During Trump’s first term, congressional Republicans proposed slashing Medicaid funding, though the measure did not clear the U.S. Senate. Had it passed, “California would have lost tens of billions of federal dollars,” Lucia said. Should the Trump administration go after the program on a similar scale in 2025, California wouldn’t be able to fill the resulting revenue hole with state funds.

About 350,000 health care employees, most of them people of color and women, are projected to see an annual average increase of $6,400 in the first year of the policy, according to an analysis by the UC Berkeley Labor Center. In earlier estimates, the labor center calculated up to 426,000 people would be impacted, but that figure included workers at skilled nursing facilities who are currently not covered by the law, according to Laurel Lucia, who directs the center’s health care program.

“We estimated that nearly half of low wage health care workers are enrolled in a public safety net program or their family members are enrolled which just underscores how low some of these wages have been,” Laurel Lucia said.

“There has been a lot of economic research [about whether] hospitals try to set their commercial prices based on shortfalls from public payers. That research has failed to find evidence of that,” Laurel Lucia says.

“Increases in the state minimum wage have never been paused,” and the delay is “very unusual,” said Ken Jacobs.

Labor unions usually push for wage hikes on behalf of their members. In California, only about 18% of workers are covered by a union contract. The health care minimum wage, Lucia said, helps level the field for health workers who do not participate or benefit from labor negotiations.

“Government payments are the main source for helping to defray providers’ costs for care to the uninsured, and those government payments are ultimately funded by taxpayers,” said Laurel Lucia, health care program director at University of California, Berkeley Center for Labor Research and Education Center, which provides research and policy information.

About 426,000 people statewide — or about 36% of the health care workforce — will benefit from the minimum wage hike, said Laurel Lucia, who directs the health care program at the UC Berkeley Labor Center.

The UC Berkeley Labor Center estimates the cost to the state to be much lower. Total health spending in California would increase by about $2.7 billion because of the law, but the state would be responsible only for a fraction of that, according to the Labor Center’s analysis.

“There’s a lot of waste in our health care system right now and there are opportunities to reduce administrative spending or increase the use of preventive care.” Laurel Lucia said.