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California Gov. Gavin Newsom has signed a $2.8B bailout to rescue the state’s Medi-Cal program, which has been overwhelmed by a surge in enrollment—including more than 1.6 million illegal immigrants now covered under the taxpayer-funded healthcare initiative. 

$2.8B Bailout to Stabilize Overwhelmed Medicaid Program

The funding is intended to keep the program afloat through June, amid a $6.2 billion shortfall that has widened California’s overall budget deficit.

The governor's office confirmed the move on Monday, noting that the funds come from a larger $3.4 billion loan request Newsom submitted last month to cover Medi-Cal’s ballooning expenses. The program now serves roughly 15 million Californians.

Republican leaders have sharply criticized the bailout, pointing to the inclusion of noncitizens as a key factor in Medi-Cal’s unsustainable growth.

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Republican Lawmakers Slam Unsustainable Spending

 “Meanwhile, healthcare access is plummeting. Wait times are growing. Democrats have made their choice: legal residents come second,” said California Senate Minority Leader Brian Jones on X. “We must stop new enrollments of illegal immigrants and rein in this unsustainable program before it collapses entirely.”

GOP lawmakers on Capitol Hill are pushing for federal cuts as well—proposing to slash $880 billion from Medicaid over the next decade to control what they describe as reckless government spending.

Soaring Costs and Policy Questions

Originally projected to cost just under $6 billion for the fiscal year 2024–2025, the cost of covering undocumented immigrants has ballooned to $8.4 billion this year and is expected to be $7.4 billion in 2025–2026, according to Newsom’s latest budget proposal.

The expansion has fueled debates nationwide over whether undocumented immigrants should qualify for Medicaid-style benefits funded by American taxpayers. Progressive figures like Sen. Bernie Sanders (I-VT) and Sen. Adam Schiff (D-CA) have notably avoided taking a firm stance.