California Borrows $3.4 Billion to Cover Medi-Cal Budget Gap

To cover a budget gap in Medi-Cal — which provides health insurance for roughly 15 million disabled and low-income Californians — Gov. Gavin Newsom’s administration is borrowing $3.4 billion from the state’s general fund.

As CalMatters’ Ana B. Ibarra and Kristen Hwang explain, the move comes during a time when the state is facing a limited budget and potential cuts to the program from the federal government.

Republican legislators are attributing the Medi-Cal budget shortfall to the state’s expansion of the program over the years to immigrants regardless of their legal status, which began under Gov. Jerry Brown in 2016 when undocumented children were eligible to enroll in Medi-Cal.

About 1.6 million undocumented immigrants are enrolled in Medi-Cal, and expanding Medi-Cal to cover them costs around $8.5 billion a year.

• Senate GOP Leader Brian Jones of San Diego: “Democrats and the governor are … prioritizing people that have come into our country illegally over people who immigrated here legally, people that are citizens.”

Sen. Roger Niello, a Roseville Republican and vice chairperson of the budget committee, said that “the completely opaque nature of the request … is entirely inappropriate.”

H.D. Palmer, a spokesperson for the state’s finance department, acknowledged Medi-Cal spending has risen, in part, due to larger enrollment numbers from California’s undocumented population (a population that also contributes around $8.5 billion in taxes a year). But the Newsom administration argues that there are other reasons why Medi-Cal costs are rising, and that California is not the only state facing these issues.

The nonpartisan Legislative Analyst’s Office, for example, reported an increased number of seniors — who have comparatively more complex and expensive needs — enrolling in the program over the last four years.

Read more here.

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