San Diego, December 30, 2025
California Governor Gavin Newsom has introduced key changes to health care policies affecting Medi-Cal enrollment, dental coverage for undocumented immigrants, and prescription drug pricing. Starting January 1, 2026, an asset test will be reinstated for Medi-Cal eligibility, potentially limiting healthcare access for vulnerable populations. Additionally, dental coverage for undocumented adults will be restricted to emergency services from July 1, 2026. These reforms aim to address the state’s budget deficit while maintaining healthcare accessibility for residents.
San Diego, California – Governor Newsom’s Health Care Policy Shifts Impacting Californians
Governor Gavin Newsom has recently implemented significant changes to California’s health care policies, affecting Medi-Cal enrollment, dental coverage, and prescription drug pricing. These adjustments aim to address the state’s budget deficit while striving to maintain health care access for residents.
Changes to Medi-Cal Enrollment and Coverage
Starting January 1, 2026, California will reinstate an asset test for Medi-Cal eligibility. Adults over 65, individuals with disabilities, and those in nursing homes will be subject to asset limits of $130,000 for individuals and $195,000 for couples. This policy shift may impact access to health care for some residents.
Additionally, beginning July 1, 2026, the state will end full-scope dental coverage for undocumented immigrants aged 19 and older, limiting coverage to emergency dental care. Children and pregnant individuals will continue to receive full dental coverage regardless of immigration status.
Prescription Drug Pricing Reforms
Governor Newsom signed Senate Bill 41 into law on October 11, 2025, aiming to reduce prescription drug prices by regulating pharmacy benefit managers (PBMs). The law prohibits predatory practices by PBMs that contribute to rising drug costs and the closure of neighborhood pharmacies.
Background and Context
These policy changes are part of a broader effort to address California’s estimated $12 billion budget deficit. The state has faced challenges in managing the costs associated with expanding health care coverage, particularly for undocumented residents. The reinstatement of the Medi-Cal asset test and the reduction in dental coverage for undocumented adults are measures intended to curb expenditures while attempting to balance the need for accessible health care.
Despite these adjustments, the state continues to explore ways to provide affordable health care to all residents, including efforts to cap insulin costs and regulate PBMs to lower prescription drug prices.
Frequently Asked Questions (FAQ)
What is the Medi-Cal asset test, and how does it affect eligibility?
The Medi-Cal asset test evaluates the value of an individual’s assets, such as bank accounts and property, to determine eligibility for the program. Starting January 1, 2026, adults over 65, individuals with disabilities, and those in nursing homes will be subject to asset limits of $130,000 for individuals and $195,000 for couples. This means that if an individual’s assets exceed these limits, they may be ineligible for Medi-Cal coverage.
Who will be affected by the reduction in dental coverage for undocumented adults?
Beginning July 1, 2026, undocumented adults aged 19 and older will have their dental coverage limited to emergency services only. This change will not affect children and pregnant individuals, who will continue to receive full dental coverage regardless of immigration status.
What is Senate Bill 41, and how does it impact prescription drug pricing?
Senate Bill 41, signed into law on October 11, 2025, regulates pharmacy benefit managers (PBMs) to prevent practices that contribute to rising prescription drug prices and the closure of neighborhood pharmacies. The law aims to make prescription drugs more affordable for Californians by curbing these practices.
Why are these health care policy changes being implemented?
These changes are part of California’s efforts to address an estimated $12 billion budget deficit. The state is implementing measures to reduce expenditures while striving to maintain accessible health care for residents.
Key Features of the Health Care Policy Changes
| Policy Change | Effective Date | Details |
|---|---|---|
| Reinstatement of Medi-Cal Asset Test | January 1, 2026 | Adults over 65, individuals with disabilities, and those in nursing homes will be subject to asset limits of $130,000 for individuals and $195,000 for couples to determine Medi-Cal eligibility. |
| Reduction in Dental Coverage for Undocumented Adults | July 1, 2026 | Undocumented adults aged 19 and older will have dental coverage limited to emergency services only; children and pregnant individuals will continue to receive full dental coverage regardless of immigration status. |
| Implementation of Senate Bill 41 | October 11, 2025 | Regulates pharmacy benefit managers (PBMs) to prevent practices that contribute to rising prescription drug prices and the closure of neighborhood pharmacies, aiming to make prescription drugs more affordable for Californians. |
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