California’s $2.8 Billion Bailout: Newsom Faces Criticism Over Medicaid Expansion

SACRAMENTO, Calif. — California Governor Gavin Newsom has authorized a $2.8 billion bailout for the state’s Medicaid program, known as Medi-Cal, in response to skyrocketing costs linked to the inclusion of illegal immigrants in the coverage. The decision, confirmed by Newsom’s office on Monday, aims to address a significant budget shortfall projected to impact approximately 15 million Californians, including noncitizens.

The Medicaid program’s deficit has surged after it expanded last year to provide healthcare services to illegal immigrants. Initially estimated to cost under $6 billion for the 2024-2025 fiscal year, the latest projections indicate that the expenses associated with covering illegal immigrants could reach $8.4 billion. This marks a hefty increase from earlier estimates, prompting concerns among state lawmakers about the program’s sustainability.

Last month, Newsom requested a $3.4 billion loan from the state’s general fund to help cover $6.2 billion in outstanding Medicaid costs. California Republican state Senate Minority Leader Brian Jones voiced his opposition on social media, stating, “We must stop new enrollments of illegal immigrants and rein in this unsustainable program before it collapses entirely.” His remarks reflect growing frustration from some lawmakers regarding the direction of Medi-Cal amidst increasing costs.

Currently, state data reveals that over 1.6 million illegal immigrants are enrolled in Medi-Cal, a substantial portion of the program’s total enrollment. As the state grapples with these challenges, the push for fiscal responsibility continues, with Republican lawmakers advocating for a proposed $880 billion reduction in Medicaid spending over the next decade.

Newsom’s administration has not responded to specific inquiries regarding the long-term strategies to stabilize Medi-Cal financing. A spokesperson indicated that the new measures aim to ensure ongoing access to healthcare services for millions of residents, regardless of immigration status.

This situation unfolds as Governor Newsom faces increasing scrutiny regarding the management of state resources and the political implications of Medicaid expansion in California. As the state approaches critical budget discussions, the impact of these healthcare decisions on the broader political landscape may become more pronounced.