California risks losing 2 million coverage

California Health Care Foundation said on May 15 that up to 2 million Californians could lose health coverage as federal and state policy changes take effect. The nonprofit said the risk comes from new Medicaid work requirements, more frequent eligibility checks and restrictions affecting some immigrants, citing state estimates and a new analysis it commissioned with Health Management Associates. The report lays out two state-designed fallback programs rather than a full replacement for Medi-Cal. The choice for Sacramento, the group said, is how much care the state can preserve while facing budget pressure and reduced federal support. ### Where does the 2 million figure come from? The California Department of Health Care Services said in a January 29 implementation plan that new federal eligibility and enrollment changes under H.R. 1 are expected to affect up to 2 million Medi-Cal members. The department said the plan is aimed at minimizing coverage loss as California carries out the federal law. (chcf.org) The California Health Care Foundation article published May 15 also cited the state Legislative Analyst’s Office in saying federal and state policy changes could result in 2 million Californians becoming uninsured. The larger CHCF-HMA report used a slightly narrower estimate, saying DHCS projects 1.8 million Californians could lose Medi-Cal coverage in coming years. (dhcs.ca.gov) ### Which policy changes are driving the projected losses? DHCS said federal law will narrow which immigrants can receive federally funded full-scope Medi-Cal starting October 1, 2026. The department said adults ages 19 to 64 without children under 13 will face work, volunteer, school or training requirements starting January 1, 2027, with exemptions for pregnancy, disability and serious health conditions. DHCS also said adults ages 19 to 64 will have to renew Medi-Cal every six months starting January 1, 2027, and missed deadlines could lead to coverage loss. (chcf.org) California has also already changed state rules for some immigrant adults. DHCS says that starting January 1, 2026, some immigrants who previously qualified for full-scope Medi-Cal no longer qualify, while children under 19, pregnant people through one year postpartum and certain current or former foster youth remain eligible regardless of immigration status. (dhcs.ca.gov) ### What does the CHCF analysis say California could do instead? Health Management Associates modeled two illustrative statewide programs for people who lose Medi-Cal, with annual costs of $3.1 billion to $4.6 billion, compared with $6.7 billion for a full Medi-Cal-equivalent approach, according to the CHCF report. The report said the options differ on benefits, cost sharing, provider payment rates and the length of bridge coverage after someone loses eligibility. (dhcs.ca.gov) The report said the core tradeoff is cost versus scope of benefits and access to care. It said immigrants who lose coverage would have no federally subsidized alternative for comprehensive coverage, making state design choices especially consequential for that group. ### Who would feel the effects if coverage shrinks? (chcf.org) Medi-Cal covers doctor visits, hospital care, prescription drugs, behavioral health treatment, dental and vision care, according to CHCF and DHCS. CHCF said adults with low incomes enrolled through the Affordable Care Act expansion would be among the people most exposed, especially those who struggle to meet work rules or complete more frequent renewals. (chcf.org) CHCF said people who lose coverage would likely turn to emergency rooms, county indigent care programs and other safety-net providers. Public hospitals and county health systems would face the greatest strain, the foundation said, because uncompensated care would rise as more people become uninsured. (chcf.org) ### How does this fit into California’s budget debate? The Legislative Analyst’s Office said in March that Medi-Cal spending is projected to reach $49 billion from the General Fund and $222 billion total in 2026-27. The office said new federal rules on provider taxes will reduce state revenue by billions of dollars and leave lawmakers with choices on how to implement H.R. 1 eligibility changes. (chcf.org) The CHCF-HMA report said Governor Gavin Newsom’s January 2026 budget anticipated a $22 billion state budget deficit for 2027-28, with much of that tied to H.R. 1 and broader health spending growth. The report said those fiscal conditions limit how much of the lost federal support California could realistically replace on its own. (lao.ca.gov) ### What should readers watch next? October 1, 2026 is the first major federal eligibility date flagged by DHCS, when narrower federal rules for some immigrants take effect. January 1, 2027 is the next major deadline, when work requirements and six-month renewals are scheduled to begin for many adults in Medi-Cal. The 2026-27 budget process is the immediate state venue for those decisions. (chcf.org) CHCF said its analysis is intended to inform near-term discussions over whether California restores broader full-scope Medi-Cal eligibility or builds a more limited statewide backstop instead. (chcf.org) (dhcs.ca.gov)