Gavin Newsom to slash health benefits for illegal immigrants, moves to clear California homeless camps

California Governor Gavin Newsom is moving to scale back health insurance for illegal immigrants in the state and clear out homeless encampments statewide.

Per the New York Times, Newsom is set to call for the freezing of Medi-Cal enrollments for illegal immigrant adults in a Wednesday budget presentation, which would take place as soon as January. He is also reportedly seeking to charge those who remain with the state version of Medicaid $100 per month starting in 2027.

Newsom has estimated that these moves would save the state $5.4 billion by fiscal year 2028-29. This comes as the state faces a budget deficit in 2025. Newsom has partially blamed the budget woes on a $16 billion drop in tax revenue from the trade turbulence experienced under Trump. Newsom has referred to these impacts as a "Trump Slump."

The outlet noted that Medi-Cal has been spending billions more than expected by California leaders when they made the program available to all low-income residents last year, regardless of immigration status. 

Newsom said in a statement, "The state must take difficult but necessary steps to ensure fiscal stability and preserve the long-term viability of Medi-Cal for all Californians."

On Monday, Newsom revealed a model ordinance for cities and counties across the state to "immediately address dangerous and unhealthy encampments and connect people experiencing homelessness with shelter and services," per Fox News. Newsom called on local governments to "act without delay."

Newsom said in a news release, "There’s nothing compassionate about letting people die on the streets."

The ordinance is backed in part by $3.3 billion in Prop 1 funding. His office said that the model ordinance draws from the state’s "proven and workable approach," which, between July 2021 and May 2025, cleaned up over 16,000 encampments and over 311,873 cubic yards of waste from sites that lie along the state right-of-way. 

"These results demonstrate that the policy is both effective and scalable, offering a sound, adoptable framework for jurisdictions to resolve encampments with urgency and dignity," Newsom said.