering from cost overruns since its inception.
The estimated cost of providing compensation for all undocumented, undocumented immigrants who are not eligible for income was $6.4 billion in the 2024-25 state budget approved last summer, indicating an increase from previous forecasts.
In February, the Newsom administration told lawmakers during a budget hearing at the Capitol, the cost of expanding compensation to all immigrants this year has once again surged from $6.4 billion to $9.5 billion. The California Department of Treasury believes the increase is due to “higher registration than expected and higher pharmacy costs.”
On Wednesday, the Treasury Department sent a letter notifying leaders of the Congressional Budget and Approximate Budget Committee that the state had made $3.4 billion in loans to cover Medi-Cal spending by the end of March. Democrats are expected to need additional funds beyond the loan to survive the fiscal year that ends in June.
Governor spokesman Izzy Gurdon said Newsom's January budget proposal outlined the need for more funding to support Medi-Cal.
“Rises in Medicaid costs are a national challenge and affects both red and blue conditions,” Gurdon said. “This is not unique to California.”
Pennsylvania, Colorado and Indiana are among the other states that have experienced an increase in the costs of providing state-sponsored health insurance.
The governor's office attributes the increased costs of the California program to higher than expected registration, aging population, and rising health costs across MEDI-CAL, as well as not only for undocumented communities.
But that didn't stop Republicans from criticizing the newspaper for excessive spending.
“Newsom literally became a degenerate stepbrother who wasted his money and returned to seek loans,” Republican leader James Gallagher (R-Yuba City) said on social media site X.
In a statement, Pro Tem Mike McGuire (D-Healdsburg), majority leader Lena Gonzalez (D-Long Beach), and state Sen. Scott Winner (D-San Francisco), budget chairpersons, working with the Congress and Newsom offices, will “provide both the budget to provide care for both the head, the head and the head.”
“Here in Golden State, we continue to stick to our commitment to ensure the healthcare coverage that millions of Californians need to thrive,” they said. “That access to healthcare is threatened by surges in healthcare costs across the country, and by impacting the lives of tens of millions of people across the country due to the dangerous cuts threatened by President Trump and Congressional Republicans.”
Assembly speaker Robert Rivas (D-Hollister) suggested that Newsom was waiting for him to propose a solution.
“There will be a tough choice ahead, and Congressional Democrats will carefully consider the governor's proposal,” he said in a statement. “But let's be clear: we don't roll and leave immigrants behind.”
Some of the more traditional routes to reduce Medi-Cal include reducing eligibility or fees, establishing registration caps, and adding Co-Pay, but there are other options.
Carlos Alarcon, a health and public policy analyst at the California Center for Immigration Policy, says all of these options eliminate access to healthcare for immigrants who need compensation. Expanding access to care will improve the entire public health system and reduce the burden on emergency rooms across the state.
“The expansion of Medi-Cal is something Gov. Newsom is truly proud of and has really campaigned for years, and it's a shame to see such a victory for the governor and the community really take away from us.
