Governor Gavin Newsom stated on Friday that the budget bill pending in the U.S. Senate might result in up to 3.4 million Californians losing their state Medi-Cal health insurance.
A pillar of President Trump’s second-term agenda, Newsom said the proposed healthcare cuts in the one big, beautiful bill could force the closure of struggling rural hospitals, cut government food assistance for those in need, and raise premiums for those who depend on Covered California, the state’s Affordable Care Act health insurance marketplace.
According to Newsom, this is disastrous. I am aware that this word is frequently overused in this field, but it really does not capture how careless, vicious, and destructive this is in many respects.
About one in five Americans are covered by Medicaid, which typically requires income rather than employment as a prerequisite for participation.
More than a third of Californians, or about 15 million people, are enrolled in Medi-Cal, the state’s Medicaid program. Some of the greatest enrollment rates are found in rural counties that voted for Trump in the November election. Medi-Cal provides healthcare coverage to over half of California youngsters.
The bill’s version is still up for debate in the Senate. Many Medicaid participants would have to demonstrate every six months that they work, volunteer, or attend school for at least 80 hours a month under the present version. By the end of 2026, just after the midterm elections, states would have to have their job eligibility verification systems in place. States risk losing federal Medicaid money if they don’t build up those systems.
Last month, Republican House Speaker Mike Johnson told reporters that the goal of the program was to return the dignity of work to young men who should be working instead of spending their days playing video games and to encourage impoverished Americans to contribute.
This month, the nonpartisan Congressional Budget Office projected that the restrictions would result in 4.8 million more individuals without health insurance and a reduction of around $344 billion in Medicaid funding over a ten-year period.
Experts in health policy caution that employment requirements may result in the loss of benefits for those who qualify but are unable to prove it.
According to Newsom, roughly one-third of California’s 5.1 million residents would probably be able to fulfill the standards after completing the work verification process.
According to Newsom, the remaining two-thirds would have to navigate the maze of manual verification.
According to him, the new Medicaid work requirements could result in 3 million Californians losing their insurance, and 400,000 more could do the same if they had to re-verify their eligibility every six months. According to Newsom, the state’s estimate was based on the number of Medicaid recipients who left New Hampshire and Arkansas following the temporary implementation of their own work requirements in those states.
California was the first state in the country to provide low-income unauthorized immigrants with healthcare last year. Republicans have harshly criticized the expansion, which has cost the state billions of dollars and was supported by Newsom and the Democratic-led Legislature.
On social media Friday, Assembly Minority Leader James Gallagher (R-Yuba City), who has previously urged Newsom to retract that coverage, claimed that Newsom and Democratic lawmakers had completely destroyed the healthcare system.
Significant cutbacks to the healthcare program for undocumented immigrants were included in Newsom’s May budget proposal. These included halting new enrollment in 2026, requiring adults to pay $100 monthly charges, and eliminating complete dental coverage.
In the end, lawmakers decided to mandate that adults who are undocumented immigrants and are between the ages of 19 and 59 pay $30 monthly fees starting in July 2027. In contrast to Newsom’s enrollment cap, their plan allows individuals to reapply for three months if their coverage lapses rather than immediately terminating their eligibility. Democrats agreed to remove full dental coverage for undocumented adult immigrants, but they postponed the change until July 1, 2026.
According to Newsom, 16 underperforming hospitals in 14 rural counties that received a $300 million lifeline in interest-free loans in 2023 could also be seriously threatened by the GOP measure in Congress.
He claimed that the Republican members of Congress from California who backed the bill and represent rural areas of the state, such as Rep. Kevin Kiley (R-Rocklin) and Rep. David Valadao (R-Hanford), are undermining an already precarious system.
In order to reduce a significant source of funding for rural hospitals, some senators are working to amend a rule that would require states to freeze and cut in half the tax they impose on Medicaid providers.
For the numerous rural and critical-access hospitals that are already struggling financially, change might be lethal, according to Michelle Baass, director of the California Department of Health Care Services.
According to Newsom, taken as a whole, the changes may jeopardize California’s efforts to lower the state’s 6.4% uninsured population.
