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Medicaid shortfall forces California to borrow $3.44B
SACRAMENTO, California — California will need to borrow $3.44 billion to close a budget gap in the state’s Medicaid program, Newsom administration officials told lawmakers Wednesday in a letter obtained by POLITICO.
That’s the maximum amount California can borrow, and will only be enough to cover bills for Medi-Cal — the state’s Medicaid program — through the end of the month, Department of Finance spokesperson H.D. Palmer separately told POLITICO.
The budget pressure will bring fresh scrutiny to the state’s coverage of undocumented immigrants, which is costing more than first budgeted.
Originally, the state estimated it would cost around $3 billion per year to insure that population. But one year after the program has been fully implemented, it’s turning out to be more expensive than anticipated.
Gov. Gavin Newsom’s current budget proposal estimates the state will shell out $8.4 billion to cover undocumented immigrants in Medi-Cal in 2024-2025, and $7.4 billion in 2025-2026.