Governor Gavin Newsom recently released his 2026-27 May Revision of the state budget proposal.i After reviewing the plan, AJSOCAL is encouraged by some of the positive decisions around healthcare delivery, while deeply concerned about access and eligibility. We believe the following three items will be integral to ensuring Medi-Cal serves its intended purpose as a safety net and delivers healthcare to Californians in need.
- Medi-Cal Premiums – Proposed Monthly Increase for Enrollees with Unsatisfactory Immigration Status (Ages 19-59) from $30 to $50
As previously referenced in our analysis of the CA Senate Democrats’ Budget proposal,ii research shows that premiums have a harmful impact on low-income enrollees. Kaiser Family Foundation compiled a list of 35 different studies that have all shown that even modest premiums are a barrier to accessing and maintaining Medicaid coverage.iii Most notably, when the state of Indiana required premiums of as little as one dollar, 55% of members missed a payment.iv
The state of California knows this, with the Legislative Analyst’s Office describing the proposed Medi-Cal premiums as follows: “While there is some additional revenue anticipated as a result of the premium, the majority of the savings in the budget solution are estimated to be due to disenrollments from Medi-Cal by individuals who do not pay the monthly premium.”v
If the goal is for “California to step in to help keep coverage affordable,”vi premiums for Medi-Cal enrollees are directly opposed to that goal. To “keep coverage affordable,” AJSOCAL unequivocally opposes all Medi-Cal premiums.
- Lowering Medi-Cal Asset Test Limit: $2,000 limit for individuals or $3000 for couples
Asset limits penalize savings and are counterproductive to the goal of helping families achieve economic stability. They force struggling families to choose between savings that are necessary for their economic stability and maintaining their health coverage. While some assets are exempt from the limit, many of these exempt assets are property, such as the house the enrollee lives in.vii
This has the impact of exacerbating both racial health disparities and racial wealth gaps since, when adjusting for income, AAPIs and other people of color are less likely to own a home than white Americans.viii This impact on home ownership is even more pronounced for limited English proficient individuals.ix
Further, even among those enrollees who own a home, $2000 is often not enough to cover property taxes, homeowners’ insurance, and everyday necessities. Especially in areas such as Santa Clara County, where the median property tax paid is over $10,000,x the asset limit puts seniors and people with disabilities at risk of losing their homes and being institutionalized.
When factoring in the cost of expensive institutionalization, imposing this asset limit on Medi-Cal enrollees will have the result of disqualifying families in need while providing minimal cost savings. As such, AJSOCAL strongly believes this limit should be rejected.
- Transition of Enrollees with Unsatisfactory Immigration Status to Fee-for-Service Medi-Cal
Due to the changes under HR 1, the state of California will no longer receive matching federal funds to support the Medi-Cal coverage of many immigrants. To save on costs, the Governor proposes transitioning these Medi-Cal enrollees to a fee-for-service Medi-Cal delivery system.
In the current managed care delivery system, the state Medi-Cal agency contracts with health insurance companies to deliver care,xi but in a fee-for-service delivery system, the state Medi-Cal agency would directly pay health care providers for services provided to enrollees.
This change from a managed care to a fee-for-service delivery system will maintain critical coverage for immigrants, AAPI and non-AAPI alike, while also saving approximately $1.5 billion on an ongoing basis. AJSOCAL strongly recommends that the cost savings from this transition be leveraged and reinvested into our Medi-Cal system.
What This Means for AAPI Communities
The Governor’s May Revision of the state budget is a mixed bag of disastrous cuts to health access for the most vulnerable Californians and some innovative savings strategies.
AJSOCAL urges serious consideration of the impact of severe cuts to the health of immigrants, older adults, people with disabilities, and the overall stability of the healthcare system. AAPIs made the largest gains in healthcare coverage of any racial or ethnic group since the Affordable Care Act was enacted, with the uninsured rate decreasing 63% between 2010 and 2022xii because AAPIs believed in the promise of the ACA: that no one should have to choose between their health and their financial security.
