Office of the Governor of California / Wikimedia Commons
CV NEWS FEED // California has a $6.2 billion budget gap in its Medicaid funding, partly due to Democratic state lawmakers’ decision to open free health care coverage to illegal immigrants.
AP News reported that the state last year opened Medicaid health coverage to all low-income adults regardless of their citizenship status, projecting that roughly 700,000 illegal residents would be covered. Prior to 2024, free health care coverage for people living in the country illegally had applied only to children up to age 25 of families with low income or people over the age of 50.
According to AP News, the initiative is “costing far more than the state projected”; the program went $2.7 billion over its budget. AP News reported that the state underestimated how many people would sign up for coverage. Officials only had a month’s worth of data to base projections on. .
AP News added that rising pharmacy costs and larger enrollment in Medicaid by older individuals are also contributing to the budget deficit.
To cover the gap, Democratic Gov. Gavin Newsom said that the state took out a $3.44 billion loan from the general fund to cover March’s payments. AP News noted that the loan is the maximum amount allowed under state law.
However, AP News added, “The Department of Health Care Services, which oversees the state’s Medicaid program, this week said it will need an additional $2.8 billion to cover costs already committed through June. That money will need to be approved by the Legislature in April.”
Newsom has continued to defend the state’s Medicaid program, arguing that free preventative care saves California money in the long run. He also has said that slashing eligibility for the program “is not on my docket.”
AP News reported that California’s Medicaid budget gap could be further affected if the Republican-controlled Congress passes an initiative to cut billions in Medicaid funding.
“More than half the state’s Medicaid funding comes from the federal government. For the next fiscal year, that’s roughly $112.1 billion,” AP News reported. “Federal funding doesn’t cover costs related to preventive care for immigrants without legal status.”
