Telepeer

Newsom finally starts tackling Medi-Cal cuts

June 3, 2025

California once again faces a hefty budget deficit, with the May budget revision pointing to shortfall of $12 billion. That’s not as challenging as recent deficits which had hit more than triple that number in January 2024, but it’s still a challenge. In 2022, California enjoyed an astounding $97.5-billion surplus, but proceeded to spend the extra cash rather than prepare for the inevitable bad news.

True to form, Gov. Gavin Newsom has blamed the Trump administration: “California is under assault … because we have a president that’s been reckless in terms of assaulting those growth engines and has created a climate of deep uncertainty.” He’s not wrong that tariffs and the resulting economic uncertainty are causing financial jitters that impact our state’s budget, but the main blame falls squarely on our state’s profligate spending.

His latest budget document notes that costs for Medi-Cal—the state’s healthcare program for low-income people—have soared from $17.1 billion to $37.6 billion in a decade. The administration is being forthright about the causes: “implementation of major policy changes such as the full elimination of the asset test for older adults and the full-scope expansion to all income-eligible Californians.”

Newsom wants to reinstate the asset test, which limits eligibility for Medi-Cal and In-Home Supportive Services to those with assets less than $2,000 or $3,000 for a couple. Activists are upset—and so, too, understandably are many destitute people—but this would only return the status quo to where it was last year, when the asset test was removed.

One can make a reasonable case for a higher asset limit, but removing it opened the system to abuse. This is a safety-net program, not a “de facto free” healthcare system. Furthermore, Newsom wants to scale back Medi-Cal for illegal immigrants. That never was a sensible move for fiscal and other reasons.

As always, California lawmakers eagerly expand social programs, then seem shocked when the costs lead to a deficit. Newsom is doing what he needs to do given the deficit. But it really is a problem of his own making.

Orange County Register

News Details

Newsom finally starts tackling Medi-Cal cuts

Leave a Reply Cancel reply

News

CONTACT INFO

QUICK LINKS

SERVICES

CURRENT NEWS