Gov. Gavin Newsom’s Department of Finance on Wednesday notified state lawmakers that California will need a $3.44 billion loan to cover costs associated with the state’s Medicaid program known as Medi-Cal.
The letter did not specify why exactly the program fell short on funds. While experts note there are many factors that go into Medicaid costs, some are pointing to the money the state spends providing health insurance to undocumented people.
The letter comes weeks after Newsom’s administration officials told lawmakers they had underestimated the cost.
During a line of questioning in an Assembly budget hearing last month, Assemblyman Carl DeMaio, R-Riverside, asked about the expense. Newsom’s Department of Finance said the state is estimated to spend $9.5 billion to provide Medi-Cal to undocumented people, with $8.4 billion coming from the state’s general fund. The number had grown from the $6 billion that was initially projected.