Medicaid is healthcare for poorer Americans; in California it's known as Medi-Cal. It's the state's second-largest expense behind education.
The major piece of the federal Affordable Care Act was approved during the final days of the legislative session.
Some Republic lawmakers questioned whether the state of California could financially afford the expansion. Many worried the legislation could raise concerns in the long run, particularly once the federal government began to reduce its payments to help cover the program.
Republican Assemblyman Tim Donnelly called the expansion a potentially debilitating move for the state's finances.
"We are shackling future legislators to the decisions we are making here today," he said.
While some Republicans expressed dismay over the final bill, Democrats appeased their opponents by including a provision in the legislation that would allow future lawmakers to reconsider the expansion if the federal government's share drops below 70 percent.
"We don't know for certain that this will contain the costs; that's certainly the goal. But ... we also make sure that health care is not considered a privilege of the fortunate few but as a basic human right," said Sen. Mark Leno, D-San Francisco. "That's what we're implementing today. This is a big deal."
The federal government will cover the full cost of expanding Medi-Cal in California for the first three years but will gradually reduce payments to 90 percent starting in 2020.
Legislative Analyst Mac Taylor has estimated that California could then be responsible for between $300 million and $1.3 billion a year starting in 2020.
The Medi-Cal vote came a day after the California Legislature passed a $96.3 billion state spending budget. The new spending plan includes more money for schools and restores some of the social services cut or eliminated over the past few years.
The Associated Press contributed to this report.