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Monthly Medi-Cal Premiums Strain Grocery Budgets

June 2026 | By Hannah Orbach-Mandel

Latin American family arriving home and unloading shopping bags from the car

No one should have to choose between groceries and health care. But that’s exactly the choice some immigrant Californians could soon face when monthly Medi-Cal premiums take effect in July 2027. This comes at a time when families are facing higher costs across the board, as energy prices pushed inflation to a three-year high of 4.2% in May 2026.

Last year, state policymakers approved imposing a $30 monthly Medi-Cal premium on certain immigrants — including undocumented Californians, lawful permanent residents during the federal five-year waiting period, and other immigrants who are excluded from federal benefits. Now, Governor Newsom is proposing to increase that premium to $50 per month. Unlike any other Medi-Cal recipients in the program’s history, these Californians will have to pay just to keep their coverage starting July 2027.

For families already struggling with high costs of living, a new monthly cost may mean people will be forced to decide: groceries or vital health care. The graphic below shows how stark that tradeoff is for California families across the state.

California leaders have better options than forcing families to make impossible choices. Policymakers can raise new, ongoing state revenue by closing tax loopholes and limiting costly corporate tax breaks instead of increasing health care costs for immigrant families.

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More than 300,000 eligible California children are enrolled in publicly funded child care, allowing parents with low incomes to work or attend school, while knowing their children have a safe place to learn and grow. In California, the Child Care and Development Fund (CCDF) is the main federal funding source. It makes up one in five dollars in the system. Federal funding has historically had bipartisan support. However, the Trump administration moved to suspend funding for five states in the name of “program integrity.” These federal actions — widely considered to be illegal and unsupported by evidence — undermine child development, family economic security, and local economies across all congressional districts in California.

Districts with a larger number of children enrolled in publicly funded child care include CA-52 (Vargas), CA-22 (Valadao), CA-43 (Waters), CA-6 (Bera), and CA-27 (Whitesides).

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CalFresh is California’s state version of the federal Supplemental Nutrition Assistance Program (SNAP), which provides modest monthly assistance to Californians with low incomes to purchase food, but the program has been significantly eroded by federal leaders.

In addition to the devastating funding cuts to food assistance and health care enacted by the 2025 Republican megabill, H.R. 1, the bill also imposes ineffective time limits on previously exempt groups receiving SNAP. Starting in June 2026, parents with a youngest child over 13, older adults, veterans, former foster youth, and people experiencing homelessness will all be subject to time limits that only allow three months of assistance over three years unless they are working 20 hours per week or qualify for an exemption.

SNAP time limits are grossly misaligned with the lived experience of those who are temporarily unemployed. Unemployment spells generally last six months — twice as long as the three-month time limit. As a result, many participants who already face significant barriers to work could lose their benefits even if they are actively looking for work.

State leaders should do everything they can to ensure that those who lose benefits due to ineffective time limits are still able to receive food assistance. Without the implementation of necessary protections, more Californians — many of whom already face systematic exclusion from economic security — could face further hardship.

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Safety Net

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Millions of Californians are struggling to make ends meet and the affordability crisis continues to drive up the cost of basic necessities like groceries and rent. Simultaneously, the 2025 Republican megabill — H.R.1 — is further straining the budgets of low-income households, by making unprecedented cuts to health care and food assistance, and giving out over a trillion dollars worth of tax breaks to the already wealthy and corporations.

The California Earned Income Tax Credit, the Young Child Tax Credit, and the Foster Youth Tax Credit help millions of Californians afford basic necessities, yet California spends much less on these vital programs than on tax expenditures for profitable corporations.

Specifically, under Governor Gavin Newsom’s budget proposal, the state is estimated to spend almost six times more on tax breaks for corporations than on state tax credits for low-income Californians during the 2026-27 fiscal year.

Expanding refundable tax credits and closing corporate tax breaks are common sense policies as the federal safety net is being weakened and corporations are showered with new federal handouts. Policymakers can support Californians in combating the state’s affordability challenges by closing the “water’s edge” loophole and placing reasonable limits on corporate tax credits and deductions so that no profitable corporation pays next to nothing in corporate taxes.

