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California Budget faces Criticism for Health Care Cuts and Inaction on Federal Threats
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California’s health care future is facing significant headwinds as Governor Newsom’s recently released January budget proposal for 2026-27 continues to implement damaging cuts and fails to adequately address looming threats from federal legislation. Advocates warn that the proposed budget jeopardizes coverage for millions,particularly within immigrant communities,and leaves the state vulnerable to the financial fallout of federal policy changes.
California health advocates entered 2026 already bracing for challenges, and the Governor’s proposal has intensified those concerns. The budget maintains cuts enacted last year and introduces new measures that critics say will exacerbate existing inequalities and destabilize the state’s health system. “This budget continues to put immigrant communities, Covered California enrollees, and our whole health care system at risk by delaying action,” a senior official stated.
Targeting Immigrant Communities with Deep Cuts
The most immediate impact of the budget proposal will be felt by california’s immigrant population. Instead of reversing course,the Governor’s plan doubles down on existing cuts,further restricting access to care. Thes cuts include:
- A continued freeze on Medi-Cal enrollment for undocumented Californians, which began January 1.
- The planned elimination of dental coverage for this population, scheduled for July 1, 2026.
- The implementation of a new $30/month Medi-Cal premium, starting July 1, 2027.
Beyond these established cuts, the budget introduces new barriers to care, including California-specific work reporting requirements – not mandated by federal law – that many immigrants will struggle to meet. Furthermore, the proposal rolls back years of precedent by limiting thorough Medi-Cal coverage for 200,000 legally present immigrants who are being removed from federal health care programs. These individuals will be relegated to “restricted scope” care, providing only emergency services and hindering their ability to manage chronic conditions or access preventative care.
Rising Costs for Covered California Enrollees
Millions of Californians are already experiencing the financial strain of increasing health care premiums,a trend exacerbated by inaction in Congress. While the budget allocates $190 million to affordability assistance for Covered California enrollees, advocates argue this amount is insufficient to offset the billions in federal funding losses anticipated. Enrollment in Covered California has already decreased by 30% compared to this time last year, signaling a growing affordability crisis.
Refusal to Pursue new Revenue Streams
A central criticism of the Governor’s budget is its failure to identify new revenue sources to address the impending multi-billion-dollar budget gap created by federal health care cuts. medi-Cal, which covers 15 million Californians – roughly one-third of the state’s population – is particularly vulnerable. The lack of a proactive revenue strategy, critics say, will inevitably lead to millions more uninsured Californians and increased costs for everyone.
The source of these federal cuts is traced back to the Trump Management’s H.R.1 legislation, which provided ample tax breaks to wealthy corporations and individuals at the expense of health care funding. “Meanwhile, the Trump Administration’s H.R. 1 gave massive tax breaks to the wealthiest corporations and individuals at the expense of health care for the rest of us,” one analyst noted.
California lawmakers now face a critical decision: address the looming fiscal crisis with bold action, potentially by requiring corporations to pay their fair share, or risk the collapse of the state’s health care system.
California lawmakers must act now to prevent coverage losses and shore up our health care system from H.R. 1 cuts. Advocates are preparing to take the #FightForOurHealth to the State Capitol.
