California Lawmaker Calls for Federal Audit of Medi-Cal as Costs Soar

The Republican assemblyman’s resolution follows state’s borrowing to shore up the program after extending coverage to illegal immigrants.

Assembly Minority Leader James Gallagher speaks to the Legislature at the Capitol in Sacramento, on Aug. 31, 2024. Travis Gillmore/The Epoch Times

A Republican lawmaker is calling for a federal audit of California’s Medi-Cal program after the state made requests to borrow $6.24 billion to meet cost overruns.

Gov. Gavin Newsom requested two loans in the last few weeks to shore up the state health-care plan. The first $3.44 billion loan was granted March 12 before a second loan request for $2.8 billion was made last week.

Assembly Minority Leader James Gallagher, whose district is in Northern California, on March 20 filed Assembly Resolution 4, which stated that the program was “in jeopardy and threatens the health and safety of California residents.”

The resolution, which would have to pass Democratic supermajorities in both chambers of the state Legislature, calls on the federal Centers for Medicare and Medicaid Services to initiate an audit of the state program to help restore its fiscal health.

Medi-Cal’s spending has nearly doubled under Newsom, rising from $21.6 billion to $42.1 billion over six years.

Much of the increased funding is driven by the expansion of Medi-Cal benefits to illegal immigrants, which has cost $8.4 billion a year, Gallagher estimated.

Gallagher said the program’s expansion to those without legal status was taking a toll on its low-income recipients.

“Medi-Cal is supposed to protect our most vulnerable, but Gov. Newsom’s decision to expand the program to illegal immigrants has added costs that are just unsustainable,” Gallagher said in a press release March 21. “Hospitals and providers are struggling to keep their doors open, patients can’t get in to see a doctor, and the state needs billions more just to keep the program running.”

The lawmaker said the program will increase to $118.1 billion in the 2025–2026 budget year.

“This is about priorities,” Gallagher said. “While Californians struggle to access care, the state keeps throwing money at a program that’s deep in the red. We need accountability before it collapses completely.”

Newsom has increased the budget for the state’s health care plan while proposing cuts to other programs in the upcoming budget year, which starts July 1 and ends June 30, 2026. One proposed reduction is an 8 percent cut to the University of California and the California State University systems.

California Gov. Gavin Newsom speaks at a news conference at East Los Angeles College in Monterey Park, Calif., on Feb. 26, 2025.  Mario Tama/Getty Images

Newsom is also proposing a $7 billion withdrawal from the state’s rainy day fund, Gallagher said.

In response to criticism of the state’s decision to fund health care for illegal immigrants, Newsom said last week that California is not the only one struggling with rising costs in medical care.

“This isn’t new—as the administration already outlined in the governor’s January budget proposal, additional funding is needed to support Medi-Cal,” a spokesman for Newsom told The Epoch Times in an email Thursday. “Rising Medicaid costs are a national challenge, affecting both red and blue states alike. This is not unique to California.”

Newsom’s office did not immediately return a request for comment about Gallagher’s proposed resolution Monday.