Illegal immigrants living in taxpayer-funded homeless shelters in San Francisco have undergone sex-change procedures and cross-sex hormone therapy through California's Medi-Cal program, Fox News Digital reported, drawing fresh scrutiny to Gov. Gavin Newsom's decision to extend full Medicaid benefits to residents regardless of immigration status.
Manhattan Institute fellow Chris Rufo filmed encounters with illegal immigrants who identified as transgender outside the shelters. Newsom's office confirmed to Fox News Digital that illegal immigrants receive the same coverage as low-income Californians under Medi-Cal, including access to sex reassignment hormone therapy and surgical procedures.
The state spends roughly $9 billion in taxpayer dollars providing healthcare to illegal immigrants, a figure that includes transgender care, according to the California Department of Health Care Services. Approximately 1.7 million illegal immigrants now receive full-scope coverage through the program. And all of it traces back to January 2024, when Newsom expanded Medi-Cal to cover all immigrants regardless of legal status.
A spokesperson for the governor pushed back on the framing. As Fox News Digital reported, the spokesperson said:
"Undocumented Californians don't get special treatment. Everyone on Medi-Cal gets the same access to care."
The spokesperson added:
"If you want to call California woke for not letting politicians interfere with doctors, or not wanting people to die in the streets, then go ahead."
That framing, casting the issue as equal access rather than a policy choice to extend taxpayer-funded elective procedures to people who entered the country illegally, tells you everything about how Sacramento views the arrangement. The question was never whether legal residents on Medi-Cal can access these services. The question is why people who broke federal immigration law are eligible for the same benefits at all.
The California Department of Health Care Services went further, claiming Rufo's video and reporting contained "significant factual errors and mischaracterizes both Medi-Cal eligibility and covered benefits." DHCS insisted that Medi-Cal is "a needs-based program with strict eligibility requirements" and that gender-affirming care is covered "only when it is medically necessary, based on established clinical standards and consistent with nationally recognized clinical practice guidelines."
A Medi-Cal manual cited in the reporting states that medical intervention is covered when "determined to be medically necessary for the treatment of gender dysphoria." In practice, that standard gives wide latitude to providers, and it applies identically to illegal immigrants and citizens alike, as Newsom's own office confirmed.
The fiscal picture makes the policy even harder to defend. California faces a $21 billion budget deficit for fiscal year 2027. The Medi-Cal expansion to cover illegal immigrants cost the state $2.7 billion more than Newsom's administration had projected, according to National Review. The California Department of Finance projected Medi-Cal coverage for adults with "unsatisfactory immigration status" at $12.5 billion for the current fiscal year.
That overshoot forced an embarrassing reversal. California paused new Medi-Cal enrollment in January for all adults over 19 without legal immigration status. Newsom is now proposing to freeze new enrollment starting next year and charge some adult enrollees a $100 monthly premium beginning in 2027, an implicit admission that the expansion he championed was unsustainable from the start.
The governor, whose national political viability has drawn sharp criticism, tried to frame the pullback in neutral, managerial language. His office said in a statement: "The state must take difficult but necessary steps to ensure fiscal stability and preserve the long-term viability of Medi-Cal for all Californians."
Fiscal stability. That's a curious goal for a governor who signed the expansion in the first place without adequate cost projections.
Newsom himself acknowledged the limits of his own policy. The Washington Examiner reported that Newsom signed a California budget that scales back healthcare benefits for illegal immigrants. The budget prohibits new enrollment, adds a $30 monthly premium in 2027 for enrollees ages 19 to 59, and removes dental coverage in 2026. Newsom said: "While California has prided itself on offering Medi-Cal to many noncitizens, we also put a limit on it."
Putting a limit on it after billions in overruns is not fiscal discipline. It is damage control.
Even as the state bleeds money, Democratic lawmakers in Sacramento have introduced Senate Bill 1422, which would ensure all illegal immigrants in the state receive coverage under Medi-Cal. The bill's status, whether it has been enacted, is pending, or remains in committee, was not specified in available reporting. But its very introduction signals that for some in the legislature, the current spending isn't enough.
The state has already had to borrow more than $3 billion to cover unexpected increases in Medi-Cal expenses, Just The News reported, with the overruns largely attributed to the expansion. California's 2025 budget includes $12.1 billion for Medi-Cal coverage for illegal immigrants. A Public Policy Institute of California poll found 58% of Californians oppose providing healthcare coverage for illegal immigrants in the state, a majority that Sacramento's leadership appears content to ignore.
Assemblyman Carl DeMaio put it plainly: "Why are you doing it? So you can give $12.1 billion in a gift of public funds to illegal immigrants, prioritizing illegal immigrants over your own citizens."
Republican state Senate leader Brian W. Jones was equally direct after Newsom announced the enrollment freeze. Newsmax reported his response: "We warned him." The state's Legislative Analyst's Office estimated the new rules could push about 1 million immigrants off Medi-Cal rolls through mid-2030 and save $10.6 billion.
That projected savings tells its own story. If removing a million enrollees saves $10.6 billion, the per-person cost of the program is staggering, and every dollar of it comes from California taxpayers already struggling with the highest cost of living in the continental United States.
White House Communications Director Steven Cheung responded on X, calling the situation "the holy trinity of woke, liberal, out-of-touch, perverse ideology" from Newsom. The language was sharp, but the underlying point, that California is using public money to fund elective medical procedures for people who are in the country illegally, while running a $21 billion deficit, is not easily dismissed.
Newsom has faced a pattern of criticism over misplaced priorities. He jetted off to a Munich security conference while California dealt with wildfires and homelessness. He signed international energy deals while gas prices squeezed California families. And now his signature healthcare expansion, the one he sold as compassionate governance, has blown past its budget, forced an enrollment freeze, and exposed a program that funds sex-change operations for people who shouldn't be in the country in the first place.
DHCS insists the coverage is limited to what is "medically necessary." But "medically necessary" is doing an enormous amount of work in that sentence. The Medi-Cal manual states that intervention qualifies when it alleviates symptoms of gender dysphoria. That clinical standard, applied without regard to immigration status, means California taxpayers are on the hook for procedures that most Americans would consider elective, for recipients who have no legal right to be here.
Newsom's office says illegal immigrants "don't get special treatment." That's technically true. They get the same treatment as citizens. And that is precisely the problem. A governor who has drawn fire for policy decisions that hurt California taxpayers chose to extend full medical benefits, including transgender surgical procedures, to people who entered the country illegally, then watched the costs spiral past every projection his administration offered.
Key questions remain. How many illegal immigrants have actually undergone these procedures through Medi-Cal? On what dates? At which facilities? The reporting does not provide those numbers, and neither Newsom's office nor DHCS offered them. That silence is itself telling. If the numbers were small and the costs negligible, Sacramento would have every incentive to say so.
Instead, the governor's team fell back on process language, "strict eligibility requirements," "established clinical standards," "medically necessary", while confirming the core fact: illegal immigrants in California can and do access sex reassignment procedures on the taxpayer's dime.
The broader Newsom political brand has long leaned into progressive social policy as a badge of honor. But there is nothing progressive about borrowing billions to fund a program that most of your own constituents oppose, then scrambling to freeze enrollment when the bill comes due.
California's taxpayers didn't vote for this. A majority actively oppose it. And the governor who signed it into law is now quietly trying to limit the damage, while his allies in the legislature push to expand it further.
When the people paying the bills say stop and the politicians keep spending, that's not compassion. That's contempt.
