This week, the Legislature advanced its own version of the state budget in a suite of bills that take critical steps toward shoring up health care across California.
In their version, lawmakers pushed back on Gov. Newsom’s May proposal to implement provisions of last year’s One Big Beautiful Bill Act (OBBBA) as soon as the 2026-27 fiscal year. With significant changes to Medi-Cal coverage and the largest federal funding cuts in history, OBBBA created great uncertainty for the 15 million Californians who rely on the program for health care.
This two-party agreement (Assembly and Senate Democrats) — which would delay the governor’s proposed cuts to dental coverage and clinic care, lower Covered California insurance premiums, and reject both higher Medi-Cal qualification limits and higher premiums to be paid by undocumented individuals — makes clear that California’s leaders prioritize the health and well-being of the state’s residents. Combined with delays in changes to Medi-Cal coverage for Californians with unsatisfactory immigration status, the Legislature’s budget agreement signals a clear desire to protect California’s most vulnerable.
While some challenges — such as how the state will continue to care for asylees, immigrants, and those with unsatisfactory immigration status — will not be resolved under the Newsom administration, CHA has already begun laying the advocacy foundation for future efforts.
The positive news for hospitals: The not-yet-final budget package would also allocate $250 million from the General Fund for 2026-27 to support California’s public hospital systems, in addition to $190 million to financially distressed hospitals. These funds are desperately needed to ensure hospitals can continue caring for their communities.
As negotiations between lawmakers and the governor pick up urgency ahead of the June 30 budget deadline, CHA will work to ensure hospitals’ voices are heard on key provisions — such as a lack of investment in fee-for-service rates despite a growing volume of patients, the imposition of a software tax that would dramatically increase hospitals’ operating expenses, and the diversion of voter-approved funding to support Medi-Cal providers — that would strip funding away from hospitals right when they need it most.
California’s health care system is facing significant challenges — but this legislative proposal offers a path toward stabilizing the field that patients rely on in their most vulnerable moments.
