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Gov. Gavin Newsom said Friday that as many as 3.4 million Californians could lose their state’s Medi-Cal health insurance under a budget bill that passes the US Senate.
Newsom said the proposal to cut healthcare in “One Big Beautiful Bill,” the basis of President Trump’s second term agenda, could force the closure of struggling rural hospitals, reduce government food aid for those in need, and drive premiums for those relying on the health insurance market for California’s Affordable Care Act.
“This is devastating,” Newsom said. “I know that this word is often overused in this series of jobs, but in many ways it’s an understatement of how reckless, cruel and damaging it is.”
Medicaid offers health insurance for about one in every five Americans, and generally uses income rather than employment as a condition for registration.
More than a third of the state, about 15 million Californians, are in Medi-Cal, the state version of Medicaid, some of the highest percentages in rural counties that supported Trump in the November election. More than half of California children receive medical compensation through Medi-Cal.
The Senate is still debating a version of the bill. However, in the current version, many Medicaid recipients must prove they work every six months, volunteer, or attend school at least 80 hours a month. State must set up a work eligibility verification system by the end of 2026 shortly after the medium term election. States that do not set up these systems could lose federal Medicaid funds.
Republican House Speaker Mike Johnson told reporters last month that the policy was to contribute to poor Americans and “encourage work dignity to return to younger men who need to work instead of playing video games all day.”
The nonpartisan Congressional Budget Office estimated this month that the requirement cut around $344 billion in Medicaid spending over a decade, with an additional 4.8 million people not insured.
Health policy experts warn that job requirements can lead to qualified people, but they can’t prove it and lose profits.
Newsom said 5.1 million people in California need to experience the progress of job verification, with about a third saying the requirement is “highly likely.”
The other two thirds “go through the maze of physical verification,” Newsom said.
He said that 3 million people in California could lose coverage through new Medicaid work requirements, and that if they need to re-validate their eligibility every six months, more than 400,000 people could lose insurance. Newsom said the state’s estimates are based on the number of people who dropped Medicaid in New Hampshire and Arkansas after those states temporarily implemented their own work requirements.
Last year, California became the country’s first state to provide healthcare to low-income, undocumented immigrants. The expansion, approved by Newsom and a democratically-led Congress, cost billions of dollars in the state and drew sharp criticism from Republicans.
James Gallagher, a minority leader who previously called for Newsom to return the report, said on social media Friday that Newsom and his democratic legislative leader had “eliminate” the health care system.
Newsom’s budget proposal in May proposed significant cuts to undocumented healthcare programs for immigrants, including a freeze on new registrations in 2026.
Lawmakers ultimately agreed to require undocumented immigrant adults ages 19 to 59 to pay a monthly premium of $30 starting in July 2027. Democrats agreed to cut full dental coverage for undocumented adult immigrants, but delayed the change until July 1, 2026.
In Congress, the GOP bill could also pose a serious threat to 16 struggling hospitals in 14 rural counties that received a $300 million lifeline on interest-free loans in 2023.
He said Republicans from California support rural California parts of Central Valley, including Rep. David Valadao (R-Hanford) and Kevin Killie (R-Locklin) and represent rural parts of California.
Some senators are pushing for changes to requirements that require states to freeze and cut through half of the taxes imposed on Medicaid providers, cutting funding sources for rural hospitals.
Michelle Bath, director of the California Department of Health Care Services, said the change could be “fatal to many rural and important hospitals already in financial tension.”
Newsom said the cuts could threaten California’s progress in reducing the share of residents without health insurance. This is about 6.4%.
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