The State of Health Coverage in California: Progress, Disparities, and Policy Threats

Affordable health care is essential for every Californian to be healthy and thrive. Medi-Cal, California’s Medicaid program, provides free or low-cost coverage to more than one in three Californians, including children, pregnant individuals, seniors, and people with disabilities. For those who earn too much to qualify for Medi-Cal, Covered California — the state’s marketplace established through the Affordable Care Act (ACA) — helps individuals and families find affordable health coverage. And Medicare, the federal program for adults age 65 and older and some people with disabilities, provides critical coverage for many Californians as they age. Over 23 million Californians benefit from these programs and together, they form the backbone of California’s public health care system.

Over the past decade, California has made major progress towards lowering the uninsured rate, expanding health care access, and ensuring people can get affordable care. Yet persistent health disparities, especially among people of color and adults who remain uninsured, show there is more work to do. Now, this progress is at risk. The harmful Republican megabill, H.R. 1, enacts the largest health care cuts in US history, with more than $1 trillion cut from Medicaid, Medicare, and the ACA marketplace exchanges over the next decade, threatening to reduce health care access for millions of people across the state. State-level budget cuts will further reduce access to health care.

State policymakers should take meaningful action to protect progress that has been made towards universal health care coverage and minimize the harm to people’s access to health care from the federal and state cuts.

H.R. 1 and the Federal Budget

H.R. 1, the harmful Republican mega bill passed in July 2025, will deeply harm Californians by cutting funding for essential programs like health care, food assistance, and education.

See how California leaders can respond and protect vital supports.

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1. Nearly One-Third of Californians Under Age 65 Are Covered by Medi-Cal, But Federal Cuts Put Their Coverage at Risk

Medi-Cal provides free or low-cost health care to nearly one in three Californians under age 65 and it is one of California’s most effective tools for expanding health care access and advancing health equity. About half of all Medi-Cal enrollees are Latinx Californians, who are more likely to work in low-wage jobs without access to employer-sponsored insurance.

Medi-Cal ensures that millions of Californians can see a doctor, fill a prescription, or get behavioral health care when they need it. But new federal policy changes, enacted in Republican megabill H.R. 1, will make it harder for people to keep their health care coverage. The law sharply reduces federal funding for Medicaid — costing California an estimated $30 billion each year — and adds new eligibility and access restrictions that could cause many Californians to lose coverage.

For those not eligible for Medi-Cal, Covered California remains a vital source of affordable coverage. In 2025, nearly 2 million Californians purchased insurance through the marketplace, a record high. Yet these gains are also at risk. H.R.1 cuts support for the marketplace and fails to extend enhanced premium tax credits that have made coverage more affordable. Without federal action, health insurance premiums are projected to nearly double in 2026 for most enrollees.

2. Medi-Cal Works to Reduce Poverty — Continued Investments is the Way Forward, Not Cuts

California’s poverty rate continues to be among the highest in the nation, but Medi-Cal is an important and effective anti-poverty program. In a new way to measure poverty, the Health Inclusive Poverty Measure from the Census counts health care as a basic need and incorporates the benefits people receive from health insurance into their total resources captured under the Supplemental Poverty Measure, which includes earned cash and non-cash benefits from public support programs. Using this new measure, Medicaid and Medicare¹Medicare is a federal program that provides health insurance to people age 65 and older and to younger individuals with long-term disabilities. About 6.6 million Californians are enrolled in Medicare, including 1.6 million people who are dually eligible for both Medicare and Medi-Cal due to their age and income. were shown to be the second and third most impactful anti-poverty programs in the country, removing 21.8 million and 15.0 million people from poverty, respectively. In California specifically, the poverty rate using a 3-year average for 2022-2024 under the Supplemental Poverty Measure of 17.7% is significantly lower than the Health-Inclusive Poverty Measure at 18.8%, showing that Medi-Cal and Medicare help keep people out of poverty by providing critical health care.

