The cost of providing Medi-Cal to each illegal immigrant beneficiary is rising 10-15% per year, according to a new report from the state-funded Legislative Analyst’s Office.
This means even if California Gov. Gavin Newsom’s proposal to stop new enrollment in Medi-Cal by illegal immigrants in 2026 is adopted, costs for the program’s existing approximately 1.7 million illegal immigrants will likely continue to rise, as reflected in the governor’s May budget revision.
“Growth in spending for the undocumented expansion population appears to be a key (but not the only) reason for the higher per-enrollee spending [for Medi-Cal as a whole],” wrote the LAO. “The May Revision estimates General Fund spending for this population to be $10.8 billion in 2025-26, up nearly 50 percent from the Governor’s budget level. (This estimate includes costs in the In-Home Supportive Services program for this population.)”
Rising costs have already forced Newsom to request $6.4 billion in bailouts for Medi-Cal this year. IHSS, under which individuals are paid minimum wage to provide at-home care such as cooking or cleaning for elderly or disabled low-income household members enrolled in Medi-Cal, “employs” nearly one million Californians, and is currently open to illegal immigrants. While overall and private sector employment fell in March, taxpayer-funded jobs continued to grow, half of which were from new IHSS “providers.”
“Most of this upward revision appears to result from an around 30 percent increase in revised caseload (about 1.7 million enrollees total),” continued the LAO. “Per-enrollee spending for this population also is up around 10 percent to 15 percent in each year.”
Federal reimbursement rates for states for traditional Medicaid range between the statutory minimum of 50% and statutory maximum of 83%, limiting state costs for their taxpayer-financed health care programs. However, there is zero reimbursement for non-emergency and non-pregnancy illegal immigrant care. And should the new House budget bill pass, California could lose billions of dollars per year in other Medicaid reimbursements due to a provision penalizing states that enroll illegal immigrants in Medicaid.
Republicans say the governor’s enrollment growth “pause” obfuscates the fact that spending on illegal immigrants is still growing and places an undue burden on the state’s dwindling portion of net-taxpayers.
“The nonpartisan LAO report confirms what we’ve been warning about all along: Giving free healthcare to illegal immigrants is unsustainable and unfair to hardworking Californians,” said Senate Minority Leader Brian Jones, R-San Diego, to The Center Square. “Costs are skyrocketing, and now we’re staring down a $12 billion price tag for a program the Governor claims to be ‘pausing.’ This isn’t a pause, it’s a runaway train. And once again, California taxpayers are the ones stuck with the bill.”
