California Proposes $222.4B Medi-Cal Budget — Must Absorb $1.1B+ in Federal Medicaid Shortfalls

California's proposed 2026–27 budget includes $222.4 billion for Medi-Cal, requiring the state to absorb over $1.1 billion in federal Medicaid funding losses from H.R. 1. The Legislative Analyst's Office warns that federal FMAP sunsetting, enrollment verification requirements, and UIS benefit restrictions compound to create a multi-billion-dollar structural gap by 2028. Budget negotiations will determine whether FQHC supplemental payments, ECM funding, and community health worker billing survive or face further cuts.