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Over 5.5 million Californians depend on CalFresh — California’s name for the Supplemental Nutrition Assistance Program (SNAP) — to put food on the table every month. CalFresh provides modest monthly food assistance and, as one of the few means-tested programs that reaches almost all low-income people, is the state’s most important anti-hunger tool.

In 2023, CalFresh was the most effective safety net program in boosting family resources, according to recent data. Over 850,000 more Californians would have been in poverty without CalFresh providing food assistance, which corresponds to a 2.3 percentage point increase in the poverty rate. Children across the state experienced an even larger reduction in poverty of nearly 4 percentage points as a result of CalFresh.

The latest data continue to show that poverty — and hunger — are policy choices. Recent federal inaction by the US Department of Agriculture to fund November 2025 SNAP benefits defies long-standing practice and threatens to increase hunger for millions of families. Policymakers have the tools to ensure that no one goes hungry in the world’s fourth largest economy. Even brief periods of hunger can have devastating effects on people, particularly children, which is why policymakers should boost investments to strengthen CalFresh and help all Californians meet their most basic needs.

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Medi-Cal, California’s Medicaid program, saves lives. It’s a lifeline that provides free or low-cost health coverage to over one-third of the state’s population — including children, pregnant individuals, seniors, and people with disabilities. 

Cutting Medi-Cal funding would mean taking critical care away from residents who need it the most in every congressional district. Without access to health coverage, Californians will face impossible choices that put their health and economic security at risk while also driving up long-term costs for the state. 

This table shows how many people in each congressional district rely on Medi-Cal, how many adults could lose coverage due to work requirements, and the level of Medi-Cal spending per district that fuels jobs and local economies.

For more on how federal cuts could affect nutrition assistance and other essential supports, see our report How Republican-Led Budget Cuts Could Impact Californians in Every Congressional District.

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Californians and their communities are facing many ongoing challenges, including skyrocketing housing costs, families’ urgent need for affordable child care, and workers’ wages that aren’t keeping up with rising living costs. Fortunately, when state leaders addressed a $55 billion shortfall in the 2024-25 budget, they avoided many deep and harmful cuts that would have jeopardized Californians’ well being. However, their failure to permanently raise significant additional state revenue will limit their ability to protect progress from the emerging federal threats and meet the ongoing needs of Californians.

California spends tens of billions of dollars each year on tax breaks, some of the largest of which benefit the wealthy and profitable corporations. These tax breaks take billions of dollars away from communities, while perpetuating racial income and wealth gaps. Yet the ongoing revenue increases in the 2024-25 budget from reducing tax breaks amounted to just 0.2% of all budget “solutions” to close the shortfall. This year, the governor proposes tax policies that, when taken together, would raise a modest amount of revenue on net in 2025-26 but in future years would likely result in a net revenue loss or a roughly offsetting revenue impact.

With looming threats of deep federal funding cuts from the Trump administration and Congress, and the human, economic, and fiscal impacts of the Southern California wildfires adding to the list of challenges facing Californians, state leaders should act boldly by raising revenues — including eliminating tax breaks for the wealthy and profitable corporations — and investing in programs that help all Californians thrive. The budget should reflect the promise of the California dream — ensuring every California family has access to food, a safe and affordable place to live, quality child care, and economic security.

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Everyone wants to live in safe communities, and data show California continues to experience crime rates well below historical peaks. The property crime rate — the number of property crimes per 100,000 residents — was 2,273 in 2023, far below the peak of 6,881 in 1980. The violent crime rate was 511 per 100,000 in 2023, less than half the 1992 peak of 1,104.

Crime rates have ticked up in the wake of the COVID-19 pandemic. Any rise in crime is concerning, but state leaders should avoid overreacting as crime rates remain at historic lows in California. Moreover, voters should be skeptical of efforts to use the ballot box to roll back justice system reforms by reinstating the costly and ineffective mass incarceration policies of the past.

Instead of resurrecting failed, incarceration-focused approaches, state leaders must advance strategies to reduce youth violence, strengthen families and communities, and target the longstanding structural barriers to opportunity — such as poverty and housing instability — that disproportionately impact Black, Latinx, and other Californians of color.

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