Sacramento, California – California lawmakers are grappling with a $6.2 billion shortfall in the state’s Medicaid program, Medi-Cal, just a year after launching a historic initiative to provide free health care to all low-income adults, regardless of immigration status. The expansion, while hailed as a progressive milestone, has proven significantly more expensive than anticipated, forcing the state to consider cost-cutting measures and reevaluate its long-term commitments.
The coverage expansion, which extended full Medi-Cal benefits to adults aged 26 to 49 without legal immigration status, added to previous efforts that began in 2015. The state had projected around 700,000 people would enroll, but underestimated how many would sign up. The miscalculation has contributed to a $2.7 billion overspend, exacerbated by a $540 million increase in pharmacy costs and $1.1 billion from unexpected enrollment trends, particularly among older residents.
To meet its financial obligations in March, the Newsom administration borrowed $3.44 billion—the legal maximum—from the general fund and secured an additional $2.8 billion in state funding, which unlocked matching federal dollars. Still, officials have warned the situation is “unsustainable.”…