How Will Trump’s Mega Bill Impact Health Care in California?

The newly signed “One Big Beautiful Bill Act” marks the most sweeping overhaul of the U.S. social safety net in decades. President Donald Trump and his supporters call it a long-overdue effort to rein in government spending. But critics warn it will gut public health systems — especially in California, where more residents rely on Medicaid, known locally as Medi-Cal, than in any other state.

Gov. Gavin Newsom called the plan “one of the most calamitous and devastating bills of our lifetime. It’s certainly the most destructive healthcare bill in the history of this country.” He estimates up to 4 million residents could lose their health insurance.

Even with political will, California lacks the fiscal capacity to replace billions in lost federal aid, especially as lawmakers are attempting to close a $12 billion state deficit.

California is bracing for a seismic shift in health care access. While some Americans may benefit from modest tax cuts, low-income residents, undocumented immigrants, new mothers and rural families face a growing risk of losing care.

However, there are many unknowns. For example, the state could act during next year’s budget negotiations, or providers could start charging less. And the federal budget process is far from over — and many provisions won’t kick in until after another round of negotiations. Congress has to produce a budget this fall and another budget in 2026, so there is time for the situation to change before many of the cuts will hit home for families.

What’s in the bill?

The legislation slashes Medicaid, revives parts of Trump’s 2017 tax cuts, expands defense spending and immigration detention and border security, cuts clean energy tax credits and reduces SNAP funding — or food stamps, known locally as CalFresh — with about 5.5 million Californians expected to feel the impact.

On the health care front, key changes include:

• Federal work requirements kick in for Medicaid enrollees aged 19–64 on Dec. 31, 2026. It’s 80 hours/month of employment, job search or community service.
• Enrollees must prove eligibility more often — every six months instead of annually. They’ll need to submit more frequent paperwork and with stricter documentation, including proof of residency and social security numbers. The added requirements increase the risk of coverage loss due to paperwork lapses.
• New copays for doctor visits (up to $35).
• A ban on Medicaid reimbursements to clinics that provide abortion or gender-affirming care for minors.
• Limits on a key tool states, like California, use to draw down additional federal funds known as “provider taxes.”

How many Californians could lose coverage?

The Congressional Budget Office estimates that 12 million to 16 million people could lose Medicaid coverage nationwide over the next decade. In California, roughly 15 million people — about 1 in 3 residents — are covered by Medi-Cal.

California is slated to see a 19% cut in federal funding for Medicaid or roughly $164 billion over the next decade, according to an analysis by KFF, the nonprofit health care research and polling organization.

Hospitals, nursing homes and other health care providers that serve this population will be paid significantly less, which could result in fewer services or closures. 

Who gets hit hardest?

• Undocumented immigrants, recently covered under California’s Medi-Cal expansion.
• Rural communities, where over half of residents rely on Medi-Cal and many hospitals are already on the brink of closure.
• New mothers and children — about half of all births in California are covered by Medi-Cal.
• Street-level care providers, such as mobile mental health teams and clinics serving unhoused people, are often entirely funded by Medi-Cal.

One cautionary tale: Madera Community Hospital in the Central Valley closed in 2023 due to financial strain — an omen of what could unfold statewide.

Why it’s worse in California

California has led liberal states in the country with its progressive approach to health care — but also vulnerable to federal cuts. Programs like on-site pregnancy care in homeless encampments, antipsychotic medication distribution and mobile crisis teams are now in jeopardy.

The state was scaling back its own expansions — such as Medi-Cal for all undocumented immigrants — back due to its own budget pressures. Now, with the federal pullback, even more cuts are likely. Programs once considered national models are quietly being dismantled.

What about the work requirements?

On paper, requiring Medicaid recipients to work may sound reasonable. But critics of the program have argued that in practice, these policies have been more destructive than motivational.

A 2018 Arkansas pilot program pushed 18,000 people off their Medicaid coverage — even though many of them were already employed, but workers struggled to keep up on paperwork requirements. Experts warn similar bureaucratic hurdles will repeat in California.

Nationally, more than 60% of adult Medicaid recipients work. Caregiving responsibilities, disabilities and housing instability make compliance difficult for some people.

What happens to Planned Parenthood?

The bill prohibits federal Medicaid funds from going to clinics that provide abortion care, which targets Planned Parenthood.

According to the Guttmacher Institute, a research and policy organization focused on sexual and reproductive health and rights, up to one-third of its clinics could be forced to close.

That would affect services far beyond abortion — including STI testing, Pap smears, cancer screenings and birth control access.

In early July, a federal judge — Indira Talwani — issued a temporary restraining order, halting the defunding provision for 14 days, preserving Medicaid funding while the lawsuit proceeds.

Could it be reversed?

Not easily. While some provisions won’t take full effect until 2026, reversing them would require a change in presidential administration, a Democratic congressional majority and political will to unwind Trump’s signature legislation.

Keep in mind: The 2017 Trump tax cuts — once controversial — were extended in this bill, not repealed.

Will this hurt Republicans?

All nine California House Republicans voted for the bill. Yet many of their districts have high Medi-Cal enrollment and poor health access.

Democrats and health advocacy groups like Protect Our Care are already running attack ads in some/all of these areas. Still, with tax breaks kicking in immediately — and health care cuts rolling out later — the GOP is betting that voters feel gains before the pain.