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By HPN Staff

California lawmakers will limit the number of undocumented immigrants who can enroll in the state’s health insurance plan for low-income individuals after years of expanding access to the program to adults without legal status.

Governor Gavin Newsom approved the reversal — part of a larger deal to close a $12 billion budget deficit — amid public polling showing a majority of Californians oppose the expansion.

Starting in January 2026, the state will freeze new enrollments in Medi-Cal — the state’s Medicaid program — for “undocumented individuals” aged 19 and older, according to a summary of the budget deal released by state legislative leaders.

Over the long term, the freeze is projected to save the state $3.3 billion per year, according to legislative estimates.

Why it matters

Medicaid is a public health program for low-income individuals and families that is jointly funded by the federal government and the states.

The recently passed federal budget reconciliation bill took aim at Medicaid coverage for undocumented immigrants as a source of potential savings, along with work requirements for able-bodied adults.

Critics of the budget bill argue that the potential savings are exaggerated. Kaiser Family Foundation (KFF), for example, says emergency Medicaid spending on ineligible immigrants is less than 1% of the program’s overall spending. 

Over the next decade, the budget reconciliation bill is projected to deliver $1 trillion in savings from Medicaid, by allowing the federal share of the program’s spending to increase by 7% over 10 years instead of the previously projected 18%, according to the Healthcare Financial Management Association (HFMA).

With changes to federal funding, states will have to make reforms to their own Medicaid programs, HFMA says.

States that currently cover adults regardless of their immigration status may follow California’s lead in order to find Medicaid savings in their own budgets.

The bigger picture

California is one of seven U.S. states that allow at least some undocumented adults to enroll in public health coverage, according to May 2025 data from KFF. The other states are Colorado, Illinois, New York, Minnesota, Washington and Oregon.

A much larger group of states will allow children and pregnant women to enroll in public health coverage regardless of their immigration status, according to the National Immigration Law Center.

The Congressional Budget Office has estimated that providing “emergency” Medicaid services to ineligible immigrants between 2017 and 2023 cost taxpayers a total of $27 billion, with two-thirds of the cost borne by the federal government and one-third by the states.

However, the CBO was unable to determine how much of the $27 billion was spent on public health coverage for immigrants who are unlawfully in the country versus immigrants who have legal status but do not meet other eligibility requirements for Medicaid.

Additional context

The expansion took place between 2019 and 2024, according to the California Budget & Policy Center.

Polling conducted by the Public Policy Institute of California (PPIC) in June 2024 found that 61% of likely voters in the state oppose providing health coverage to undocumented immigrants.

This marked a shift in public opinion, PPIC said, because previous polls taken between 2015 and 2023 on this question previously showed majority support in California for providing health coverage to undocumented immigrants.

Article Image: Ringo Chiu / Shutterstock.com


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