California Faces $3.44 Billion Medi-Cal Shortfall as Healthcare Costs Surge

The state seeks a maximum loan to cover its Medicaid program, with critics pointing to expanded coverage for undocumented residents as a key factor.

California's Department of Finance has approved a $3.44 billion loan to address a shortfall in Medi-Cal, the state's Medicaid program, through the end of March.
The shortfall follows the state's 2024 expansion of Medi-Cal to include undocumented residents, which has significantly increased costs beyond initial estimates.
Critics argue that the expanded program places an undue financial burden on taxpayers, while state officials maintain rising Medicaid costs are a nationwide issue.
The Newsom administration highlighted that other states, regardless of political alignment, are also grappling with escalating Medicaid expenses.
The $3.44 billion loan represents the maximum borrowing allowed by law and underscores California's struggle to fund its ambitious healthcare initiatives.