By Paul Kiernan

LOS ANGELES -- Every Friday for the past two months, nonprofit workers armed with iPads and clipboards have fanned out in South Los Angeles looking for immigrants living in the U.S. unlawfully. Their goal: Sign them up for the state's Medicaid program before the end of the year.

The program, called Medi-Cal, will stop accepting adults with what the government calls "unsatisfactory" immigration status. Medi-Cal will require such immigrants who already are in the program to pay a $30 monthly premium to keep their health coverage starting in mid-2027.

It is a striking policy U-turn for Democratic California Gov. Gavin Newsom, who championed extending government-supported healthcare to all low-income Californians -- regardless of their immigration status -- as core to the state's economic and moral identity.

"We are implementing our ideals," Newsom said in a 2022 speech, adding that expanding access to preventive care would save money by diverting people from costly emergency- room visits.

People rushed into the program, and costs soared. Medi-Cal has played a role in deepening California's budget hole. The state is now trying to wind down a multiyear policy experiment that has outraged many conservatives by extending comprehensive health coverage to an estimated 1.7 million people living in the country unlawfully.

"The Governor and Legislature made a fiscally necessary decision that ultimately helps preserve the long-term viability of Medi-Cal," said Marissa Saldivar, a spokeswoman for Newsom.

Medicaid is a low-income health program paid for by the federal government and states. Adult immigrants in most of the U.S. can only qualify when they fall into special categories -- including refugees and people granted asylum -- or after they have held green cards for at least five years.

But the federal government doesn't cover most Medicaid spending for immigrants in the U.S. unlawfully. So California taxpayers had to foot the bill for the state's expansion, and a lot more people signed up than expected.

"We warned him," said Brian W. Jones, the Republican minority leader in the state Senate, in May after Newsom announced the coming enrollment freeze. Jones said the expansion gave priority to immigrants "over our own citizens who are already struggling to afford their own healthcare."

The cost of Medi-Cal coverage for adults with "unsatisfactory immigration status" ballooned to a projected $12.5 billion for the current fiscal year, the state's Department of Finance says. Overall Medi-Cal spending is projected to reach $197 billion, up from $104 billion in the fiscal year ended mid-2019, before Newsom gradually began expanding immigrants' eligibility between 2020 and 2024.

Meanwhile, California's nonpartisan Legislative Analyst Office projected that general-fund expenses will exceed revenue by 4.3%, or $9.6 billion, in the current fiscal year, and 11% in the next year. The budget difficulties have raised red flags since they are coming in a time of economic growth, and as the artificial-intelligence boom lifts compensation for California's tech workers, boosting income taxes.

"It would be risky to assume these trends just continue," said Gabriel Petek, the state legislative analyst, regarding tax collections.

Freezing Medicaid eligibility won't fix California's budget, but is part of the belt tightening. Petek's office estimated last month that the new rules will drive about one million immigrants off Medi-Cal's rolls through mid-2030, saving the state $10.6 billion.

Other states led by elected Democrats are also rolling back health coverage for immigrants in the U.S. unlawfully because of mounting costs and broader Medicaid cuts in the tax-and-spending bill signed by President Trump this year. California's changes also come as Newsom weighs a 2028 presidential bid in which free healthcare for immigrants could pose a liability with national voters.

Because the final stage of the Medi-Cal expansion was completed less than two years ago, researchers have had little time to study its full effect. But healthcare providers say rolling back coverage will lead to more health problems, such as spreading of communicable diseases or untreated chronic conditions that can knock workers out of the labor force.

Jim Mangia, president of St. John's Community Health in South Los Angeles, said he has seen less emergency-room use, better diabetes and blood-pressure management and fewer hospitalizations for asthma since Medi-Cal became more widely available. He thinks the acceleration in state costs would level off over time as new patients' health improved.

The Medi-Cal expansion, which St. John's had lobbied for, contributed to a more than doubling of the nonprofit provider's revenues between 2019 and 2024, according to tax filings. The higher revenues enabled St. John's to open more locations, hire more doctors and nurses and grow its street-medicine teams that serve homeless patients, Mangia said.

"When you have 25% of patients uninsured, and then they become insured, you can provide a lot more care," he said. St. John's last week filed paperwork to submit a ballot initiative that would ask Los Angeles County voters next year for a half-cent sales tax increase to help offset state and federal Medicaid cuts. They will need to collect about 400,000 signatures to get the measure on the ballot.

The social workers recruiting migrants to sign up for Medi-Cal before the deadline are employed by a charity, the Mayor's Fund for Los Angeles, which counts among its largest donors several health insurers and providers that receive Medicaid funding. The group is advised by Los Angeles Mayor Karen Bass, who said she was worried that a drop in health coverage will worsen homelessness.

In a press event this month, Bass, a Democrat, led a group of nonprofit executives and healthcare workers in chanting, "Don't delay, call today, " -- encouraging people to call the Mayor's Fund to sign up for health coverage. Bass said Medi-Cal was critical to keeping vulnerable people off the streets -- both by preventing giant medical bills and by keeping them healthy so they can work.

On a recent Friday morning, social workers Diana Nunez, Sonia Rosas and Stephanie Negrete made their way through an informal street market where they asked around in Spanish to see if people knew about the sign-up deadline. Vendors there were hawking shoes, used power tools and watches under tattered blue tarps.

By the end of the day, Nunez said, eight people had signed up.

Write to Paul Kiernan at paul.kiernan@wsj.com

(END) Dow Jones Newswires

December 20, 2025 22:00 ET (03:00 GMT)

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