CalHHS Webinar Recap: Updates on HR 1 and the Rural Health Transformation Opportunity

Throughout 2025, CSAC has kept counties updated on the status of H.R. 1 and its impacts on county governments. To this end, we would like to share that earlier this week the California Health and Human Services Agency (CalHHS) hosted a webinar titled Updates on HR 1 Efforts in California and the Rural Health Transformation Opportunity. This is the third webinar in the CalHHS Connect webinar series, which focuses on federal policy changes in health and human services and how the state is responding.

What did CalHHS say about HR 1? 
Changes to Medicaid and the Supplemental Nutrition Assistance Program (SNAP) made by H.R. 1 will have a significant impact on California’s Medi-Cal and CalFresh programs. These changes include new work requirements for program recipients, and corresponding reporting requirements for program implementation. CalHHS gave an overview of measures the state is taking to mitigate burdens imposed by federal policy changes. 

• Medi-Cal Impacts: may lose coverage, and upwards of $30 billion in federal funding is at risk According to Michelle Baass, Director of the California Department of Health Care Services (DHCS), up to 3.4 million Medi-Cal members may lose coverage, and upwards of $30 billion in federal funding is at risk annually due to federal policy changes included in H.R. 1. DHCS believes it is unlikely that California will obtain the required federal approval to delay mandatory work requirements. The Department is planning to release a comprehensive H.R. 1 Implementation Plan later this year, which will provide guidance for the implementation of federal Medicaid policy changes. This will include guidance and training on new work eligibility requirements in H.R. 1 for county eligibility workers. 
• CalFresh Impacts: Jennifer Troia, Director of the California Department of Social Services, shared that changes made by H.R. 1 could cause up to 395,000 of the over 5.5 million individuals served by CalFresh to lose benefits. Implementation of federal changes occurring include the removal of internet costs from the State Utility Allowance Subsidy and the reevaluation of the Thrifty Food Plan.

State guidance for serving Able Bodied Adults Without Dependents (ABAWDs) has not yet been changed, but updates to reflect new federal work requirements. There is also no current guidance or implementation date in place for non-citizen eligibility, although it is anticipated that around 74,000 lawfully present non-citizen CalFresh recipients will lose coverage. 

State budget investments made in response to new implementation requirements in HR 1 include $21.9 million to fund ABAWD work requirement administration and $47.7 million in local assistance funds to reduce the payment error rate of the CalFresh Program. 

What is the Rural Health Transformation Opportunity?
H.R. 1 created the Rural Health Transformation Fund and appropriated $50 billion over five years. All 50 states are eligible to apply for this new funding, which is intended to “give states the resources to reimagine how rural health care is delivered and financed” according to the California Department of Healthcare Access and Information’s State Office of Rural Health (HCAI), which is leading this program in California. This funding may not be used to supplant existing funding for Medicaid and Medicare programs. After surveying stakeholders, HCAI is proposing to apply for funding for three initiatives for rural healthcare in California: 1) a Transformative Care Model “built on a foundation of skilled workforce and effective technology, driving long-term, sustainable improvements in health care delivery” 2) technology and tools, and 3) workforce development. More information is available on the HCAI website and in the webinar recording and slides linked below.  

Where to learn more: 
A recording of the webinar is available on the CalHHS YouTube channel.  The webinar slides are available here. You can also sign up to receive emails from the CalHHS stakeholder list to receive information about future webinars.  

Questions?  Please contact Danielle Bradley, CSAC Legislative Analyst for Health and Human Services policy, at dbradley@counties.org.