Overview

• California has borrowed $3.4 billion from its general fund to cover Medi-Cal costs through March, with additional funding likely needed before the fiscal year ends in June.
• The state's Medi-Cal program, which serves nearly 15 million low-income residents, is facing higher-than-anticipated costs due to increased enrollment of seniors and undocumented immigrants, as well as rising prescription drug prices.
• State officials attribute $2.7 billion of the shortfall to the cost of newly enrolled undocumented immigrants, who became eligible for Medi-Cal under recent expansions to provide universal coverage.
• Republican lawmakers have criticized the expense of covering undocumented immigrants, while Democrats defend the program as essential and point to federal Medicaid cuts as a greater threat to state healthcare funding.
• California's Medi-Cal budget challenges are part of a larger national trend of rising Medicaid costs, with federal funding reductions potentially exacerbating the state's financial strain.