The harmful Republican megabill, H.R. 1, puts California’s progress in reducing poverty and expanding health coverage at risk. The law could take away Medi-Cal from up to 3.4 million Californians, taking away essential coverage that keeps individuals and families healthy and financially stable. These cuts would further widen long-standing racial and economic inequities across the state. For example, about half of all Medi-Cal enrollees are Latinx Californians, who are more likely to work in low-wage jobs without access to employer-sponsored insurance. Without coverage, more people would face unaffordable medical bills, delay treatment, and fall deeper into economic hardship.

3. California’s Uninsured Rate Reached a New Historic Low in 2024, New Federal Law Threatens Progress

California has made substantial progress in expanding access to health coverage over the past decade. Key drivers of this success include the federal Affordable Care Act and more recent state initiatives, such as expanding full-scope Medi-Cal to all income-eligible Californians regardless of immigration status. As a result, the uninsured rate dropped to 5.9% in 2024, marking a new historic low. These gains reflect a major shift from a decade ago when over 17% of Californians lacked health coverage, underscoring the state’s commitment to improving health care access for all.

Although this progress is significant, recent state and federal budget cuts threaten to reverse gains made towards health care for all. Federal cuts from the harmful Republican megabill, administrative burdens from work requirements, and additional eligibility checks threaten to push millions of Californians off of their health care. State policymakers also made choices to limit the ability of immigrant Californians to access health care. State policymakers chose to freeze Medi-Cal enrollment for undocumented immigrants, impose a burdensome monthly premium for certain immigrant adults, and eliminate dental benefits for certain immigrants, all of which will reverse the historic progress California has made in lowering the uninsured rate.

4. Health Inequities Are Largest for American Indian and Alaska Native Californians

Despite the historic progress made in lowering the overall uninsured rate, significant racial disparities persist in California. American Indian and Alaska Native Californians faced the highest uninsured rate among all racial and ethnic groups in the state in 2024 at 10.2%, and they also faced the highest uninsured rate in 2023. These racial disparities in health coverage highlight the profound and enduring impact of racist policies and practices, which block Californians of color from equal access to health care. Addressing the racial disparities in health coverage requires targeted outreach and education efforts along with other antiracist policy actions to improve health and well-being for Californians of color.

Unfortunately, federal budget cuts from H.R. 1 — the harmful Republican megabill — and state budget cuts specifically target immigrants by restricting Medi-Cal and Children’s Health Insurance (CHIP) eligibility to a narrow group of immigrants and imposing costly and burdensome requirements on certain immigrants in California, respectively. These cuts, along with broader cuts to Medi-Cal, will worsen existing health disparities for racial and ethnic minorities.

5. Adults Are Most Likely to Be Uninsured, and Federal Cuts Could Push Even More Out of Coverage

While the overall uninsured rate in California hit a historic low in 2024 of 5.9%, adults ages 19-64 faced a much higher uninsured rate at 8.4%. Many adults work in low-wage jobs that do not offer employer-sponsored health coverage and even when coverage is available, the cost of insurance is often too high, according to research from the Kaiser Family Foundation. In addition, some adults also do not qualify for Medi-Cal or financial help through Covered California. As a result, many working-age adults are left without affordable health coverage. Meanwhile, the uninsured rate for older adults over 65 is much lower than the overall rate. This is largely due to the accessibility of Medicare, which provides health coverage for older adults and people with disabilities.

However, the harmful Republican megabill H.R. 1 undermines Medicare by restricting access for certain groups of immigrants and making health care and prescription drugs through the program less affordable. Additionally, H.R. 1 contains multiple provisions that will result in adults losing their health care. Administrative burdens like work requirements and increased eligibility checks for adults as well as new copayments on certain Medi-Cal services for low-income adults will likely result in millions of Californian adults — who are already the age group most likely to lack health insurance — losing coverage.

