California Approves $2.8 Billion Medicaid Bailout to Address Expanding Budget Shortfall

Governor Newsom's emergency funding measure seeks to sustain coverage for 15 million residents as the state faces a $6.2 billion Medicaid deficit.

Governor Gavin Newsom signed legislation on April 14, 2025, authorizing a $2.8 billion bailout to address California's Medicaid funding shortfall and maintain coverage through June.
The funding gap stems largely from cost overruns tied to last year's expansion of Medi-Cal to undocumented immigrants and other low-income adults, which exceeded enrollment projections.
California had previously taken out a $3.44 billion loan in March to cover immediate Medicaid obligations, marking the second major financial measure this year.
Republican lawmakers have criticized the inclusion of undocumented immigrants in Medi-Cal, arguing it has rendered the program unsustainable and calling for enrollment limits.
State officials warn that potential federal Medicaid funding cuts could exacerbate the crisis, forcing California to either cut coverage, limit enrollment, or increase taxes.