California Governor Gavin Newsom said Wednesday he wants the state to stop enrolling more low-income illegal immigrants in a state-funded health care program, beginning next year.

Under Newsom’s plan, the state would not end coverage for illegal immigrants who are already enrolled in Medi-Cal, the state’s Medicaid program. However, the state would begin charging adults with “unsatisfactory immigrant status” a monthly premium of $100 beginning in 2027.

Newsom’s announcement comes after the governor previously said in March he was not considering rolling back health benefits for low-income illegal immigrants, even as the state contended with a $6.2 billion Medicaid shortfall.

Just last year, the state became among the first to offer free health care benefits to all low-income adults, regardless of immigration status.

Now, Newsom is backtracking as the expansion cost the state $2.7 billion more than his administration had predicted.

Newsom said Wednesday that the move is being made both because of the higher-than-expected cost for the program and the economic uncertainty caused by President Trump’s tariffs.

“The state must take difficult but necessary steps to ensure fiscal stability and preserve the long-term viability of Medi-Cal for all Californians,” the governor’s office said in a statement.

Newsom’s office predicted the proposed changes will save the state $5.4 billion by 2028-2029.

The decision is just the latest example of Newsom moderating on liberal policies he once supported.

Earlier this week, the governor called on cities, towns and counties in the state to ban tent encampments on sidewalks, bike paths, parklands and other types of public property. He offered local governments a template that they can adopt to outlaw homeless encampments and to clear existing ones.