Newsom wants Medicaid rollback for illegal immigrants

California Gov. Gavin Newsom during a Wednesday presentation of the new $321.9 billion state budget said he wants to freeze Medicaid enrollment of adult illegal immigrants starting next year. He won’t remove illegal immigrants already enrolled in Medi-Cal, the state’s version of Medicaid, he said. But he plans to charge them $100 per month starting in 2027. The changes will save the state about $5.4 billion by fiscal year 2028-29, Newsom estimated. However, the governor stressed that many of the proposed changes are subject to the approval and modifications of the California legislature.

Newsom has taken a couple of other unexpected policy positions in recent months, coming out in support of protecting women’s sports from participation by male athletes and suddenly cracking down on homeless encampments. He is frequently mentioned as a possible Democratic candidate for the 2028 presidential election.

Newsom said an expected $16 billion drop in state tax revenues over the next fiscal year spurred the change. He blamed the projected slump largely on economic volatility that he said was caused by President Trump’s tariff and foreign relations policies. Newsom’s budget plan doesn’t account for the roughly $880 billion cuts to Medicaid over a 10-year period currently proposed in the U.S. House of Representatives, he said.

Medi-Cal has gone $2.7 billion over its anticipated budget of $6.4 billion in benefits to illegal immigrants, according to the California Assembly’s budget committee. Newsom also said Medicaid-funded mobile crisis units for homeless people pushed the program further over budget. More seniors have also enrolled than expected.

What else did Newsom highlight in his budget plan?

• $1.7 billion will go to a greenhouse gas reduction fund, most of which will be used for wildfire prevention and forestry management.

• An additional $1.2 billion will go to a transitional kindergarten program for 4-year-olds, ensuring a 1:10 student-to-teacher ratio.

• Homelessness and housing affordability and availability are still a crisis in the state, Newsom said. He strongly urged the state legislature to pass bills fast-tracking housing production. Newsom also said he’d seen 16,000 homeless encampments cleared.