Over 2 million Californians, and possibly hundreds of thousands more, could either lose or be denied health coverage under the budget policy changes proposed by Governor Arnold Schwarzenegger to close California’s $21 billion budget deficit.1 In particular, a central plank of the Governor’s budget proposal is to undo the efforts of the past decade to expand health coverage, since 1999. Since any action to undo eligibility and enrollment in Medicaid would disqualify California from getting billions of increased Medicaid dollars under the terms of economic recovery package (the American Reinvestment and Recovery Act of 2009 or “ARRA”), Governor Schwarzenegger is asking the federal government for a “waiver” to the “maintenance of effort” requirement in ARRA. While the cuts are not specifically detailed in the May Revise document, the cuts being discussed would result in hundreds of thousands of Californians losing coverage.