A year after granting Medi-Cal access to low-income immigrants without legal status, Gov. Gavin Newsom is proposing to freeze enrollment of new recipients and charge premiums in a move expected to save the state more than $5 billion.

Under Newsom’s proposal announced today, Medi-Cal — the state’s health insurance program for low-income people and those with disabilities — beginning in 2026 would no longer accept new enrollees 19 and older who lack permanent legal status.

The 1.6 million immigrants already signed up would not lose their Medi-Cal coverage, and children could still enroll. All undocumented Californians would still be covered for emergency medical and pregnancy care — so-called “limited scope” coverage that is paid for with federal dollars. But those who don’t enroll before January 2026 would be uncovered for other medical expenses, such as prescription drugs and doctor’s visits.

Roughly a third of California’s nearly 40 million residents are covered by the program, which is available to people who make less than 138% of the federal poverty level — about $21,600 for an individual or $44,400 for a family of four. Earlier this year, the state had to appropriate billions in additional funding and take out a loan to cover growing Medi-Cal costs, including from increasing enrollment by senior citizens and rising pharmaceutical prices.

The proposed reversal marks a significant retreat on an issue the governor has touted as being a linchpin in his goal of providing universal health care coverage in California. His success pushing through the initiative, which began in January 2024, helped solidify Newsom’s role as a progressive force in the Democratic politics. The back tracking will be a political gift to conservatives, who for months have been criticizing the program as excessively expensive and out-of-touch with what Californians want in tough economic times.

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Newsom tried to spin his decision to cut back on coverage for undocumented immigrants as one that will bolster Medi-Cal. “These changes are designed to preserve that commitment, protect coverage for millions of Californians, and preserve the strength of our values and health care system,” according to a fact sheet Newsom’s office circulated ahead of his budget presentation.

And the governor returned to a now familiar refrain, blaming President Donald Trump for unleashing the economic turmoil that forced his hand on the Medi-Cal cuts. Tariffs imposed by Trump, according to Newsom’s office, have decimated state revenues to the tune of $16 billion. Combined with existing budget problems, Newsom’s office said “the state must take difficult but necessary steps,” to bring down costs.