H.R. 1: Protect California’s Safety Net

H.R. 1 is the largest structural issue facing California’s budget in decades. It shifts massive federal safety net costs to states and counties — up to $9.5 billion per year in new costs for California counties alone.

What H.R. 1 Means for Californians

Health Coverage and Access at Risk

Nearly 1.5 million Californians could lose Medi-Cal due to new work requirements.
Counties are legally required to provide basic indigent care — but there’s no dedicated funding left.
The old indigent care system was largely dismantled after Medi-Cal expanded under the ACA in 2013.

Strain on Public Hospitals and Behavioral Health Systems

Cuts to federal Medi-Cal financing tools will result in billions lost for California’s public hospitals.

Rural hospitals are especially vulnerable.

Reduced funding will lead to longer ER wait times, fewer services, and greater financial instability.

Loss of coverage will increase demand for mental health and substance use disorder services.

Rising County Costs and Administrative Burdens

H.R. 1 expands work requirements and increases eligibility verification rules.

Counties face hundreds of millions in new administrative costs with less federal support.

Increased workload from more frequent eligibility checks will strain county systems.

Without sufficient funding, eligible Californians risk losing health care and food assistance due to administrative barriers.

READ OUR FACT SHEET

H.R. 1 and the State Budget

The governor’s January budget proposal does not acknowledge the impacts of H.R. 1 on counties or local communities. This is not a one-year problem. It is a multi-year structural shift. The state must treat this as one of the biggest budget challenges in decades.

If the State Leaves Counties on Their Own

Counties operate with finite budgets. If forced to absorb billions in new costs, every county service will feel the impact, including:

Public safety (sheriff’s and fire departments)
Housing permits and homelessness services
Elections and child welfare programs

Total H.R. 1 County Multi-Year Budget Request

H.R. 1 threatens health, human services, and public safety across the state. Counties need partnership and support from the state — now and for the long term.

Protect Our Safety Net.

The table below outlines California Counties’ Multi-Year Budget Request for the 2026-27 and 2027-28 fiscal years.

	2026-27	2027-28
Indigent Care *	$761 million	$2.4 billion
Funds state-mandated, subsistence level care for estimated 33% of individuals who will lose Medi-Cal coverage, seek this care, and be eligible.
Public Hospitals	$500 million	$850 million
Stabilizes public hospital system revenues and protects patient care.
County Eligibility	$373 million	$402 million
Funds implementation of new eligibility requirements for Medi-Cal and CalFresh and robust screening and supports to maximize the number of individuals who can retain coverage and assistance.
County Behavioral Health	$224 million	$828 million
Funds behavioral health services for individuals who will lose Medi-Cal coverage and seek services from counties.
TOTAL	$1.9 billion	$4.5 billion