Thousands of undocumented children living in California will be able to sign-up for health care coverage beginning next spring. The new program is part of a state budget deal announced Tuesday.

The budget deal provides an initial $40 million to provide Medi-Cal coverage to 170,000 California children living in the country illegally. The governor’s office projects the program will cost more than $130 million a year going forward.  

Democratic Sen. Ricardo Lara is spearheading the effort to extend health care to undocumented immigrants in California.

"I think this modest investment in health care will be transformational in the lives of not only kids but the families," he says. "And it will also allow us to save hundreds of millions of dollars in very limited care that we currently spend now in our emergency rooms.”

Lara still has a bill pending in the Legislature that seeks a federal waiver to allow undocumented immigrants to buy healthcare on the state exchange. It would also allow some adults living in California illegally to enroll in Medi-Cal if the state says there’s money available.

Gov. Jerry Brown is calling a special legislative session to debate how to raise more money for Medi-Cal providers.