Looking Ahead, Policymakers Can Take Action to Protect Health Coverage

California has made tremendous progress toward securing health care access for all Californians. Achieving a historically low uninsured rate in 2024 is a testament to the sustained efforts of advocates and policymakers who have worked to make health for all a reality. However, disparities across racial and ethnic groups and age groups continue to persist, and that progress is gravely under threat. The cuts to health care in H.R.1, as well as the continued uncertainty of the enhanced premium tax credits, threaten to reverse over a decade of progress.

Given the magnitude of federal and state budget cuts to health care, California leaders should take meaningful steps to minimize the harm to people’s access to health care, especially in how they contend with implementing harmful federal policies like work requirements and more frequent eligibility checks. Key policy recommendations include:

• Avoid rushing the implementation of H.R. 1 and engage stakeholders early for an inclusive decision-making process. The state should take time to fully understand potential challenges and coordinate with counties, advocates, health care providers, and community organizations before implementing new federal requirements. Early engagement and inclusive decision-making processes can improve outcomes and prevent unintended loss of coverage.
• Communicate proactively, regularly, and effectively with Medi-Cal enrollees. The state should ensure that Medi-Cal enrollees receive accurate and accessible information in their preferred language about policy changes, including what steps they need to take to enroll in or maintain Medi-Cal coverage. The state should also partner with and invest in community health workers and community-based organizations that are trusted messengers in their communities to help reach more Medi-Cal members in culturally and linguistically appropriate ways.
• Strengthen Medi-Cal eligibility and enrollment systems. The state should invest in eligibility and enrollment infrastructure to make it easier for people to enroll in and keep their Medi-Cal coverage. This includes adding new data sources to increase auto-verifications and auto-renewing as many members as possible. Strengthening these systems will reduce coverage losses due to paperwork barriers and administrative errors, and will free up county resources to serve Medi-Cal members who must go through a manual process.
• Protect immigrants in state-funded Medi-Cal from new federal requirements. The state should ensure that Californians enrolled in state-funded Medi-Cal — including undocumented adults — are not subject to new federal work reporting or cost-sharing requirements. These Californians already face structural barriers and harmful state-level policies, including the enrollment freeze and monthly Medi-Cal premiums. Exempting them from additional access restrictions is essential to prevent further inequities in access to care.
• Set new cost-sharing requirements at the lowest possible level. Under H.R. 1, states must impose new mandatory cost-sharing for adults covered through the ACA’s Medicaid expansion who have incomes above 100% of the federal poverty level. States can charge between $1 and $35 per medical service, but only for certain services. The state should set these charges at the lowest level allowed by federal law to limit financial barriers that discourage people from seeking care and to protect access for low-income Californians.
• Use automation to protect coverage under work requirements. H.R. 1 requires states to implement work reporting requirements for certain adults in the ACA expansion population. The state should maximize the use of existing data systems to automatically identify and exempt individuals who clearly qualify, reducing the burden on both beneficiaries and counties. Automating this process will help prevent eligible Californians from losing coverage simply because they miss paperwork deadlines or cannot navigate new reporting requirements.

The State Department of Health Care Services estimates a funding loss close to $30 billion every year as a result of H.R. 1. This represents an existential threat to all of the progress California has made in expanding health coverage over the past decade. Such a shortfall will have ripple effects throughout the health care system — from reduced access to care for low-income families, to financial strain on hospitals, to higher premiums and cost-sharing for people who purchase coverage through Covered California.

Mitigating the harm of federal cuts is not enough. State leaders and agencies should work to preserve and, where possible, restore health coverage in the face of unprecedented loss of federal funding.

Addressing this budget challenge and ensuring Californians have access to affordable health care will require bold leadership and new, ongoing state revenue, particularly from corporations and wealthy individuals who will benefit the most from newly expanded federal tax breaks. Without revenue-raising efforts, the state will be forced to make even deeper, more painful cuts to Medi-Cal, such as by reducing benefits, limiting provider payments, or restricting eligibility. These should all be a last resort rather than a first response.