SACRAMENTO, CA — A new publication by the California Budget & Policy Center (Budget Center) highlights how proposed cuts to Medi-Cal would leave millions of Californians with fewer health care options, worsening health outcomes, and undermining quality of life across the state. At a time when many families are already facing high costs of living, reducing access to care would increase hardship and push more people to delay or forgo treatment.
The report comes in response to recent claims that much of California’s structural deficit is caused by soaring Medi-Cal costs. The Budget Center’s analysis finds this framing inaccurate and harmful, as it misrepresents the drivers of state spending and promotes cuts that would weaken Californians’ health and well-being and the economy.
As detailed in Understanding Recent Medi-Cal Spending in California, program costs largely track broader health care trends — including rising prices, increased use of services, demographic shifts, and high prescription drug costs — not excessive growth unique to Medi-Cal. At the same time, federal Medicaid cuts are shifting additional costs onto California without reducing the underlying price of care.
Framing Medi-Cal as the source of the deficit diverts attention from the real issue: a mismatch between the state’s revenues and the level of investment needed to meet Californians’ needs.
“Claims that Medi-Cal is driving California’s deficit risk leading policymakers in the wrong direction,” said Adriana Ramos-Yamamoto, senior policy fellow at the California Budget & Policy Center. “Medi-Cal is a critical investment in people’s health and in our state’s economy. Cutting it won’t fix the state’s long-term budget problem, but will increase long-term costs and leave Californians worse off.”
Medi-Cal provides coverage to more than one in three Californians with low incomes, including children, pregnant individuals, seniors, and people with disabilities. It also serves immigrants with humanitarian protections, many of whom are at risk of losing coverage under proposed policy changes, as outlined in Immigrants with Humanitarian Status at Risk of Losing Health Care in California.
“On top of the violence and terror of ICE, immigrant communities are now facing threats to their health care from the state that once promised to protect them,” said Kiran Savage-Sangwan, executive director of the California Pan-Ethnic Health Network (CPHEN), a multi-ethnic network that unites and builds power in diverse communities of color. “Medi-Cal is a lifeline for 200,000 refugees, asylees, and survivors of torture, trafficking, and domestic violence. Separating them from their doctors and therapists is unthinkably cruel, and fiscally reckless. Cuts to Medi-Cal eligibility, services, or access are unconscionable at a time when corporations are posting record profits and pocketing billions in unjustified tax breaks. California’s leaders must choose our communities over corporations.”
Reducing access to care leads people to delay treatment, often resulting in more serious and costly health conditions over time. These impacts not only harm individuals but also increase pressure on the state budget through higher emergency and uncompensated care costs. Cuts would also ripple through local economies. Medi-Cal funding supports health care providers, hospitals, pharmacies, and jobs across California. Reductions in coverage or services mean less funding in communities, leading to job losses and slower economic activity.
Previous Budget Center research reinforces that short-term cuts to health care lead to long-term costs. As highlighted in Short-Term Cuts, Long-Term Costs: Investing in Health Care for All Californians, disinvesting in care today increases future spending while worsening health outcomes.
Rather than pursuing harmful cuts, policymakers should point to more effective policy solutions: addressing health care cost growth, strengthening preventive and primary care, improving system efficiency, and identifying sustainable, equitable revenue sources to better align state resources with Californians’ needs.
Protecting Medi-Cal is essential to maintaining the health, financial stability, and well-being of Californians — and to ensuring the state’s long-term economic strength.
To view all the publications, visit www.calbudgetcenter.org/resources/.
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About the California Budget & Policy Center:
The California Budget & Policy Center (Budget Center) is a nonpartisan research and analysis nonprofit advancing public policies that expand opportunities and promote well-being for all Californians.
