PULSE POINTS:

❓What Happened: The state Medi-Cal program in California went insolvent earlier this year, requiring $3.44 billion in loans, with Republicans pointing to healthcare coverage for illegal immigrants as a major contributing factor.

👥 Who’s Involved: Governor Gavin Newsom (D), the California Legislative Latino Caucus, California taxpayers, and illegal aliens.

📍 Where & When: California; budget discussions ongoing.

💬 Key Quote: “The cost of providing free healthcare to illegal immigrants is $11.4 billion, so if we just didn’t do that, that would eliminate our budget deficit,” said State Senator Brian Jones (R).

⚠️ Impact: California faces a $12 billion budget deficit, with debates over healthcare costs for illegal immigrants, potential tax hikes, and federal funding changes adding pressure.

IN FULL:

California’s Medi-Cal, the state-run Medicaid program that provides healthcare for low-income residents and illegal immigrants, has gone insolvent, requiring $3.44 billion in loans earlier this year to continue operations. The program has become a focal point of the state’s ongoing budget crisis, with a $12 billion deficit looming, and some Democrats in the state legislature are pushing tax hikes instead of needed reforms to Medi-Cal.

Republican lawmakers, including State Senate Minority Leader Brian Jones, have been vocal in attributing much of the financial strain to the state budget on the inclusion of illegal immigrants in Medi-Cal coverage. “The cost of providing free healthcare to illegal immigrants is $11.4 billion, so if we just didn’t do that, that would eliminate our budget deficit,” Jones stated. However, he acknowledged other potential areas for budget savings.

The National Pulse previously reported that Governor Gavin Newsom’s administration has proposed adjustments to Medi-Cal, including pausing enrollment for illegal immigrants aged 19 and older in “full-scope coverage” and introducing a $100 monthly premium for illegals currently enrolled in the healthcare program. However, the Democrat governor’s solution is already receiving pushback from within the California Democratic Party.

Members of the California Legislative Latino Caucus are balking at Newsom’s proposed pause and premium hike. Instead, they are pushing for tax increases to bridge the funding gap and eliminate the $12 billion deficit. Newsom, who is eyeing a potential 2028 presidential bid, has thus far been non-committal on a potential tax increase to cover the budget.

Despite Republicans and Democrats like Newsom both pointing the finger at illegal immigrant enrollment as a primary driver of the budget deficit and Medi-Cal insolvency, the problem may be far more systemic.

“A lot of doctors in California that used to provide Medicare and Medicaid have closed up shop, moved to other states. A lot of other doctors that are still here have stopped taking those kinds of patients, even if they’re here legally or illegally, because the reimbursement rates are so low, the doctors actually lose money when they take a Medicare or Medicaid patient,” said State Senate Minority Leader Brian Jones.

Potential federal changes to Medicaid funding could also complicate matters for California. Currently, Congress is considering reducing the federal match rate for non-emergency care from 90 percent to 80 percent. Newsom warns that such changes could cost the state billions.