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Fight over How to Pay for Medi-Cal Puts Pressure on Newsom to Raise Taxes

Newsom opposes a union-backed wealth tax to fund Medi-Cal after federal cuts, while about 522,000 Californians face coverage loss in 2026-2027, advocates warn.

  • On Jan. 14, 2026 Gov. Gavin Newsom faced advocates rallying at the state Capitol pressing leaders to backfill federal funding cuts and urged proponents to drop the union-backed wealth-tax push.
  • Federal changes last year cut California's federal funding, and analysts project about 522,000 Californians will lose Medi‑Cal coverage in the 2026-2027 fiscal year.
  • The union's proposal would impose a one-time 5% levy, with the Service Employees International Union–United Healthcare Workers West collecting nearly 900,000 signatures to qualify for the November ballot.
  • Newsom's budget omitted backfill funds and the state began freezing new Medi-Cal enrollment for undocumented immigrant adults; health advocates and progressive lawmakers say they will press Gov. Gavin Newsom and California Legislature to replace federal funding.
  • The dispute could shape the 2026 legislative session and midterm elections and may divide Democrats, while Gov. Gavin Newsom's ties to tech titans including Larry Page and Sergey Brin matter as he eyes a presidential run this year.
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The fight over how to pay for Medi-Cal puts pressure on Newsom to raise taxes

California health care advocates, labor unions and progressive lawmakers are urging the governor and the Legislature to find new money to fund medical care and...

·Austin, United States
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Cal Matters broke the news in Sacramento, United States on Thursday, January 15, 2026.
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