California Secures $3.44 Billion Loan to Address Rising Medi-Cal Expenses
A state senator has stated that Republican lawmakers will insist on a comprehensive hearing to determine how the funds will be allocated.
This month, California borrowed $3.44 billion to cover cost overruns for its state-funded healthcare initiative, as reported by the finance department on March 12.
This loan has faced backlash from some legislators who attribute the state’s financial woes to its decision last year to cover healthcare costs for undocumented immigrants.
However, Governor Gavin Newsom’s office contends that this assertion is misleading.
“This situation is not unprecedented—as detailed in the Governor’s January budget proposal, extra funding is required to sustain Medi-Cal,” a spokesperson for Newsom communicated via email to The Epoch Times on Thursday. “Increasing Medicaid expenses pose a nationwide challenge, impacting states across the political spectrum. This is not solely a California issue.”
The program aims to deliver free health coverage to approximately 764,000 individuals via the state’s Medi-Cal system, at an anticipated annual cost of $2.7 billion starting in 2024.
Related Stories
The significant rise of undocumented immigrants entering the United States during President Joe Biden’s administration has coincided with new state legislation enhancing government-funded healthcare plans to include them.
A representative from the Federation for American Immigration Reform (FAIR), an organization advocating for modifications to U.S. immigration policy, stated that California’s escalating expenses related to Medi-Cal showcase the high cost of providing services to undocumented immigrants.
“This illustrates that initiatives by California and other states to accommodate undocumented immigrants carry a significant financial burden,” FAIR spokesman Ira Mehlman informed The Epoch Times. “This also indicates that various essential needs in those regions remain neglected.”
According to Mehlman, California’s program serves as a magnet drawing more individuals to the state illegally, further straining its dwindling tax revenue.
“There are numerous critical problems in California that could be addressed with the $3.4 billion,” Mehlman remarked.
A letter dispatched on Wednesday by Chief Deputy Director Erika Li from the California Department of Finance to the Legislature disclosed that a request for a Medical Providers Interim Payment Fund loan of $3.44 billion was sanctioned on March 4.
The California State Senate Budget and Fiscal Review Committee reviews Gov. Gavin Newsom’s budget proposal in Sacramento, Calif., on Jan. 23, 2024.Travis Gillmore/The Epoch Times
Li indicated that the loan, drawn from the state’s general fund, was authorized “to enable the Department of Health Care Services to fulfill essential payments.”
This funding is crucial to offset Medi-Cal costs that surpassed the state’s authorized budget for 2024.
She elaborated that the Department of Health Care Services could utilize the loan to compensate various Medi-Cal service providers.
The news of the loan caught some legislators off guard on Wednesday.
Republican Senate Leader Brian Jones criticized the lack of transparency surrounding the loan.
“True to the secretive nature of the Newsom Administration, they subtly released a troubling announcement about a $3.44 billion loan aimed at funding free healthcare for undocumented immigrants,” Jones commented on social media platform X on Wednesday. “This loan is sourced from taxpayer funds intended for healthcare providers. This program has spiraled out of control.”
California State Sen. Brian Jones attends the 2024 CAGOP convention in Burlingame, Calif., on May 17, 2024.John Fredricks/The Epoch Times
Jones also mentioned that senators will request a complete hearing and thorough cost evaluation to ensure the public understands precisely how their tax dollars are being utilized.
Republican Assemblyman Bill Essayli from Corona expressed that the program is financially straining the state.
