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George Skelton: Newsom's dilemma after providing Medi-Cal to undocumented immigrants

George Skelton, Los Angeles Times on

Published in Op Eds

Gov. Gavin Newsom’s drive toward the political center has hit a jarring speed bump: He’s spending way over budget on health care for undocumented immigrants.

Let’s put this in perspective:

Newsom presumably has been repositioning himself to run for president in 2028 — less as a wild-eyed California liberal and more like a sensible moderate who can attract votes in swing states.

He wants, at the least, to be regarded and respected nationally as a top-tier presidential prospect.

But the two biggest policy issues Democrats whiffed on last year were inflatio — caused partly by federal government overspending — and an unsecured southern border that allowed countless immigrants to stream into the country illegally. MAGA Republicans said that one attraction for migrants was freebie benefits in liberal states such as California.

“Kamala Rolls Out Red Carpet for Illegals” was the banner on one Donald Trump campaign piece attacking Democrat Kamala Harris, whose vulnerable California political roots ran deep.

Newsom, in fact, bragged that California was a national trailblazer by becoming the first state to offer government health care to all low-income people, regardless of their immigrant status.

So one can only speculate how this would play with purple state voters across America — Newsom breaking the bank on health care for people living here illegally. My speculation: It’d play like a ballplayer being caught off base.

It would fit nicely into many Americans’ stereotype of a modern California governor: the leader of a radical, lefty, out-of-control state.

Of course, Newsom could be rescued politically by President Donald Trump and the Republican Congress if they foolishly whack Medicaid health care for the poor and scale back Medicare for seniors in order to provide tax cuts for the wealthiest Americans. That could overshadow Newsom’s overspending on Medi-Cal for undocumented immigrants.

Medi-Cal is our version of federal Medicaid. It provides health care for roughly 15 million Californians, 38% of the state’s population and half the children.

California began phasing in Medi-Cal for undocumented immigrants 10 years ago when then-Gov. Jerry Brown signed legislation covering children. Under Newsom, seniors were the next to gain coverage. And undocumented people of all ages — an estimated 1.8 million — were included last year.

It shouldn’t be stunning that the state government failed to plan adequately for the Medi-Cal expansion. Budget writers last June pegged the cost at $6.4 billion. By January, overall Medi-Cal costs had greatly exceeded the initial projection, prompting Newsom to borrow $3.4 billion to pay bills through this month.

Recently, the governor asked the Legislature for an additional $2.8 billion to cover Medi-Cal spending through June. Of the total $6.2 billion in extra costs, the administration has refused to make public how much is for undocumented health care.

The Newsom administration offered several excuses for the shortfall: More people signed up for Medi-Cal than expected. Pharmacy costs rose. Medical costs rose generally across the country. But none of that is really convincing. Experts should have anticipated.

There’s always some rationale for red ink spending in Sacramento.

I suspect the governor — and probably the Legislature — cooked the numbers last year to show a “balanced” budget on paper. Shock, shock. That’s an age-old custom in the state Capitol.

“They always cook the numbers,” says former Assembly speaker and Los Angeles Mayor Antonio Villaraigosa, who’s running to succeed the termed-out governor next year.

 

“Every [state] finance person does it. But there’s got to be a limit. At the end of the day, you can cook them so much they’re not real.”

So, Newsom and the Legislature face a tough task crafting a budget for the next fiscal year that begins July 1.

They could cut Medi-Cal services for all beneficiaries. Or they could reduce care just for undocumented immigrant — maybe lop them off the plan entirely. That doesn’t seem like anything Democrats would embrace.

They could tighten eligibility, reducing the number of beneficiaries. They could add co-pays. Or pare back provider reimbursement rates — already so low that many physicians refuse to accept Medi-Cal patients. Forget it.

They could cut other state programs to help pay for Medi-Cal — perhaps a logical move, but it would evoke screams.

Or they could raise taxes. A nonstarter.

There are always budgeting gimmicks — borrowing, backfilling from other funds, kicking the can down the road.

What they’ll most likely do: Recook the numbers.

Medi-Cal funding is particularly problematic because of the way it works. The federal government matches state spending for legal residents, but not for undocumented people except in emergencies. The state is mostly on its own providing care for undocumented patients.

Paying for everyone else — roughly 13 million people — Newsom and the Legislature now are at the mercy of Trump and the GOP-controlled Congress.

Moving toward the center, Newsom avoided lots of political grief last year by vetoing three bills the Legislature passed to help undocumented immigrants.

The most contentious would have allowed them to apply for interest-free home loans of up to $150,000 if they were first-time homebuyers. There wasn’t even enough money in the existing pot to aid citizens, Newsom noted in his veto message.

A second vetoed bill would have paved the way for undocumented workers to receive unemployment benefits. A third would have required public universities and community colleges to hire undocumented students for campus jobs.

If Newsom had signed those measures, he certainly would have loudly heard about it on any presidential campaign trail.

Right now, Trump and Congress could whack Medicaid and give Newsom a solid rationale for cutting way back on health care for undocumented Californians. That would be lousy, hurtful policy.

But whatever happens, hopefully the governor will use uncooked numbers this time.


©2025 Los Angeles Times. Visit at latimes.com. Distributed by Tribune Content Agency, LLC.

 

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