LOS ANGELES – May 15, 2026 – Despite higher-than-projected tax revenue, Governor Gavin Newsom’s May Revision again seeks to solve California’s budget problems on the backs of the most vulnerable, including immigrants, older adults, and people with disabilities. The revised budget proposal leverages higher tax revenue while maintaining reserves over the next two fiscal years, yet fails to reverse harmful Medi-Cal cuts.
The budget maintains damaging Medi-Cal cuts from FY2025-26 that impact immigrants, including the elimination of health centers’ prospective payment system (PPS) reimbursement for state-only funded services, effective July 1, 2026. This cut will cost Los Angeles health centers roughly $400 million a year — combined with H.R. 1 coverage losses and rising uncompensated care, this change threatens to push safety net clinics to the breaking point.
Further, the budget proposes raising monthly premiums from $30 to $50 for adults with unsatisfactory immigration status, reinstating Medi-Cal asset limits for seniors and people with disabilities, and narrowing eligibility for Enhanced Care Management (ECM) and Community Supports (CS). The budget also fails to restore funding for Medi-Cal enrollment navigators, despite the proven effectiveness of the program and acknowledgement of the coverage losses that are coming under H.R. 1.
Significantly, to comply with new federal requirements (CMS SMD #25-003), the administration proposes a heavy-handed approach that would shift Medi-Cal members with unsatisfactory immigration status from managed care to fee-for-service beginning January 2027 — saving the state over $500 million in FY26-27 and then $1.5 billion annually. Moving patients out of a coordinated care delivery model into a system with limited specialty access and no ECM or CS services creates a two-tiered system and risks higher long-term costs. We urge the legislature and administration to find a better solution for patients and taxpayers.
The budget does include a few bright spots: promising new revenue generation proposals (including a digital software tax and permanently limiting business tax credits), expanded state subsidies for Covered California enrollees who earn up to 200 percent of the federal poverty level, $20 million for immigrant legal services, and some county support for H.R. 1 administrative workload — though the funding is not enough.
The May Revise fails to keep California’s promises on health care for all. We urge the legislature to reverse Medi-Cal UIS changes, restore health centers’ PPS reimbursement, and reject proposals that shift the burden of balancing the budget onto immigrants, older adults, and people with disabilities.
The safety net is facing devastating cuts and coverage losses, and, if the May Revise is any indication, a state-level solution is not coming soon. The safety net cannot wait — LA County voters must approve Measure ER on the June primary ballot.
###
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 2.18 million patients at nearly 600 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.