LOS ANGELES – June 30, 2025 – Over the weekend, Governor Gavin Newsom signed California’s 2025-26 fiscal year budget – a budget that addresses the state’s fiscal challenges at the expense of its most under-resourced residents and the health care safety net. The budget comes as state leaders, health providers, and residents are struggling with high levels of uncertainty and anxiety about the future with the threat of federal cuts looming.
Starting in January, the budget will freeze Medi-Cal enrollment for adults who have unsatisfactory immigration status, and in July of next year it will eliminate full scope dental coverage for this population. These changes are a dramatic pullback from the state’s values and promises to expand health care coverage and access for all. Loss of coverage will undo years of progress in building healthy communities.
The budget will also eliminate Prospective Payment System (PPS) rates for care provided by health centers to Medi-Cal patients with unsatisfactory immigration status, effective July 2026. This payment system is intended to ensure fair reimbursement for the comprehensive care provided by health centers and is integral to their financial viability and sustainability. Health centers are federally required to serve all members of their communities, regardless of ability to pay or circumstances. Paying different rates for different patients will unfairly punish providers who serve certain neighborhoods and communities, further deepening gaps in California’s health care delivery system. We appreciate that the budget delays the elimination until next year and hope that alternative solutions will be identified.
Finally, the budget defunds health enrollment navigator programs. Navigators support patients and community members with enrolling in, and retaining, their health care coverage. With Congress considering proposals to mandate (paper)work requirements and more frequent eligibility verifications for Medi-Cal members, navigators will be more critical than ever. Without navigators, Californians are going to lose coverage and their ability to access care.
Health centers provide care to one in three Medi-Cal members. This budget weakens California’s Medi-Cal expansions and will reduce coverage and access to care for our patients. The combination of these changes, plus potential federal Medicaid cuts, will decimate the viability and sustainability of community health centers.
California’s leaders plan to revisit the budget later in the year when the extent of federal Medicaid cuts and changes becomes clearer. Health centers understand the challenges the federal environment and state budget deficit present. CCALAC looks forward to working with the legislature to identify solutions to preserve California’s coverage gains, protect access to care, and strengthen the safety net.
About the Community Clinic Association of Los Angeles County
Founded in 1994, the Community Clinic Association of Los Angeles County (CCALAC) is the largest regional association of community health centers in California. Health centers in Los Angeles serve more than 2.02 million patients at over 450 sites across the county. The majority of these patients (74%) have low incomes, and 93% are covered by public insurance or uninsured. CCALAC is dedicated to helping health centers remain at the forefront of health care transformation, in support of the patients and communities they serve. For more information about CCALAC, visit www.ccalac.org or call (213) 201-6500.
Contact: Taryn Burks – Communications Manager, media@ccalac.org | (213) 201-6529.