California Governor Gavin Newsom has signed the 2026–27 state budget, securing a temporary reprieve for millions of residents by delaying significant cuts to the Medi-Cal program. The budget agreement, finalized after negotiations with legislative leaders, preserves access to essential health services for immigrant communities and asylees, though advocates warn that these protections remain short-term and subject to future policy shifts.
The state’s decision to delay these fiscal adjustments follows intense pressure from the #Health4All coalition, a group of labor, health, and immigrant rights organizations. According to the California Department of Health Care Services, the budget package includes specific provisions to maintain health care continuity, including a 12-month delay for dental care cuts affecting individuals with unsatisfactory immigration status (UIS). These measures are designed to avoid immediate disruptions to care while the state manages a complex budgetary environment.
Specific Protections and Policy Delays
The finalized budget includes several key protections for immigrant Californians that were previously at risk. Among the most significant changes is the delay until July 1, 2027, of a policy that would have moved asylees, human trafficking victims, and domestic violence survivors from full-scope to restricted-scope Medi-Cal coverage. By pushing this deadline back, the state ensures that these vulnerable populations maintain their current level of access for the upcoming fiscal year.
Furthermore, the state has prevented a planned increase in monthly premiums for Medi-Cal enrollees with UIS. While the Governor’s initial proposal suggested raising these premiums to $50 per month, the final agreement maintains the current $30 rate for the next year. Decisions regarding potential future increases will fall to the next gubernatorial administration. Additionally, the budget delays the reduction of the Medi-Cal asset limit, which will now only decrease to $21,000 per person on July 1, 2027, rather than the more restrictive $2,000 limit that had been under consideration.
Transitioning Two Million Enrollees
A major component of the 2026–27 budget involves a shift in how care is delivered for approximately 2 million Californians with UIS. To comply with new federal directives, these individuals will transition from managed care plans to a fee-for-service Medi-Cal model. The state has allocated $39 million to facilitate this transition, aiming to ensure patients can retain their current providers and continue receiving essential wraparound services.
According to data from the Department of Health Care Services, this transition may be mitigated by the existing provider landscape, as roughly 79% of medical professionals currently serving undocumented immigrants already accept fee-for-service Medi-Cal. Despite this, advocates emphasize that the transition process requires rigorous oversight to prevent gaps in coverage. The state remains under federal mandates regarding work requirements for undocumented enrollees, which continues to be a point of friction for health equity advocates.
Advocacy and the Path Forward
Health care advocates involved in the negotiations have expressed a mix of relief and ongoing concern. Rachel Linn Gish, Interim Deputy Director at Health Access California, stated that while the agreement allows millions of Californians to maintain access to medications and dental check-ups, it represents only a temporary measure. “This is only the beginning and we plan to keep up the fight to restore full access to care into next year and beyond,” Gish said.
Other leaders, including Masih Fouladi, Executive Director of the California Immigrant Policy Center, noted that while the budget preserves coverage for specific groups like refugees and asylees, the current Medi-Cal enrollment freeze remains a significant barrier for tens of thousands of undocumented residents. The coalition has signaled its intent to continue lobbying for the full reversal of these cuts, rather than relying on year-to-year delays that create uncertainty for families relying on the public health system. As the state moves toward the 2027 fiscal deadlines, the conversation surrounding long-term, sustainable funding for immigrant health care is expected to remain a central issue in the legislature.
The next legislative checkpoint for these programs will arrive as the state prepares its 2027–28 budget proposal, at which point the status of the delayed cuts will be revisited. Residents are encouraged to monitor updates from the Department of Health Care Services for official guidance on enrollment and benefit changes as they are implemented.