Newsom Wants to Expand Medi-Cal to All Undocumented Immigrants by 2024. Advocates Say They Need It Sooner

California immigrant advocates applauded Gov. Gavin Newsom's budget proposal that would make this the first state in the nation to extend safety-net health care coverage to all residents, regardless of immigration status. But with a $97 billion surplus projected in the governor's May budget revision, they say it's time for state leaders to go even further to strengthen the social safety net for unauthorized immigrants, many of whom have played an essential role as frontline workers during the COVID-19 pandemic.

"The fact that we have such a huge surplus is because we have widening inequality, because the rich did so well," said Alexis Castro, government affairs director at the California Immigrant Policy Center, referring to the fact that much of the surplus revenue comes from income taxes on high earnings and capital gains from investments. "Can we use that to invest in those that were most impacted, that are at the front lines, that are really the backbone of our communities?"

But even with an unprecedented budget surplus, plans to further expand social programs will have to contend with a state spending limit approved by voters in 1979, along with uncertainty about where the state economy is headed and resistance from fiscal conservatives.

Since 2016, California has expanded Medi-Cal to undocumented children and, beginning this month, adults over age 50. Newsom's plan, first announced in January, would cover the last remaining group: roughly 700,000 undocumented adults, age 26 to 49, at a cost of $800 million next year and $2.7 billion in future years.

If the governor's Medi-Cal expansion is enacted, though, it won't take effect until 2024. Castro and other advocates want it in place sooner. They say the pandemic showed why everyone needs access to medical care, particularly the uninsured immigrants who grew, processed and distributed food, and who worked in construction, cleaning and child care through shelter-in-place orders.

A USC study last year of 2020 COVID-19 deaths in California found that working-age Latino immigrants were 11 times more likely to die from the disease than U.S.-born non-Hispanic adults.

Castro's group and others back a plan by Senate Democrats to spend an extra $1 billion to accelerate the Medi-Cal expansion to June 2023.

They also are endorsing Democrats' proposals to use the additional surplus in the following ways:

• $284 million to expand nutrition assistance under the Food for All bill to undocumented immigrants of all ages (not just those over 55, as Newsom proposes).
• $400 million to increase the state's earned income tax credit to a minimum of $255 for workers who earn less than $30,000 a year.
• An expansion of the state's young child tax credit, for families with children under 6.

In addition, a statewide network of more than 100 immigrant and labor advocacy groups, dubbed the Safety Net for All Coalition, is getting behind a bill, AB 2847, that would put $690 million into a pilot program to fund unemployment insurance for undocumented workers. California employers contribute to the state unemployment insurance trust fund on behalf of undocumented workers, but those workers are ineligible for its benefits.

Growing up in Calexico with a single mother who was a farmworker, Castro said he experienced firsthand the importance of the social safety net when his mom lost her job.

"I know what it's like to need these services — what it's like to need food assistance, unemployment benefits, Medi-Cal — to be able to not so much thrive, but to be able to survive," he said.

In California, 1 in 4 residents was born in another country, and roughly 2 million Californians are unauthorized immigrants — most of whom have been here for over a decade and have no clear way to obtain legal status. Lawmakers have gradually made more state benefits available to these immigrants, who are denied many federal services. Access to everything from college financial aid to legal services to pandemic relief has been the result of persistent organizing by pro-immigrant advocacy groups in the state.

Eduardo Garcia, senior policy manager with the Latino Community Foundation, is calling on the governor to embrace the Senate Democrats' proposals to target funding to the state's lower-income residents, including unauthorized immigrants, rather than use $11.5 billion for a gas tax rebate for all vehicle owners, as Newsom proposed in the May budget revision.

"We actually see that as a missed opportunity to help some of the most vulnerable Californians, many of whom we know don't own a vehicle," said Garcia. "We actually think there are other initiatives to help reduce poverty in the state that must be taken seriously into consideration in time for the final budget."

The 1979 spending restriction, known as the Gann limit, is likely to be a huge hurdle. It says the state may not spend more per capita than it did in 1978, adjusted for inflation. There are some exceptions, including for infrastructure and tax rebates. But the state's legislative analyst says Newsom's current budget proposal is already $3.5 billion over the limit.

"The surplus is so large that it's putting us up against, if not over, this proposition for state appropriations," said Gabriel Petek, the legislative analyst. "In our judgment, that's going to force the Legislature to have to make some trade-offs."

The gas tax rebate isn't affected by the Gann limit, he said, but spending more on the social safety net will only make the imbalance worse.

"If the Legislature wanted to increase spending on some social services, our recommendation would be for them to consider reducing other types of services," he said. "It is a difficult set of choices."

Beyond that, lawmakers and the governor need to keep an eye on the overall economy, which Petek says is at risk of falling into a recession, as the U.S. Federal Reserve raises interest rates in an effort to rein in inflation.

If Californians' incomes drop in the coming year, tax revenues will, too, forcing cuts to programs that were expanded when times were flush, pointed out Andrew Pederson, capitol director for Govern for California, a nonprofit organization working to counter the influence of special interests in Sacramento.

"It's not comfortable to fall off a fiscal cliff," said Pederson. "That's where programs funded with one-time funding tend to fold up and people are left empty-handed. So we tend to take a more conservative approach when it comes to these things."

Republican consultant Mike Madrid argues that a lot of the unexpected revenue should be refunded.

"California, unfortunately, I think, is becoming a state with a tax system that is overly reliant on very high-income earners and is extraordinarily generous to very low-income earners," he said. "I do think with this size of a surplus, there needs to be some sort of rebate or refund back to the taxpayers who paid it."

But Madrid also said the pandemic showed the importance of providing health care for all Californians, even at taxpayer expense.

"We've learned: contagion, public health — it's all intertwined. Viruses don't care if you're undocumented or not," he said. "We also, I think, realize that there's some benefit to ensuring that everybody in our society around us, regardless of status, is healthy."

As state lawmakers hammer out their version of a budget bill this month and then negotiate with the governor on a version he's willing to sign by the June 30 deadline, the debate over extending services to undocumented immigrants builds on a political consensus that's been growing for more than a decade: that immigrants, regardless of status, are an integral part of California's economic and social fabric.

"California is actually leading in a lot of ways," said Garcia. "But at the same time, we have a historic budget surplus. We can afford to include these essential workers in the safety net. … We think that this budget has to reflect the values that we have as a state."