SACRAMENTO, California — On health care – as with most issues – Gavin Newsom has positioned himself as Donald Trump’s chief antagonist, expanding access to insurance and deriding the red tape the president and Republicans in Congress have wrapped around treatment.
But new eligibility rules Trump imposed on Medicaid patients put the California governor in a bind.
California provides health care for 1.7 million undocumented immigrants not impacted by an upcoming federal requirement that Americans prove they’re employed or meet other criteria to remain enrolled in the government’s free health care program.
That left Newsom with a choice: Follow the president’s lead or have a two-tiered system, in which citizens must prove they’re working but undocumented immigrants do not.
Newsom chose equity, albeit quietly. Buried in a state budget plan, he included plans to impose the same work requirements on all recipients of Medi-Cal, the state’s Medicaid program, including immigrants living in the country illegally.
The decision marked a reversal for Newsom, a likely 2028 presidential contender who has been a vocal critic of Medicaid work requirements in the months since Trump approved them. A reflection of both California’s budget woes and the fraught national climate around immigration, the move was another step back in a retreat by a governor who, in his final year in office, has rolled back gains he made over two terms expanding health care coverage regardless of a person’s immigration status.
Newsom declined to be interviewed for this article and his staff did not provide responses to written questions submitted by POLITICO. In a statement, Michelle Baass, director of the state Department of Health Care Services, cast the governor’s decision as rooted in fairness, saying, “This decision ensures that program requirements are implemented uniformly for all eligible populations.”
Nonetheless, getting in lock-step with Trump on work requirements has irked lawmakers in a Capitol where Democrats enjoy a supermajority and antipathy for the president runs deep.
When she first saw the work requirements in the budget proposal, Assemblymember Mia Bonta said “it hurt my heart to be honest with you.”
Bonta, who chairs the Assembly health committee, said that work requirements are part of a strategy to lower costs by keeping eligible people out of the program. She introduced a bill in February that would block the governor from implementing them in the undocumented program.
“We are not living true to the values of California in our health care for all which we fought so hard to be able to get,” Bonta said.
But given his national aspirations, said Mike Madrid, a Republican strategist who was a co-founder of the anti-Trump Lincoln Project, Newsom had no choice. The governor’s earlier push to expand Medi-Cal to include undocumented immigrants was already going to be a liability for a candidate trying to sell himself to a national electorate, and forgoing work requirements would have made things worse, Madrid said.
“Not only is Gavin Newsom giving health care to the undocumented, he's also saying they don't have to prove that they're working to do it? The ad writes itself,” Madrid said. “That’s a death knell. You can’t do that and be president.”
The federal work requirements were written into the sweeping spending and policy law Trump signed last summer. Beginning in 2027, Medicaid enrollees between 19 and 64 will have to prove they spend at least 80 hours each month working, studying, volunteering or doing other approved activities. The rules include a long list of exemptions for parents, former foster youth, pregnant women and others.
States are barred from using federal dollars to provide Medicaid to anyone with “unsatisfactory immigration status,” which includes both undocumented and some documented immigrants. To get around that prohibition California essentially created a separate program for them and paid for it with state funds.
When the new federal requirements were announced, Newsom railed against them and other administrative hurdles in the law as an “attempt to dictate every move states make and micromanage Americans through even greater bureaucracy.”
But then in January Newsom included them in his budget proposal for the state’s upcoming fiscal year, and Department of Finance Director Joseph Stephenshaw told reporters during the budget presentation that the state would be applying the work requirements uniformly.
To immigrant rights activists in the state, like Kiran Savage-Sagwan, the executive director of the California Pan Ethnic Health Network, Newsom is talking out of both sides of his mouth: Loudly criticizing Trump’s policies while furthering them.
“The state is going out of its way to impose Trump policies on this population,” Savage-Sagwan said. “Nobody is making us do this.”
Newsom’s decision to write work requirements into his budget plan was part of a larger effort to shrink a yawning deficit the governor estimates will be about $3 billion and the state’s independent analysts warn could be significantly larger.
The state expects to save hundreds of millions of dollars each year from the wave of people who are expected to lose eligibility for Medi-Cal because of the work requirements. In all, officials project as many as 1.4 million people could drop off the rolls because of them.
Nonetheless, state health officials say their primary goal is to keep people insured and point to ongoing efforts to automate enrollment and eligibility checks as much as possible in order to minimize the number of people dropped from Medi-Cal because they fail to properly fill out required paperwork.
A report on Medi-Cal from the independent Legislative Analyst’s Office noted that while the administration says it is applying work requirements to “maintain parity” across the program, they’ve acknowledged it will be harder for the state to verify that the undocumented population is working. Often working in cash-based industries and without social security numbers, the state will need to rely on information provided by those not legally permitted to work in the country.
Newsom’s decision on work requirements comes on the heels of other cost saving moves he made last year to address billions of dollars in Medi-Cal cost overruns that were due largely to the state’s decision to expand coverage to include undocumented immigrants.
In the current state budget Newsom hammered out with lawmakers last year, he insisted on eliminating dental benefits for undocumented immigrants, imposing a $30 monthly premium for them and barring any new undocumented adults from enrolling.
Immigrant advocates were quick to point out that while Newsom officials argue the work requirements were needed out of fairness, the cost-saving measures the governor imposed made Medi-Cal in California unequal as undocumented immigrants were cut off from services and handed a bill.
“They’ll be paying more for worse and more precarious coverage,” said Diana Douglas, the director of policy and advocacy at Health Access California, a group that advocates for expanding health coverage.
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