Medi-Cal faces funding shortfall: 3 things to know

California Gov. Gavin Newsom is asking lawmakers for an additional $2.8 billion to fund the state’s Medicaid program through the end of the year, Politico reported March 17. 

The request comes after Mr. Newsom proposed a $3.4 billion loan to cover Medi-Cal costs through the end of March, the outlet reported. 

Here are three things to know: 

1. The largest source of the shortfall is coverage for undocumented immigrants, according to Politico. Coverage for this population has cost $2.7 billion more than California estimated. 
   
2. Rising prescription drug costs are also contributing to the funding gap. Prescription drug costs, including Ozempic and other GLP-1 drugs, have cost $540 million more than the state budgeted for. 
   
3. For 2025-26, Mr. Newsom is proposing an 11.8% increase in Medi-Cal spending. Pharmacy costs are expected to increase by $215 million during that time period, according to Politico. 

Read more here.

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