California’s immigrants may pay the price if Medicaid funding is cut

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The Weekly Dispatch

Community-powered immigration news from the Bay Area.

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Welcome to El Tímpano’s Weekly Dispatch. I’m Erica Hellerstein, senior immigration, labor and economics reporter.

This week, we’re digging into the GOP’s latest budget proposal and what it could mean for tens of thousands of our community members here in the East Bay. Last week, House Republicans passed a sweeping federal budget plan that would slash trillions in spending over the next decade. While granular details about the budget are still murky, one thing is clear: Medicaid—the program that provides health coverage to tens of millions of low-income Americans—looks like it is headed for the chopping block. The proposal directs the Energy and Commerce Committee (which oversees Medicaid) to come up with a staggering $880 billion in cuts over ten years, a figure that accounts for 44% of the budget’s proposed spending reductions.

Some Republicans have tried to sidestep questions about Medicaid, arguing that the budget doesn’t explicitly call for cuts to the program. That’s technically true, but ignores the reality of balancing a budget. As The New York Times put it: “The trouble is that the math of the Republican budget plan requires major cuts to the Medicaid program.” In other words, slashing that much funding would almost certainly mean reducing Medicaid coverage, and that has major implications for California, especially for immigrants.

How would this impact California?

California has the largest Medicaid program in the country, Medi-Cal, which covers nearly 15 million people statewide, or more than a third of the state’s population. And crucially, the state has spent the past decade expanding Medi-Cal to cover all low-income residents who qualify regardless of immigration status. That’s thanks to a 2015 law—funded entirely by the state of California—that began incrementally extending insurance coverage to undocumented residents and now covers immigrants of all ages who are eligible.

This expansion has had a major impact. As of November 2024, according to the California Department of Health Care Services, more than 1.6 million undocumented immigrants gained coverage under this expansion, including 66,200 people in Alameda County, more than 31,500 in San Francisco County, and more than 34,700 in Contra Costa County, totalling more than 132,400 new Medi-Cal recipients in those three Bay Area counties alone.

Research shows that extending this coverage to once uninsured Californians has made a tangible difference. Studies from the California Budget & Policy Center and the Public Policy Institute of California found that expanding Medi-Cal to undocumented residents has improved health outcomes and is expected to reduce poverty rates among undocumented immigrants.

The risk ahead

If the House budget moves forward, it could seriously strain California’s ability to continue funding the expansion at its current levels. By some estimates, the state could lose anywhere from $10 billion to $20 billion annually in federal funding under the current proposal. Since 60% of Medi-Cal’s $161 billion budget is federally funded, such a steep cut would leave a massive hole in the state’s budget. To make up for the shortfall, state lawmakers would likely have to make painful cuts to state safety net programs, including possibly scaling back Medi-Cal’s expansion for undocumented residents, which costs the state around $2 billion per year.

As Adriana Ramos-Yamamoto, a Senior Policy Analyst at the California Budget & Policy Center, told me, this is a real risk: California doesn’t “currently have the revenue available to offset those cuts,” she explained. “It could mean that state leaders might roll back the recent Medi-Cal expansion to undocumented Californians.” If that happens, tens of thousands of immigrants in the Bay Area alone could lose this critical lifeline. “We know that Medi-Cal saves lives,” Ramos-Yamamoto continued. “Without access to that health coverage, people would face really impossible choices that put their health and economic security at risk.”

We’ll be tracking these budget negotiations closely, especially how they could impact safety net programs that millions of Californians rely on. If you have thoughts, reactions or personal experiences to share, I’d love to hear from you. You can reach me at ehellerstein@eltimpano.org.

That’s all for now—thanks for reading, and see you next week!

P.S.: A quick ask. For a future edition, I’m hoping to talk to local faith leaders about how immigration concerns are showing up inside their houses of worship. Do you know a pastor who might be open to speaking with me? Feel free to respond directly, or forward my email to anyone you think might be interested in sharing.

Ear to the Ground

El Tímpano’s text messaging (SMS) service reaches 5,600 Spanish-speaking immigrants across the Bay Area. Since the elections, many subscribers have expressed concerns and questions about potential cuts or the loss of Medi-Cal coverage for undocumented immigrants. Here are a few of their responses.

I am very afraid that they will change the laws and take away my Medi-Cal; I am very sick with my knees.

Yo estoy muy temerosa que cambien las leyes y me quiten mi Medi-Cal; yo estoy muy enferma de mis rodillas.

— Union City resident

Will we no longer have Medi-Cal? It would affect me because I have diabetes and need medication.

¿Ya no tendremos Medi-Cal? Me afectaría porque yo tengo diabetes y necesitó medicamentos.

— Oakland resident

• Taking stock of California’s sanctuary policies. In last week’s newsletter, we highlighted state GOP-led efforts to roll back California’s sanctuary protections and examined how the state’s top Democrats have largely remained quiet in response to President Trump’s renewed threats against sanctuary cities. This week, we’re sharing a deep dive from the Los Angeles Times into the state’s landmark sanctuary law, Senate Bill 54, which has now been in effect for seven years. The law, which began during the first Trump administration, made California the first state in the nation to decouple its law enforcement resources from the use of federal immigration enforcement. The legislation appears to have led to fewer ICE arrests in the state. For example, California’s share of ICE arrests dropped from 23% in 2013 to just 14% in 2017, according to the Migration Policy Institute. This shift has made the law a prime target for opponents, both at the state and federal levels.

• Litigation is already underway. San Francisco, Oakland and San Jose, among other cities, last week sued the Trump administration over its threats to withhold funding for sanctuary cities, the latest twist in a long legal saga between California and the Trump administration over the state and cities’ sanctuary policies. We’ll be following the deepening conflict between California’s state and local governments and the federal administration over sanctuary policies closely, so watch this space for more updates.

• San Diego tent encampment violating detention guidelines for migrant families. A massive tent facility in San Diego is holding migrant families for far longer than federal guidelines suggest, Bloomberg reports. U.S. Customs and Border Protection policy states that families with children shouldn’t be detained for more than 72 hours, but advocates say some are being held for ten days or more. A recent Senate Judiciary report warns that prolonged stays in detention centers put children at greater risk of harm, leaving them vulnerable to contracting illnesses and developing medical conditions.

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