California Governor Gavin Newsom approved a 321 billion dollar state budget on June 27, 2025. The plan pauses Medi-Cal enrollment for undocumented adults starting January 1, 2026. It ends full dental coverage six months later. It adds a 30 dollar monthly fee for adults ages 19 to 59 on July 1, 2027. Newsom linked the budget to major housing reforms. This move aims to close a projected 12 billion dollar gap in state finances.
Budget Changes
The budget freezes new Medi-Cal sign ups for undocumented adults but keeps coverage for children. On July 1, 2026, full dental benefits end for adult undocumented enrollees. On July 1, 2027, they must pay 30 dollars every month to keep coverage. At the same time the state raises the asset limit for Medi-Cal from 2,000 dollars to 130,000 dollars for individuals and from 3,000 dollars to 195,000 dollars for couples. It also ends coverage for some weight loss drugs.
Impact on Immigrant Communities
Health advocates warn that these cuts will leave many without care. A UC Berkeley study projects over one million fewer people on Medi-Cal in coming years. Another report suggests up to 3.4 million Californians could lose state health coverage under these rules. Groups like Health4All say this will harm families and strain clinics and emergency rooms. Hospitals may face more unpaid bills. Preventive care gaps could push costs higher in the long run.
Political Reactions
Republicans praised the tighter limits. They said deeper cuts are needed to balance the books. Assembly Minority Leader James Gallagher called the current plan not enough. Some Democrats pushed back. Senator Maria Elena Durazo said adding fees is a betrayal of immigrant families. Newsom argued that federal tariffs cost the state 16 billion dollars in revenue and forced tough choices.
Housing Reform Link
The budget will not take effect if lawmakers do not pass big changes to the California Environmental Quality Act. Newsom wants to speed up housing construction in cities. Labor unions object to changes that they fear will lower wage protections. This link creates high stakes for both budget and housing bills. If housing reforms fail, the budget deal collapses too.
Implementation Timeline
January 1, 2026 – Freeze new Medi-Cal enrollment for undocumented adults. Affected people get a three month window to reapply if they lose coverage.
July 1, 2026 – End full dental coverage for adult undocumented enrollees.
July 1, 2027 – Begin 30-dollar monthly fees for adult undocumented beneficiaries.
My Analysis
This budget marks a clear shift from Newsom’s earlier promise of free health care for all low income immigrants. The phased approach gives time to adjust but risks leaving many without needed care. Tying the budget to housing reform is a bold tactic. It shows Newsom’s drive to link fiscal policy to other priorities. But it also risks gridlock if California lawmakers cannot agree. In the end, this plan reveals the tension between idealism and reality in state politics.
Sources: The New York Times
