Governor Gavin Newsom recently signed legislation to close a $2.8 billion budget gap in Medicaid services.
This funding will ensure coverage for 15 million people, including illegal immigrants, through June.
Driving the news: The budget gap arose after the state expanded coverage to low-income adults, regardless of immigration status.
- California underestimated the number of people who would enroll in the program, leading to a $2.7 billion excess cost.
- Rising pharmacy costs and increased enrollment by older individuals added pressure on the state’s budget.
- The state took a loan of $3.44 billion and allocated an additional $2.8 billion in state funding to cover costs.
What we’re watching: Newsom’s administration is looking to cut costs and may end pandemic-era protections that prevented disenrollment from Medicaid.
- Newsom and Democratic leaders aim to maintain coverage for immigrants without legal status.
- Republican lawmakers have criticized the expansion, calling for an audit of Medicaid to ensure it meets the needs of vulnerable populations.
- Congress’s threats to cut Medicaid funding may require California to cut coverage, limit enrollments or raise taxes.
- State officials fear that funding cuts could disrupt coverage for millions of residents, as a significant portion of Medicaid funding comes from the federal government.
What they’re saying: “Democrats’ bad accounting has brought Medi-Cal to the breaking point, making it harder for patients to get in to see a doctor,” said Assembly Republican Leader James Gallagher in a statement. “We owe it to Californians – and to the vulnerable people who depend on this program – to make sure Medi-Cal is meeting their needs.”
