H.R. 1 will cost California counties up to $9.5 billion a year

Sacramento, CA — California county leaders are releasing the full estimated annual cost of H.R. 1’s impacts to the safety net programs millions of Californians rely on for food and healthcare.

That price tag: up to $9.5 billion every year.

In a new fact sheet, counties lay out the three ways H.R. 1 strains our budgets:

1. Indigent health care

Counties will incur up to $5.5 billion/year in new costs to provide free or low-cost medical services to individuals with limited income and no insurance options.

The previous indigent care funding was redirected to the state in 2013 as California’s Affordable Care Act expansion shifted nearly all indigent care recipients to Medi-Cal. Californians losing Medi-Cal coverage due to H.R. 1 may turn to indigent care, which now lacks a funding source.

2. Public hospital systems

Public hospital systems will face $3.4 billion/year in federal funding cuts for patient care to Medi-Cal enrollees.

That will make it harder for all Californians to receive care at those hospitals — not just Medi-Cal patients.

3. County eligibility workforce

Counties will also incur nearly $600 million in new workforce costs to implement H.R. 1’s eligibility requirements for both Medi-Cal and CalFresh, and to absorb the federal government cutting CalFresh administration funding in half.

The governor’s January budget proposal does not acknowledge these impacts of H.R. 1 on counties and local communities.

This fact sheet marks the beginning of a comprehensive effort to emphasize the severity of H.R. 1’s impacts on counties, and how it threatens the level of all services that counties provide.

County leaders are ready and willing to work collaboratively with the governor and legislature as partners on this year’s budget.

What county leaders are saying:

• Graham Knaus, Chief Executive Officer, California State Association of Counties (CSAC) – “Millions of Californians are counting on us for food and health care. The only way to protect our safety net is for the state and counties to work together.”
• Scott De Moss, Glenn County Administrative Officer and President of the California Association of County Executives (CACE) – “Counties are already stretching every dollar and finding creative ways to meet state and federal mandates. H.R. 1 would impose new costs we simply cannot absorb, forcing reductions in services that safeguard community health. For individuals and families who depend on Medi-Cal, these cuts would translate directly into delayed care, interrupted treatment, and fewer opportunities for stability and recovery. There is no recovery from a proposal that forces impossible choices and undermines our ability to protect the health and well-being of the residents who rely on us every day.”
• Michelle Gibbons, Executive Director, County Health Executives Association of California (CHEAC) – “When Californians lose their health care coverage, their need for care doesn’t go away. The costs shift to counties as more people become eligible for county indigent care programs. Over the last decade, funding was redirected away from counties as people became eligible for Medi-Cal coverage and without renewed investments in indigent care, counties will face increased strain on public health and other core safety-net programs.” 
• Erica Murray, President & CEO, California Association of Public Hospitals and Health Systems (CAPH) – “California’s 17 public hospital systems represent just 6 percent of hospitals across the state but provide more than a third of all hospital care for people on Medi-Cal. H.R. 1’s unprecedented assault on Medicaid payments will result in the loss of $3.4 billion to public hospital systems, hurting not just the most marginalized, but anyone needing life-saving trauma care or burn services. To prevent this from happening, the state must reinvest in public hospital systems.”
• Carlos Marquez III, Executive Director, County Welfare Directors Association of California (CWDA) – “The county eligibility workforce offers a clear, cost-effective, and proven pathway for our state leaders to mitigate the harms of H.R. 1 by keeping as many people as possible connected to the safety net and reducing the explosive future costs associated with hunger and uncompensated care. When properly resourced, our county eligibility workforce has proven time and again it can be the difference between retaining life-saving food and healthcare for as many Californians as possible, and the devastation wrought by poverty. We must fund this work now.”
• Kari Brownstein, Executive Director, County Medical Services Program (CMSP) – “The changes brought to Medi-Cal by H.R. 1 will have detrimental impacts on the health of more than a million Californians.  In the 35 rural counties served by CMSP, over 124,000 Medi-Cal beneficiaries could lose their health coverage.  The CMSP program and its participating counties are in no position to assume ongoing responsibility for the health care needs of these newly uninsured in the absence of significant new State resources to support the cost.”
• Patrick Blacklock, President & CEO, Rural County Representatives of California (RCRC) – “When people lose Medi-Cal, they don’t stop needing care—they turn to their counties. Counties have carefully analyzed how many residents may return to indigent care programs if they lose Medi-Cal coverage due to H.R. 1 requirements and what it will cost to serve them. Our estimates show the significant financial impact this would have on rural to urban counties; costs that counties are not equipped to absorb on their own. The data underscore the urgent need for the state and counties to partner on a path forward to ensure we can responsibly serve this vulnerable population without compromising other critical local services.”
• Jean Hurst, Legislative Advocate, Urban Counties of California (UCC) – “Urban counties require state partnership and assistance in three key areas: resources to restart county indigent programs, supports for county hospitals and clinics, and a commitment to a robust county workforce that will help Californians retain access to food and health care. We are prepared to do our part, but cannot sustain services to vulnerable populations without the state’s help.”