Lawmakers and DHCS spar over May Revision Medi‑Cal cuts as public voices opposition

Assemblymember Dawn Addis, chair of the Assembly Budget Subcommittee No. 1 on Health, convened a hearing to review the governor's May Revision proposals affecting Medi‑Cal and other health programs, drawing sustained public comment and sharp questioning from legislators.

The May Revision proposes roughly $12 billion in general‑fund solutions and identifies the Medi‑Cal program as a major target for reductions and cost controls. "We are making decisions that shape real lives," Addis told the room as she opened the hearing.

Why it matters: Medi‑Cal is California's largest health program; witnesses at the hearing said it covers about "just under 15,000,000 Californians." Committee members and advocates warned that proposals in the May Revision would concentrate burdens on low‑income Californians, older adults, people with disabilities and people without satisfactory immigration status.

Key proposals described by DHCS

Michelle Voss, introduced in testimony as director of the Department of Health Care Services, outlined the department's May Revision package and the administration's rationale for the proposals. Her overview included: - A proposed freeze on new enrollment for the state's full‑scope, state‑only Medi‑Cal expansion for adults 19 and older with "unsatisfactory immigration status," effective no sooner than Jan. 1, 2026. DHCS estimated that the freeze would reduce new enrollees by 32,000 in the budget year and accumulate to 672,000 by budget year plus three if continued. - A proposed $100 monthly premium for adults 19 and older in that same population, to take effect no sooner than Jan. 1, 2027; DHCS included $30 million in contractor costs in the budget year to build premium‑collection systems and cited net savings of about $1.1 billion in the year following implementation due to disenrollments and premium revenue. - Elimination of full‑scope dental and long‑term‑care benefits for the same population (dental elimination effective July 1; long‑term care effective Jan. 1), and termination of certain wrap (PPS) payments to FQHCs/RHCs for that population. - Pharmacy‑focused changes: a rebate aggregator to capture supplemental drug rebates for the state‑only population (targeting about $5 billion in general‑fund savings across proposals), removal of certain optional drug classes (over‑the‑counter vitamins and tests), the exclusion of GLP‑1 drugs when prescribed for weight loss, and expanded utilization management including prior authorization and step‑therapy protocols. - Reinstatement of the Medi‑Cal asset test (resources counted at $2,000 for a single adult and $3,000 for a couple) no sooner than Jan. 1, 2026; DHCS estimated roughly $94 million general‑fund savings in the budget year. - Elimination of the acupuncture optional benefit (savings of about $5.4 million in 2025 and $13.1 million ongoing) and authority to implement utilization management for outpatient hospice services; suspension of the skilled‑nursing facility workforce and quality incentive program (WQIP) and the temporary pause of the SNF backup power requirement until dollars are appropriated.

Skepticism from the Legislative Analyst's Office and questions from lawmakers

Jason Constanturos of the Legislative Analyst's Office told the committee the LAO had identified three focal points for the Medi‑Cal review: (1) the size and drivers of revised Medi‑Cal spending estimates, (2) the design and distributional effects of the proposed budget solutions, and (3) shifting federal policy and regulatory uncertainty.

The LAO and multiple legislators urged DHCS to model alternatives to broad proposals such as a flat $100 premium and an outright enrollment freeze. "This feels like a very blunt approach," one legislator said, pressing the department for finer modeling and the assumptions behind its scoring.

Department of Finance perspective

Megan Sabah of the Department of Finance said the May Revision assumes significant baseline growth in Medi‑Cal costs that outpace revenue and noted this is the third consecutive deficit budget for the state. Finance officials characterized many of the Medi‑Cal proposals as difficult but intended to preserve overall coverage rather than make large eligibility changes to the encompassed population.

Stakeholder and public comment

More than four dozen speakers representing labor, provider groups, advocacy organizations and individual Medi‑Cal beneficiaries spoke during a lengthy public‑comment period. Common objections included opposition to the enrollment freeze for undocumented adults, the $100 monthly premium, reinstating the asset test, elimination of dental and long‑term‑care benefits for adults 19 and over in the state‑only population, and cuts to supplemental payments that support clinics and family‑planning providers.

Planned Parenthood affiliates, the California Primary Care Association, FQHCs, dental associations and county behavioral‑health directors all warned that the combined package could force clinic closures or reduce services. Multiple speakers noted that cutting state supplemental payments can also reduce federal matching dollars that flow to the state.

Points of process and next steps

Committee members repeatedly asked DHCS for more detailed modeling of the proposals'distributional and fiscal effects and pressed for alternatives that target resources more precisely. LAO staff recommended that if the legislature seeks to change a proposal substantially, legislators should pair any change with offsets of comparable size elsewhere in the budget.

The subcommittee paused the evening after the Medi‑Cal discussion and scheduled deeper review of the Proposition 35 spending plan and Proposition 56 funding that followed on the agenda.

Ending

Lawmakers said they expect more detailed modeling from the administration and the LAO before agreeing to final budget tradeoffs. Members and dozens of public commenters urged the committee to seek alternatives that reduce harm to low‑income Californians, older adults and reproductive‑health providers while addressing the state's fiscal gap.