November 17, 2025
The Honorable Gavin Newsom, Governor 1021 O St.
Sacramento, CA 95814
Re: A FY 2026-27 State Budget for California’s Working Families
Dear Governor Newsom:
Health care is in jeopardy. As many as 3.5 million Californians could soon lose health care because of policy decisions at the state and federal level. Policymakers can prevent communities from losing health care or going even deeper into debt. Devastating federal cuts and restrictions contained in H.R. 1 are designed to push struggling workers out of Medi-Cal coverage. On top of this, state leaders made deep cuts to care for immigrant communities in this year’s budget.
These decisions mean Californians and families will be pushed further into debt, face impossible choices between going to the doctor and paying for food or rent, or get sicker or even die from delaying care. Meanwhile under Trump policies, corporations and the wealthiest will continue to grow even richer.
We urge you to stand up for struggling families:
- Commit to stop health care cuts that hurt working families and identify opportunities to restore or delay health care cuts in the FY25- 26 budget
- Hold the winners under H.R. 1 – corporations and wealthy billionaires –
accountable for paying their fair share
I. Say “No” to Cuts Targeting Working Families
Maintain California’s Progress Towards Universal Health Care: Health4All: Last year’s decision to freeze eligibility for health care coverage for undocumented immigrants could lead to a loss of coverage for one-third of state’s 1.7 million enrollees. Those who enroll after January 2026, would be uncovered for routine medical expenses, such as prescription drugs and doctor’s visits at a time when California immigrants and their families are under attack. Now is not the time to deny access to critical health and mental health care services for our state’s most vulnerable populations. We urge you to maintain full-scope Medi-Cal for the undocumented and Unsatisfactory Immigration Status (UIS) populations.
Mitigate and/or Reverse the Harms imposed by State Budget Cuts: Last year’s decision to eliminate or restrict health care coverage for undocumented and certain immigrant populations could lead to a loss of coverage for over 1 million Californians. Beginning in 2026, California will no longer accept new enrollees 19 and older who lack permanent legal status. Starting July 1, 2026, Medi-Cal will no longer cover adult dental services for remaining undocumented and those with certain immigration status. Currently enrolled adults, including homeless, medically frail and those below 100% FPL will be expected to pay a premium of $30 per month beginning July 1, 2027, to remain on Medi-Cal or lose coverage. California has tried to score savings by eliminating adult dental coverage in the past leading to disastrous results as routine dental problems turned into more expensive emergencies. Access to critical health, mental and oral health care are critical to addressing trauma and safeguarding health. We urge you to consider premium exemptions for certain populations such those earning less than 100% FPL, homeless and medically frail, while delaying cuts to full- scope Medi-Cal dental benefits.
Fix Harmful, Unworkable State Budget Provisions: As California policymakers rush to meet urgent deadlines, there is great risk that ill-conceived, unworkable policies will be implemented with unintended consequences and devastating results. Advocates have recently learned for example, that the Department of Health Care Services (DHCS) intends to require all immigrants in California’s Medi-Cal program to meet H.R. 1’s strict work requirements, despite the fact that many do not have authorization to work in the U.S. Additionally, advocates recently learned that DHCS does not believe current state law allows for a shorter 12-month lookbook period for re-payment of premiums by immigrant populations to qualify for re- enrollment. Without a change in state law, immigrants would be barred from reapplying for Medi-Cal coverage unless they pay all past due premiums with no forgiveness. We urge you to reverse course on problematic proposals including harmful application of work requirements for immigrants who lack work authorization and failure to apply a lookback period for re- payment of premiums by immigrants.
