California officials are bracing for more than 2 million residents under 65 to lose health coverage over four years after Congress passed the One Big Beautiful Bill Act and Gov. Gavin Newsom and Democratic lawmakers moved to manage Medi-Cal’s multibillion-dollar shortfall. For clinicians, that points to more uninsured patients, tougher eligibility churn, and rising uncompensated care as Medi-Cal — which covers 13.6 million Californians — tightens.

The Move

• California borrowed $3.4 billion in March 2025 to keep Medi-Cal paying doctors and hospitals, and later stretched repayment of the loan, which grew to $4.4 billion, over 10 years.

• The federal law is expected to cut Medicaid spending by more than $900 billion over a decade, largely through new work requirements and limits on state financing tools such as provider taxes.

• Researchers at the UC Berkeley Labor Center and UCLA Center for Health Policy Research estimate more than 2 million Californians under 65 could lose coverage; at least 730,000 have already disenrolled since June 2025.

Why it Matters for Care

• Clinicians should expect more patients to cycle on and off coverage because of paperwork, work-rule verification, premiums, and service fees.

• That means delayed specialty follow-up, more ED-based care, and greater pressure on safety-net hospitals and county systems already operating at capacity.

• Disability advocates warn new asset limits could make it harder for patients to qualify for home care, potentially shifting more people into institutional care.

Between the Lines

• California expanded Medi-Cal aggressively — including coverage regardless of immigration status and optional benefits such as physical therapy, hospice, and housing supports — while enrollment nearly doubled since 2010 and annual spending rose from $50 billion to $222 billion.

• Medi-Cal now accounts for more than 40% of state spending, leaving Sacramento squeezed between rising healthcare costs and shrinking federal flexibility.

• The political split is sharp: Republicans argue eligibility should narrow, while Democrats are trying to delay cuts and push the hardest decisions onto the next governor.

What to Watch

• State implementation of federal Medicaid work requirements for adults under 65, including how much verification can be automated to reduce erroneous disenrollment.

• 2027, when some delayed state cuts could take effect unless the next governor and legislature reverse them.

• 2028, when states must begin charging some enrollees fees for many services — a likely new point of coverage loss and care avoidance.

• The November governor’s race, where Xavier Becerra and Steve Hilton offer starkly different paths on eligibility, immigrant coverage, and whether to raise revenue or cut benefits.

Source: KFF Health News