Los Angeles – On June 30, Governor Newsom finalized California’s budget after negotiating with the Legislature. The deal spares some Medi-Cal programs from the Governor’s proposed cuts, but it still cuts health care coverage that low-income Californians, older adults, people with disabilities, and immigrant communities need and deserve.
“California avoided some of the most devastating proposed Medi-Cal cuts, but this budget still takes our state in the wrong direction,” said Kim Lewis, Managing Director of California Advocacy. “Delaying harmful cuts does not eliminate them, and too many Californians will continue to face uncertainty about the health care they rely on. NHeLP will continue working to protect Medi-Cal and advance equitable access to health care for everyone.”
Wins: Cuts Rejected:
- In-Home Support Services (IHSS) – No cuts were adopted to the IHSS program, protecting access to home and community based essential services for 900,000 older or disabled adults, and children who live at home.
- Program for All-Inclusive Care for the Elderly (PACE) – Proposed cuts to PACE funding and the capitation rate (the fixed monthly payment PACE providers receive per participant, meant to cover all their care) were rejected, preserving access to comprehensive, person-centered care for older adults.
- Mobile Crisis Services – No cuts to Medi-Cal mobile crisis services, protecting access to critical behavioral health services in the community.
- Restoration of the Assets Test – The new asset limits ($21,000 for an individual and $31,000 for a couple) are substantially higher than the Governor’s proposed $2,000/$3000 asset limits, but still much lower than the current threshold. The budget delays lowering the current Medi-Cal asset limits ($130,000 for an individual, $195,000 for a couple) until July 1, 2027. This is a partial win for people who would otherwise be forced to spend down savings to qualify for Medi-Cal and long-term care.
Losses: Cuts That Remain or Are Delayed:
- Immigrant Medi-Cal overage – Many harmful changes for immigrant Californians remain in the final budget, although the budget temporarily preserves immigrant health care by delaying most cuts to July 1, 2027, pushing these decisions to the next Governor and the 2027-28 budget. If implemented in July 2027, it would:
- Restrict Medi-Cal eligibility for certain non-citizens to emergency and pregnancy related services only,
- Increase monthly premiums to $50 for certain immigrants ages 19 to 59,
- Eliminate dental benefits for certain undocumented Medi-Cal enrollees, and
- Reduce clinic payments.
- It applies federal work requirements to adult immigrants receiving state-funded Medi-Cal (beginning in 2027) even though the state is not required to do so.
- It shifts roughly 2 million Medi-Cal enrollees, mostly immigrants with unsatisfactory immigration status, to fee-for-service Medi-Cal (beginning January 1, 2027), eliminating access to some managed care only Medi-Cal benefits, including Enhanced Care Management.
California has long been a national leader in expanding Medi-Cal and advancing health justice. This budget retreats that progress. At a time when federal policy changes are already threatening Medi-Cal coverage, California should be protecting and strengthening Medi-Cal, not scaling it back. NHeLP will continue to fight against these harmful health care cuts over the next year.
