For decades, Californians have generally said that immigrants, who make up more than a quarter of the state’s population and a third of its labor force, are beneficial to the state and its economy. But budget instability and concerns about rising costs are spilling into a debate over the controversial and expensive policy of allowing low-income immigrants without legal status to receive state-funded health coverage.
Now, Democrat Xavier Becerra and Republican Steve Hilton present a stark choice to voters in the race to be the next governor at a moment when public support for the state’s generous safety net is starting to fray.
Both frame the choice as an economic one.
Becerra, former secretary of Health and Human Services under President Joe Biden, has said it would be “foolish” to exclude the poorest immigrants from routine care and push them into expensive emergency rooms on the taxpayer’s dime. Hilton, a conservative commentator backed by President Donald Trump, has promised to eliminate their coverage and has echoed national Republicans who have skewered California’s expansions to bolster their claims of fraud and abuse in the Medicaid program.
With voters nationwide worried about inflation and the rising cost of living, some Californians might feel less inclined to provide full healthcare coverage to those lacking legal status. What the state does next could have profound implications for its healthcare system and sprawling economy.
Over the past decade, California lawmakers used state dollars to expand Medi-Cal, offering all low-income residents comprehensive coverage regardless of immigration status. But enrollment surpassed initial projections, as did the cost. Medi-Cal coverage of immigrants without legal status costs the state roughly $10 billion a year, according to California’s nonpartisan Legislative Analyst’s Office, more than double the initial estimates.
California lawmakers and Democratic Gov. Gavin Newsom, who championed the program, have approved major rollbacks of benefits for those residents. They said the state can’t afford ballooning healthcare costs amid massive federal cuts from the GOP tax-and-spending law known as the One Big Beautiful Bill Act; the California Health and Human Services Agency projected up to 3.4 million Medi-Cal enrollees could lose coverage and the state could lose more than $30 billion a year in federal funding under the law, causing major disruptions in the safety net health program.
Medi-Cal’s budget for the 2026-27 fiscal year is $217 billion, and the program serves more than 14 million Californians.
Meanwhile, many legal U.S. residents and citizens have seen their health premium payments skyrocket this year after Congress let enhanced federal Affordable Care Act subsidies expire at the end of December.
As the state grappled with a deficit last year, a majority of likely voters in California said — for the first time in nearly a decade — that they opposed providing health insurance to immigrants without legal status, according to a poll by the Public Policy Institute of California.
“The state faces major challenges, and healthcare is one of the major expenditures,” said Mark Baldassare, PPIC survey director. “People have become more selective about how they want to see those limited healthcare dollars spent.”
Hilton, running on a platform of affordability and lowering taxes, has seized on the sentiment, casting health coverage for immigrants without legal status as deeply unfair and a direct threat to the state’s ability to help citizens.
“Stop taking money from California taxpayers who can barely afford their healthcare to give free healthcare to citizens of other countries who shouldn’t even be here,” Hilton said in a Facebook video the morning of the June 2 primary.
In campaign stump speeches, Hilton promised to use the savings to lower healthcare costs for other Californians without detailing how. Hilton did not respond to requests from KFF Health News for comment.
“Their messaging is very, very simple: It’s an us vs. them,” said Roger Salazar, a Democratic political consultant who represents a coalition of healthcare advocates who argue providing coverage to people who can’t afford it strengthens the workforce and, as a result, the economy. “It’s just a question of convincing the average voter that it’s much better economically.”
A son of immigrants, Becerra for decades pushed to extend safety net benefits in Congress and has made a similar pitch in his campaign for governor. He did not respond to requests for comment.
“Immigrants, whether documented or not, work hard. They pay taxes, and sometimes they get injured on the job or their children get sick,” Becerra said during a debate in May. “It would be foolish to tell a family that they don’t have access to the pediatrician or the family doc.”
Becerra, who could become California’s first elected Latino governor, objected last year when Newsom and legislative leaders decided to freeze Medi-Cal enrollment for adults without legal status, cut benefits, and impose monthly premiums.
“Stop treating coverage as a budget variable that expands in good years and contracts when revenue dips,” Becerra wrote in May in response to an Orange County Register candidate questionnaire. He has vowed to pursue new, steady revenue to fund basic services, such as by upping taxes on corporations and the wealthiest Californians.
In 2023, California was home to about 2.3 million people without legal status, representing roughly 8% of the state’s labor force, according to the Pew Research Center. And 1 in 5 California children live in a family that includes at least one member without legal status, according to the California Department of Education. Healthcare economists say giving people access to preventive healthcare saves taxpayers money in the long run by keeping the workforce healthy and relieving pressure on an overburdened system.
That, Baldassare said, wasn’t a hard argument to make during the covid pandemic, when immigrants were celebrated as essential workers and the link between individual well-being and public health was more obvious.
But Medi-Cal costs to cover roughly 1.4 million immigrants have ballooned, according to the latest estimates from the Department of Health Care Services. Because only some lawfully present immigrants are eligible for federal Medicaid benefits, states like California that cover other populations must do so exclusively with state funding.
California’s budget experts have warned that maintaining full Medi-Cal coverage for immigrants without seeking additional revenue would destabilize the state’s long-term fiscal outlook.
In a legislative hearing last year, Republican Assembly member Carl DeMaio questioned whether California taxpayers would prioritize the expansions, saying he doubted “illegal immigrant healthcare in the general fund would be at the top of their list.”
After lawmakers approved the spending reductions, support for immigrant health coverage dropped, Baldassare said. Democratic lawmakers and Newsom agreed to delay several Medi-Cal cuts until July 2027, leaving decisions for the next governor.
David Hayes-Bautista, who has spent his career studying the economic contributions of Latinos and immigrants, said Californians without legal status have higher labor force participation and tend to work in industries and occupations that don’t offer employer-based health insurance. As a result, many resort to Medi-Cal, saddling the state with the healthcare costs instead of employers.
“California, as a state, has the world’s fourth-largest GDP, which is true thanks to Latinos,” said Hayes-Bautista, director of the Center for the Study of Latino Health and Culture at UCLA. Without contributions from Latinos, many without legal status, it drops to eighth place, about the size of Italy’s economy, he added.
Immigrant advocates hope to have a more vocal champion in Becerra, the favorite to become governor in a state where Democrats outnumber Republicans nearly 2-to-1.
“He will fight, he will push back, he will do all that he can,” said state Sen. María Elena Durazo, a former labor leader who has championed the immigrant healthcare expansions. “That’s the most we could expect.”
