Trading Healthcare for the Deficit: The True Cost of California’s MediCal freeze

By Anjali Praba

May 2026

Due to the One Big Beautiful Bill Act (OBBBA), immigrants in California are being cut from MediCal and SNAP benefits. California risks losing the $8.5 billion immigrants contribute in state taxes annually. The state is nescient toward an alternative solution that will save over $8 billion.

On July 4th, 2025, Donald Trump signed the One Big Beautiful Bill Act. On January 1st, 2026, Americans began to feel the weight of the effects. A few of the main goals of the OBBBA are to secure the US border and tighten requirements for welfare programs, including MediCal and SNAP. The OBBBA made the largest cuts to social safety net programs in US history, implementing more than $4.5 trillion in tax breaks for billionaires, but is making more than $1 trillion in cuts to programs for many Americans that rely on welfare. While staunchly against some of the policies implemented in the OBBBA, California Governor, Gavin Newsom stated by freezing MediCal, the state is saving over $5 billion, helping fill the budget deficit California faces annually. Those enrolled in full scope MediCal prior to January 1st remain eligible as long as they completed their renewal on time, and those 19 or younger are still eligible to enroll. Because of this freeze, those relying on MediCal are only qualified for emergency room visits and prenatal/postnatal care. The United States is facing a predicament of debt, morality, and risks facing repercussions that will take years to reverse.

In California, roughly 2 million immigrants rely on MediCal. These immigrants, both documented and undocumented work primarily in California’s agriculture, farming, and construction industries. Undocumented immigrants make up 24% of the agriculture and farming workforce, 26% make up the construction workforce, and overall, roughly 75% of all undocumented immigrants are employed in California. The areas in California producing the largest amount of food include the Central Valley, the Central Coast, and Southern California regions. These places are responsible for growing and producing the majority of green vegetables. In certain areas, like Santa Barbara County, ~ 80% of agricultural workers are undocumented. Santa Barbara County annually produces $2 billion worth of food, bearing the majority of berries and fruits in California, including strawberries, raspberries, and avocados, the foods Californians love to smash and spread across their toast. (Or pay $15 to have someone else do it for them.)

Governor Newsom frames this freeze as a financial responsibility to plug the $25 billion budget deficit. Cutting the healthcare of our most vulnerable workforce is not fiscal prudence, it’s a failure of planning. In order for California to balance its spending habits, it should look at systemic redundancies in its prodigious budget, starting with its public education system, rather than stripping healthcare from the state’s essential workers. In the last 5 years, California has had an average annual budget of $316 billion and typically has gone over the budget about $25 billion. $38 billion goes to welfare programs each year and around 52% of the annual state budget (~$167 billion) is spent on public education institutions such as K-12 schools, community colleges, and public universities. If California truly needs to cut back on its spending habits, it should rearrange its financial structure rather than targeting the health of its workers. One place to begin this audit is the public higher education system, where billions of dollars are distributed across underattended colleges and universities.

California has two public education systems, the University of California system and the California State University system. The UC system is allocated a total of $10.8 billion annually for 9 campuses. The CSU system, the largest 4-year public university system in the nation, is allocated a total of $8.4 billion for 22 campuses.  Numerous, scattered institutions with less than 10,000 students enrolled are weaker than a set number of strong institutions. The saying, ‘Quality over quantity’ is a phrase that emphasizes the importance of dense unification rather than sparsity. In terms of universities, larger universities with a great amount of resources tend to graduate a larger amount of high success individuals. If America is in desperate need of one thing, it’s in depth education. The way to ensure we provide quality education to students is to form institutions filled with motivated students, faculty/staff, and access to involvement opportunities.

SDSU, a CSU that has more than 41,000 students enrolled, has Division I athletics resources, with numerous professional athletes discovered at SDSU going on to set records and achieve high success in their careers. Larger institutions receive more tuition annually and thus hold more resources to help reach outstanding success amongst their students. Sonoma State, a smaller CSU that has around 5,000 students enrolled, had to eliminate all their offered sports due to budget cuts at the beginning of 2025. They hold a graduation rate around 40%, meaning more than half of their students decide to drop out or transfer to a different institution during their 4 years in undergraduate studies.
We see the same disparities between two UC institutions, one larger and one smaller. UCLA is a highly ranked institution that has over 48,000 students enrolled with powerful alumni who continue to donate to the university. UC Merced has 8,000 students enrolled, and for years now, have taken up the practice of offering admission to students who were denied admission to other UC campuses. This is an example of a great sum of state funds going into an institution that serves only a small community of students that have the access to relocate to a different university for the same price and education.

In California, there are 6 universities part of the CSU system that have less than 10,000 students enrolled. In the UC system UC Merced is recognized as the smallest UC campus. Around 60% of UC Merced students are from the central valley/central coast of California. The students relying on this institution have access to larger institutions with more resources, such as UC Davis, SJSU, and Fresno State which are all within a 1-2 hour drive of each other. California would be able to save $3.4 billion if these institutions were repurposed to be solely online resources rather than full, developed institutions.

The California Community Colleges (CCC System) is given an annual $19 billion to be distributed to its 116 locations across the state. The bottom 50 of these institutions have less than a 10% graduation rate and many large coastal cities have an abundance of community colleges, with overflowing resources. If California were to remove the lowly attended community colleges or resort to 2-3 community colleges per large city, billions of dollars would be saved and we promote the formation of large public institutions that harvest the resources to graduate driven, ambitious students. $8.1 billion is saved opposed to the $5 billion that is being hoped to save from freezing MediCal. If this MediCal freeze continues, then we risk missing out on the work, money, and personal wellbeing of the immigrants that contribute to California’s economy.

Many undocumented immigrants work in California despite facing labor and safety risks such as low pay and undesignated work hours. While they devote their time and safety to providing for Californians, they contribute $8.5 billion annually in state taxes, adding to the state’s GDP. The Pew Research Center confirmed that, “~77% of Americans say undocumented immigrants fill jobs that US citizens do not want,” meaning Americans who voted for officials enforcing the MediCal freeze must understand that our country relies on undocumented immigrants to fill these necessary jobs. Their labor keeps us fed and drives our society forward. During the COVID-19 pandemic, the agriculture and farming industries kept California afloat and 2.7 million Americans working in the healthcare industry deemed the jobs immigrants hold as essential.

Since the MediCal freeze issued on January 1st, 2026, Californians have already seen numerous impacts. The freeze has forced undocumented immigrants to use emergency rooms for primary care which is raising healthcare costs for all Californians. We have also seen a decline in the construction, agriculture, and farming industries, causing a delay in the modernization of buildings and food production/restockage. A slower moving society creates an environment for less productivity and progression toward societal goals.

Freezing MediCal has already had many impacts on all Californians. We rely on the wellbeing and health of immigrants to carry out the services linked to their jobs and contribute greatly to California’s economy. Since Donald Trump was reelected at the end of 2024, there have been many events that violate the rights of immigrants and those who reside in America. During this era, we must question what truly constitutes an American and Californian. Is it merely a matter of a birth certificate, or is it defined by decades of sweat, labor, and vital contribution to our society? If we continue to strip away the rights of those who feed us, we’re saving a buck as well as losing our moral compass.

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