As the 2026-2027 budget is finalized, state leaders have the choice to preserve healthcare access by (1) seeking new, innovative revenue sources and (2) redirecting savings from one part of the Medi-Cal program toward other parts of the Medi-Cal program. We look forward to working in partnership with state leaders to continue honoring the promise of affordable healthcare in California.
[1] Governor Gavin Newsom. Governor’s Budget Summary 2026-27 (May 2026). https://ebudget.ca.gov/2026-27/pdf/Revised/BudgetSummary/FullBudgetSummary.pdf
[2] Asian Americans Advancing Justice Southern California. AJSOCAL Strongly Supports the CA Senate Democrats’ 2026-2027 State Budget Proposal. (April 2026).
[3] Samantha Artiga, Petry Ubri and Julia Zur. The Effects of Premiums and Cost Sharing on Low-Income Populations: Updated Review of Research Findings. Kaiser Family Foundation (Jun 2017). https://www.kff.org/medicaid/the-effects-of-premiums-and-cost-sharing-on-low-income-populations-updated-review-of-research-findings/
[4] The Lewin Group. Healthy Indiana Plan 2.0: POWER Account Contribution Assessment, Prepared for Indiana Family and Social Services Administration. (March 2017). https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Waivers/1115/downloads/in/Healthy-Indiana-Plan-2/in-healthy-indiana-plan-support-20-POWER-acct-cont-assesmnt-03312017.pdf
[5] Legislative Analyst’s Office. The 2025-26 California Spending Plan: Health. (October 2025). https://lao.ca.gov/Publications/Report/5075
[6] Governor Gavin Newsom. California 2026-27 Budget: May Revise Factsheet. (May 2026). https://www.gov.ca.gov/wp-content/uploads/2026/05/May-Revise_Factsheet.pdf
[7] California Department of Health Care Services. Asset Limit Frequently Asked Questions. (2026). https://www.dhcs.ca.gov/Medi-Cal/Pages/Help/asset-limits-faqs.aspx
[8] Jung Hyun Choi and Daniel Pang. More Asian Americans Are Becoming Homeowners, but They Still Face Barriers in the Housing Market. Urban Institute. (June 2021). https://www.urban.org/urban-wire/more-asian-americans-are-becoming-homeowners-they-still-face-barriers-housing-market
[9] Marc-André Luik, Max Friedrich Steinhardt and Simon Voss. (2025). Language proficiency and homeownership: Evidence from U.S. immigrants. Journal of Housing Economics (68) 102067. https://doi.org/10.1016/j.jhe.2025.102067
[10] Valerie Bauman. California State Taxes: What You’ll Owe in the 2026 Tax Season. AARP. (March 2026). https://www.aarp.org/states/california/state-tax-guide/
[11] California Department of Health Care Services. Medi-Cal Managed Care Plan Model Fact Sheet. (2024). https://www.dhcs.ca.gov/services/Documents/MMCD/MMCD-Model-Fact-Sheet.pdf
[12] Office of the Assistant Secretary for Planning and Evaluation. Health Insurance Coverage and Access to Care Among Asian Americans, Native Hawaiians, and Pacific Islanders: Recent Trends and Key Challenges. (June 2024). https://aspe.hhs.gov/sites/default/files/documents/67b359ac50cd67e2f1000013be0e4737/aspe-coverage-access-aanhpi-ib.pdf
[13] Office of the Assistant Secretary for Planning and Evaluation. Health Insurance Coverage and Access to Care Among Asian Americans, Native Hawaiians, and Pacific Islanders: Recent Trends and Key Challenges. (June 2024). https://aspe.hhs.gov/sites/default/files/documents/67b359ac50cd67e2f1000013be0e4737/aspe-coverage-access-aanhpi-ib.pdf