Invest in the Infrastructure Needed to Mitigate the Harms of H.R. 1 Implementation for California’s Working Families: H.R. 1 imposes significant eligibility and enrollment changes with arbitrary and rushed timelines and inadequate funding for implementation. In order to mitigate the harms, California needs to invest in automation, leveraging technology to streamline processes and maintain eligibility, especially through “ex parte” renewals and work requirement automation which have been proven to significantly reduce racial, ethnic and linguistic disparities, particularly for individuals with limited English proficiency. Additionally, the state must ensure that staff are trained to assist those with complex needs and to protect vulnerable populations by identifying at-risk groups and connecting them with community and legal support before benefits are terminated. We urge you to invest in automation upgrades and in culturally and linguistically competent navigation assistance from trusted legal service providers and community health workers, promotoras/es and representatives (CHWPRs).
II. Hold the winners under H.R. 1 – corporations and wealthy billionaires – accountable for paying their fair share and stop the transfer of wealth from those in poverty to the ultra-wealthy
Raise Revenues: The policy changes in H.R. 1 will strip billions of dollars in federal funds for California’s safety net in order to provide tax cuts to corporations and wealthy individuals. A recently released report from Americans For Tax Fairness showed that the 2017 Trump tax law, which H.R. 1 extended, cuts nearly $1 trillion in health care to fund, opened the door for eight major health care corporations to avoid $34 billion in taxes, all while hiking costs, denying care, and cutting staff. Ultimately patients will pay for H.R. 1. We urge you to consider alternative sources of funding or revenue solutions to offset potential cuts to Medi-Cal funding and ensure our state is able to backfill the giant budget hole Republicans in Congress have created through their tax cuts.
Protect Californians from Rising Medical Debt: California’s health care costs are skyrocketing. One in three Californians is burdened by medical debt, and most often the impacts are felt by people of color. A CPEHN analysis estimated conservatively that Californians carry more than $10 billion in medical debt. Looming cuts to affordable health care will leave more and more Californians uninsured or underinsured, further exacerbating the state’s medical debt crisis. CPEHN and partners greatly appreciated your signature on AB 1312 (Schiavo), 2025, which will reduce medical debt by requiring hospitals to proactively screen and determine whether patients are eligible for financial assistance before they receive a bill. A significant state investment to the Department of Health Care Access and Information (HCAI) could help to ensure appropriate funds for the development of streamlined financial assistance applications and automated screenings, as well as timely documentation of complaints and investigations. We urge you provide (HCAI) with the resources noted by Appropriations committees in order to ensure successful implementation of this new law.
Invest in Data Infrastructure to Address Rising Health Care Costs: California’s Health Care Payments Data (HPD) program or All-Payer Claims Database (APCD) is crucial for improving healthcare through greater cost transparency. HPD data is being used to inform policy decisions regarding the provision of quality health care, to reduce health care costs and disparities and develop innovative health care delivery approaches that are both cost effective and responsive to the needs of all Californians. Since its establishment the HPD has released five years of detailed healthcare service data for most of the Californian population, including member and utilization data for 82% of California’s total population and 89% of California’s insured population (for 2021). Over the next several years, as required by HPD’s enabling statute, HCAI plans to expand data collection to include dental data and non-claims payment data. While the Legislature provided $60 million in one-time funding via SB 840 (Mitchell, Chapter 29, Statutes of 2018) to establish the HPD, spending authority expired in June 2025. To support ongoing operations, HCAI needs an annual total funds budget of $22 million for the HPD Program, including $15.4 million in state funds, starting with Fiscal Year 2025-26. We urge you to provide HCAI with the full resources requested so it can continue to make progress in advancing transparency in health care through data and fulfilling the statutory intent and goals of the HPD Program.
Conclusion: CPEHN looks forward to working closely with you and your administration during this perilous time in our nation’s history, to address further budget considerations and to uphold our promises on health and racial equity for all Californians regardless of age, race, ethnicity, sex, gender identity, or immigration status. We call on your leadership and dedication to commit to stopping health care cuts that hurt working families while holding the winners of H.R. 1 – corporations and wealthy billionaires – accountable for paying their fair share so that all Californians can get the care they need when they need it.
Sincerely,
Ronald Coleman Baeza Managing Policy Director
California Pan-Ethnic Health Network (CPEHN)