California is set to become the first state to extend health care coverage to young, undocumented immigrants with a $98 million plan that would help some 100,000 low-income people in the state.

The policy is being considered by the state's legislature, and would expand coverage for the state’s Medicaid program — known as Medi-Cal — to those undocumented immigrants between the ages of 19 and 25.

The deal is a bit less ambitious than a previous plan approved in the state Senate to include coverage for immigrants 65 and older. Governor Gavin Newsom has signalled support for expanding coverage for younger immigrants in California, but said the expansion for older undocumented immigrants would be too expensive.

“We will continue to pursue steps towards the Governor’s & Legislature’s shared goal of getting to universal coverage in the next few years,” wrote Anthony Wright, the executive director of the advocacy group Health Access, in a statement posted on Twitter.

Californian politicians are wrestling with how to extend health insurance coverage to everyone in the state, in an effort that could lead to a sweeping expansion to coverage in one of America’s most populous and progressive states.

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The health insurance expansion would also make the state the first to subsidize insurance for middle-income families. That subsidy would make families of four in the state making as much as six times the federal poverty level eligible for $100 a month in help from the government to pay for insurance.

State senator Holly Mitchell, a Democrat who led the budget negotiations, said that she and her colleagues believe that health care should be available to all Californians.

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“California believes that health is a fundamental right,” Ms Mitchell said.

In order to pay for the programme, the state would begin taxing those who are uninsured. The approach is similar to a portion of Barack Obama’s health care law, which was eliminated in 2017 by a tax code overhaul.