California’s Medicaid program is called Medi-Cal, and it remains one of the largest and most operationally complex Medicaid programs in the country. As of December 2025, Medi-Cal had 14.4 million certified eligibles, covering more than one-third of Californians. Enrollment has been trending down from 14.89 million in March 2025 to 14.40 million in December 2025, but the story is not simply shrinking membership. The more important shift is who remains enrolled and what they cost. Managed care still dominates the program, covering 95.3% of members, while the senior and disability mix continues to matter more for cost, care design, and network performance. 

California’s real Medicaid story in 2026 is this: caseload softening does not mean cost relief. State budget analysts note that much of the spending pressure now comes from service utilization, service costs, and provider rates, not just enrollment volume. Pharmacy is a major example. California’s Legislative Analyst says pharmacy has been a key driver behind higher-than-anticipated Medi-Cal spending, with newer specialty anti-inflammatory drugs and diabetes-related drugs, especially GLP-1s and SGLT2 inhibitors, driving a meaningful share of spending growth. The Governor’s 2024–25 Medi-Cal pharmacy estimate rose to $19.4 billion in gross spending, up $1.6 billion, and then was projected to rise another $1.2 billion the following year. 

How Medi-Cal risk adjustment works

For mainstream Medi-Cal managed care, California uses the CDPS+Rx health-based payment model, Version 7.2, for major aid categories including Child, Adult, ACA Expansion, and SPD-LTC. DHCS applies this risk adjustment to “all remaining services” after carving out certain components. California also uses separate methodologies for specialized service categories such as behavioral health treatment (BHT), Community-Based Adult Services (CBAS), long-term care long stays, and Enhanced Care Management (ECM). Not every population is treated the same: for example, SPD-LTC/Full-Dual populations are not risk adjusted with CDPS+Rx in the same way because most costs are Medicare’s liability, and some regions with only one plan do not use the same within-region redistribution logic. In plain English, California’s model is not a simple RAF exercise. It is a multi-layered capitation system with population-specific and service-specific adjustments. 

How quality is defined in California Medicaid

California does not run Medi-Cal quality like Medicare Advantage Stars. The state’s quality framework is owned by the Department of Health Care Services (DHCS) through its 2025 Comprehensive Quality Strategy, its Managed Care Accountability Set (MCAS), CAHPS, and the Quality Withhold and Incentive (QWI) Program. DHCS says QWI aligns with the Comprehensive Quality Strategy and Bold Goals and ties plan payment to performance on key quality, member experience, and equity measures. The withhold program specifically includes measures such as controlling high blood pressure, glycemic control, timeliness of prenatal care, postpartum care, well-child and adolescent well-care visits, childhood and adolescent immunizations, and CAHPS Getting Care Quickly. MCAS goes even broader, including behavioral health follow-up, chronic disease management, cancer screening, and readmission-related measures, with some measures stratified by race and ethnicity. 

What measures matter most right now

If you are designing a California Medicaid strategy in 2026, the highest-signal measures are not random HEDIS picks. They cluster around the state’s real priorities: maternal health, children’s health, behavioral health, chronic disease control, and equity. DHCS’ quality strategy explicitly centers health equity and highlights rising concern around maternal outcomes, with Medi-Cal covering about 40% of births statewide. California is also pushing hard on member engagement, risk stratification, early intervention, and more coordinated transitions. That means the most important quality measures are the ones that sit closest to avoidable utilization and disparity reduction: prenatal/postpartum care, blood pressure control, diabetes management, well-care visits, immunizations, behavioral health follow-up, and timely access/experience measures. 

The trends California plans and providers should be watching

Several California trends deserve executive attention.

First, federal eligibility changes could affect up to two million Medi-Cal members, which means retention, outreach, and community-based enrollment support will matter more, not less. Second, California’s transformation agenda still runs through CalAIM, which means ECM, Community Supports, justice-involved reentry services, and population health management are not side programs; they are central to the state’s operating model. Third, pharmacy pressure is likely to keep growing faster than many organizations’ network strategies can absorb. Fourth, DHCS is steadily increasing accountability around access, quality, equity, and operational performance. This is a program moving toward more integration and more scrutiny at the same time. 

How California should redesign benefits and networks

California does not need a bigger Medicaid benefit story. It needs a better-connected one.

The next wave of Medi-Cal performance will come from integrating the core medical benefit with ECM, Community Supports, behavioral health, maternity pathways, pharmacy management, and local community partnerships. DHCS’ own strategy reflects this direction through population health management, statewide risk stratification, community health assessments, and services like housing transition support, recuperative care, medically tailored meals, and reentry supports. The winning benefit design is one that is clinically disciplined but socially responsive: targeted enough to manage cost, broad enough to prevent avoidable downstream utilization. 

Network redesign should follow the same logic. California Medicaid networks should be built around:

• stronger primary care attribution and access, 
• high-performing maternity and pediatric pathways, 
• tighter behavioral health integration, 
• multilingual access by county and ZIP code, 
• pharmacy affordability controls, 
• and community-based partnerships that actually prevent ER use, readmissions, homelessness-related churn, and postpartum fallout. 

In California, network breadth alone is not a strategy. Operationally integrated, culturally responsive, locally tuned networks are the strategy.