Exclusive: Newsom faces fallout with key health care allies over Medi-Cal

Zoom in: Under Newsom's proposal, undocumented immigrants 19 and older would be entitled to emergency medical and pregnancy care but lose coverage for expenses like prescription drugs, dental care and doctor's visits if they don't enroll before January.

• Starting in 2027, the state would also add a $100 per month premium for adults whose immigration status makes them ineligible for federal Medicaid, including those with legal status.
• Community-facing clinics would see their reimbursement rates cut as part of the plan.

Driving the news: A new open letter, spearheaded by Health Justice Action Fund and St. John's Community Health, blasts Newsom for attempting to "balance the budget on the backs of poor and working Californians" and creating a system that discriminates against immigrants.

• "People will die. That is not political rhetoric, but a grim reality when chronic conditions go unmanaged, emergencies go untreated, and facilities are forced to shutter," the letter states.
• "[O]ur goal is to make sure everyone gets the care they need, but these cuts will make that impossible," Bay Area health care worker Ron Cook told Axios via email.

Threat level: Newsom's proposal would force California health clinics to face a 20% cut in funding on top of the 10% reduction to Medicaid currently making its way through Congress, the letter notes.

• It'd jeopardize 2,300 health service sites and lead to loss of access to primary care, mental health services and life-saving medications for 1.6 million Californians, per the letter.
• Signees include the Bay Area-based North East Medical Services, La Clínica de La Raza, Inc. and Gardner Health Services.

What they're saying: The budget proposal "was kind of a five-alarm fire," St. John's president and CEO Jim Mangia told Axios.

• After California expanded coverage for undocumented immigrants last year, many are finally seeing a doctor, getting their diabetes under control and having their hypertension treated, Mangia said. "The thought of losing it is devastating."

The other side: Newsom's office pointed to remarks he made last month when asked for comment.

• "I don't want to be in this position, but we are in this position. And instead of rolling back the program — meaning cutting people off for basic care — we're capping it," he'd said during his revised budget proposal.
• Newsom has said that Medi-Cal expansion cost the state more than expected — about $8.5 billion from the general fund annually.

Between the lines: Many community health groups supported Newsom in his run for governor, but his White House ambitions have created a rift, with some advocates accusing him of catering to Republicans by targeting immigrants and trying to avoid raising taxes.

• "Everything at this point, unfortunately, is about the political calculation of a presidential campaign, not about what's needed by the people of California," Mangia said.

What we're watching: Mangia acknowledged the reality of the budget deficit but emphasized that the solution lies with revenue, such as increasing corporate taxes.

• The open letter will be printed in a series of paid advertisements and placements in news outlets like the New York Times, Sacramento Bee, San Francisco Chronicle and Politico.
• The $500,000 campaign will also include targeted digital ads to encourage calls to elected officials and petition signatures.
• The coalition plans to meet with state legislators in Sacramento on Monday.

Editor's note: This story has been updated with a response from Newsom's office.