California will spend 28 times more on healthcare for undocumented immigrants than on law enforcement in its 2025–2026 budget, according to the Daily Caller.
The Legislative Analyst’s Office (LAO) report estimates that expanding Medi-Cal—California’s joint state–federal Medicaid program—to cover all undocumented immigrants will cost $10 billion, while just $348 million is allocated for state law enforcement. The projected cost is 35% higher than the $7.4 billion initially estimated in Governor Gavin Newsom’s January 2025 budget proposal.
Medi-Cal currently provides full medical, dental, and vision coverage to 1.7 million undocumented immigrants, who make up 11% of enrollees, according to the report. These benefits will consume roughly one-quarter of the state-funded Medi-Cal budget.
Diana Crofts-Pelayo, a spokesperson for Governor Newsom, said in a statement to the Daily Caller News Foundation that the administration remains “committed to effective crime reduction,” citing a decline in California’s crime rate and noting that most police funding comes from local governments rather than the state.
The spending contrast highlights California’s budget priorities amid national debates in Congress over funding healthcare for undocumented immigrants and ongoing tension between federal and state policies on immigration enforcement.
California became the first state to extend Medi-Cal to all immigrants regardless of status in 2022. The LAO report said this expansion “more than doubled” initial cost estimates.
According to Niklas Kleinworth, a policy analyst at the Paragon Health Institute, California leveraged an accounting loophole within Centers for Medicare and Medicaid Services (CMS) rules to secure additional federal Medicaid funding. “What they did was technically legal, so you can’t call it defrauding the government,” Kleinworth told the DCNF. “But it really was an abuse of the intent of the policy.” Even President Joe Biden’s CMS acknowledged that the policy diverged from the intended design of federal guidelines.
Trump’s One Big Beautiful Bill, signed in July 2025, closed those loopholes, forcing California to seek new revenue streams. By June 2025, Newsom and legislative Democrats agreed to freeze new undocumented adult enrollment beginning January 2026, eliminate dental coverage, and reduce certain clinic payments.
Starting in July 2027, undocumented Medi-Cal recipients will face a $30 monthly premium—a 96% discount compared with the $650 average paid by Californians with employer-sponsored insurance. The LAO also proposed a $900 annual tax on uninsured residents to help offset program costs.
“These are unicorn policies,” Kleinworth said. “A $30 premium only exists because it’s heavily subsidized.”
Despite growing criticism, Newsom continues to defend the spending plan, calling universal healthcare one of his administration’s core achievements. He dismissed opponents as suffering from “California derangement syndrome” in an October 2025 Bloomberg interview.
