Considering Medi-Cal in the Midst of a Changing Fiscal and Policy Landscape

Oct 24, 2025 - In July 2025, Congress passed and the President signed H.R. 1 —titled the One Big Beautiful Bill Act. This legislation includes about $1  trillion in federal Medicaid reductions over ten years, representing the most significant changes to federal Medicaid policy since the ACA.
https://lao.ca.gov/Publications/Report/5083

The 2026-27 Budget: Medi-Cal Fiscal Outlook

Nov 19, 2025 - Pursuant to state law, most of the decline in revenue will affect supplemental payments to private hospitals, with only a portion (around 25  percent) resulting in less money for existing Medi ‑Cal costs.
https://lao.ca.gov/Publications/Report/5092

The 2025-26 Budget: Overview of the Governor's Budget

Jan 13, 2025 - The reason for the reduction is the recent voter approval of Proposition  35 (2024), which requires the state to spend less MCO tax money on offsetting General Fund spending and more money on provider rate increases.
https://lao.ca.gov/Publications/Report/4951

The 2026-27 Budget: Department of Developmental Services

Mar 13, 2026 - Under S B  3 , the statewide minimum wage will continue to increase by up to 3.5  percent each year, depending on inflation. In recent years, the cumulative cost of annual minimum wage increases under S B  3 have represented about 5  percent to 10  percent of General Fund spending on services purchased for DDS consumers.
https://lao.ca.gov/Publications/Report/5157

The 2025-26 Budget: Medi-Cal Fiscal Outlook

Nov 20, 2024 - This is because the measure requires the state to use more MCO tax money to increase Medi-Cal services, rather than to offset General Fund spending. The exact fiscal impact depends on how the state implements the measure ’s complex rules.
https://lao.ca.gov/Publications/Report/4941

The 2026-27 Budget: Medi-Cal Analysis

Mar 2, 2026 - DHCS also states that complying with this federal request may qualify California for an up to three ‑year transition period to make the fee more proportionate. Federal Rules Continue to Emerge, Creating Some Uncertainty for Structuring Provider Taxes.
https://lao.ca.gov/Publications/Report/5146

The 2025-26 California Spending Plan: Health

Oct 16, 2025 - To support the fund, the legislation allocates a portion of money from excess balances in health plans ’ special abortion accounts. Health plans that participate in Covered California must use these accounts so that federal subsidies do not pay for abortion services.
https://lao.ca.gov/Publications/Report/5075

The 2025-26 Budget: Medi-Cal Pharmacy Spending

Apr 3, 2025 - In 2023 ‑24, we estimate these rebates comprised 3  percent of gross spending, up from as low as 1  percent in some years. This increase was expected following the switch to the Medi ‑Cal Rx system in 2022.
https://lao.ca.gov/Publications/Report/5026

The 2024-25 Budget: The MCO Tax Package at May Revision

May 22, 2024 - These augmentations were expected to cost $2.7  billion MCO tax funds at full implementation (when the tax was estimated at the time to raise between $5  billion and $5.4  billion annually in net revenue).
https://lao.ca.gov/Publications/Report/4905

The 2025-26 Budget: CalAIM Enhanced Care Management and Community Supports Implementation Update

Mar 6, 2025 - As discussed above, DHCS had estimated that between 3  percent and 5  percent of Medi ‑Cal MCP members were eligible for the ECM benefit. While the ECM benefit is intentionally targeted at a small subset of the overall Medi ‑Cal population, the take up appears to be between about one ‑third and one ‑quarter of those eligible for services.
https://lao.ca.gov/Publications/Report/5003