By Brad Brooks
(Reuters) -California Governor Gavin Newsom on Wednesday announced a budget proposal to scale back a free healthcare program for low-income undocumented migrants, warning the state must brace for an expected $16 billion dent in state revenues from President Donald Trump’s tariffs.
The change formed part of Newsom’s budget presentation released on Wednesday. The governor’s office projected that sharply lower revenues after Trump’s tariffs would require the state “to take corrective action that balances fiscal responsibility while preserving core tenets of key investments.”
Trump’s administration has targeted immigrant-friendly policies in Democratic-dominated states, such as California, pressuring them to end benefits programs for undocumented migrants.
Newsom’s office said that the governor is calling for undocumented adults to pay $100 monthly premiums to receive Medi-Cal healthcare coverage. He also called to block all new adult applicants for the program starting on January 1, 2026. Coverage for children will not be affected by these changes, nor would “limited-scope coverage” of things like emergency and pregnancy services.
Those changes would save the state $5.4 billion through 2028-2029, the governor’s office said. The program providing free healthcare for all low-income migrants began on January 1, 2024.
The governor’s office said Newsom “remains committed to protecting the immigrant communities who contribute to the fabric and economy of California” but that curtailing the free healthcare program was unavoidable.
Newsom is expected to project a deficit for California in the year ahead, including higher-than-expected costs for the Medi-Cal healthcare program, an offshoot of the federal Medicaid program.
(Reporting by Brad Brooks in Colorado; Editing by Frank McGurty and David Gregorio)
