The state already has seen the budget-busting effects of expanding coverage but is now doubling down.
The state already has seen the budget-busting effects of expanding coverage but is now doubling down.
F ree health care for illegal immigrants — what could go wrong?
California taxpayers are about to find out. Starting January 1, the Golden State began offering Medicaid coverage to more than 700,000 illegal immigrants, the latest and by far the largest such program in the country. Yet other states have recognized that this new handout will see spiraling enrollment and mounting red ink. It’s Obamacare’s Medicaid expansion all over again — a massive entitlement that gouges taxpayers more with every passing year.
As is often the case, California is doing the bidding of the furthest-left activists in the Democratic Party. In 2015, the state gave free health care to low-income children who are illegal immigrants. That move was followed by expansions for young adults up to 25 and anyone 50 or older — all of which had put about 650,000 illegal immigrants on welfare. Now California is filling in the middle, covering low-income illegal immigrants between ages 26 and 49 under Medi-Cal, which is the state’s version of Medicaid. Consistent with Medicaid expansion, the illegal immigrants must earn less than 138 percent of the federal poverty level, although, unlike the previous entitlement, this one is paid for completely by state taxpayers, with no federal help.
Governor Gavin Newson has heralded this entitlement as “a transformative step,” which is certainly true when it comes to the state budget. Officials say it will cost $3.1 billion annually, adding nearly 10 percent to Medi-Cal’s $37 billion annual tab — already the second-largest line item in the budget. Yet the initial estimate is sure to be woefully low.
Illinois shows what’s bound to happen. It provides free Medicaid-style health care to the second-largest number of illegal immigrants, after California. After the state expanded this benefit to adults between the ages of 42 and 64 in 2022, enrollment blew past projections, costing about double what experts anticipated. Last summer, Illinois governor J. B. Pritzker paused enrollment while capping the number of seniors at 16,500. He also established co-pays of up to $250 for some hospital visits. He may as well have admitted that covering illegal immigrants is a fiscal failure that jeopardizes other priorities, such as education and infrastructure.
California ignored Illinois’s experience, but other states paid attention. Colorado has limited coverage to 10,000 illegal immigrants in 2024, while Utah has limited enrollment to 2,000 children. Other liberal-dominated states, like New York, have not enacted sweeping coverage for adults because of fears over costs. As one news story put it last year, “undocumented immigrants are facing one major roadblock to health coverage in blue states: Democrats.” As the story notes, these Democrats are worried about costs and becoming a magnet for illegal immigrants seeking taxpayer-funded benefits.
It’s rich to see some Democrats recognize fiscal reality, since they continue to ignore it with Medicaid expansion, which is a direct analog to the new entitlement for illegal immigrants. By 2016, just two years after taking that road, California had already enrolled more than 300 percent more people than expected, exceeding 3.8 million. Enrollment has surged by another million people since then. Nationwide, Medicaid expansion is more than twice as large as initially predicted, adding billions of dollars to state and federal budgets.
California’s spiraling Medicaid costs are a major driver of the state’s expected $68 billion deficit in the current fiscal year. Governor Newson’s administration is already pressing agencies to cut costs wherever they can, but at Medi-Cal, spending is all but guaranteed to go up. That’s true because Medicaid expansion continues to cover more people and because the number of enrolled illegal immigrants will surely surpass the state’s rosy projections of limited sign-ups and lower costs.
Will California backtrack, as costs mount and fiscal trade-offs become necessary? It seems unlikely, given Newsom’s presidential ambitions. It helps to tell the far-left base that he oversaw the largest expansion of health-care coverage for illegal immigrants in American history. Yet his political gain requires taxpayer pain, and unlike Medicaid expansion, every penny that goes toward illegal immigrants’ medical care will come directly from Californians’ pockets. Whereas Obamacare’s Medicaid expansion is largely federally funded, Medicaid can’t pay for illegal immigrants, so California taxpayers are on the hook.
If California won’t learn, other states must. Activists are pushing every Democrat-led state — and even some Republican-led states, like Utah — to take this road in the latest demand for a health-care entitlement that never shrinks and always grows. Wise leaders will recognize that they can’t afford to repeat the mistake of Medicaid expansion. They might even silently wish that they had the wisdom of the ten remaining states that have held out on that Obamacare program. In those states, at least, there’s still respect for taxpayers and the vulnerable American citizens whom Medicaid was designed to serve.