Gavin Newsom’s team asks for billions more to support Medi-Cal program
Gov. Gavin Newsom’s administration has asked the Legislature for $2.8 billion to keep the state’s Medi-Cal program afloat days after telling lawmakers that it had taken out a multibillion-dollar loan to cover costs through March.
The additional money is needed to support the program, which insures almost 15 million Californians, through the current fiscal year. The Governor’s Office said it expects the Legislature to vote on the request next month.
Last week, the Department of Finance notified legislative budget leaders that the $3.44 billion loan was needed to “complete critical payments” for the program.
Michelle Bass, the director of the Department of Health Care Services, addressed the shortfall at a hearing Monday afternoon.
“We took these steps because it is important to maintain our commitment to our providers and plans to make timely payments for the remainder of the current year to ensure Californians and those on Medi-Cal get the services in the current year.”
Bass said larger caseloads, higher pharmacy costs and other factors have led to the need for more money.
Newsom spokesperson Izzy Gardon said in an emailed statement that the governor would work with Senate Pro Tem Mike McGuire and Assembly Speaker Robert Rivas “to rein in long-term spending — including in Medi-Cal — while working to protect the core health and social services Californians rely on.”
The news was first reported by the Los Angeles Times.
The state expanded Medi-Cal eligibility to undocumented adults between 26 and 49 years of age in 2024, adding about 750,000 residents to its insurance pool. It was the end of a long effort to provide care for people living in California, regardless of immigration status.
Now, legislators must consider whether to make cuts, less than three years after touting it as a cornerstone of California’s effort to guarantee universal health care access.
‘Greatest threat’
The request for more money also adds more pressure on the Legislature as President Donald Trump and Congress could make large cuts to Medicaid.
“We should all be clear about what the greatest threat to California’s ability to provide health care really is,” Assemblymember Dawn Addis, D-San Luis Obispo, said during a health budget hearing Monday. “And that is our own federal government that appears fixated on rectifying years of its own mismanagement on the backs of those with the least economic means who are seniors, people with disabilities and others in our community.
Republican lawmakers, including Assemblymember Carl DeMaio, of San Diego, pointed the blame back at Democrats.
“How many more multi-billion emergency bailout loans will it take before Gov. Gavin Newsom and the state Legislature finally put the interests of California citizens first and immediately cancel the free health care handouts to illegal immigrants?” he said in a statement.
Democratic legislators argue the shortfall is being sensationalized.
Bass, during the hearing, said the health care department will have more detailed information on what has led to the increased costs by the time the administration releases an updated budget plan in May.
This story was originally published March 17, 2025 at 5:25 PM with the headline "Gavin Newsom’s team asks for billions more to support Medi-Cal program."
