Senior University of California officials and partner advocates briefed the Health Services Committee on threats to Medi‑Cal financing arising from the federal budget reconciliation process and related executive actions.

Tam Ma, leader of UC’s health policy team, provided an overview of Medi‑Cal’s role in California and UC’s participation in the safety net. "System wide, one of our inpatient days and 20% of our revenue comes from Medi‑Cal payments," Ma said, noting Medi‑Cal covers about 15 million Californians and that federal funds finance roughly two‑thirds of the program.

Erica Murray, president and CEO of the California Association of Public Hospitals and Health Systems (CAPH), described the reconciliation process and the current Energy and Commerce markup that includes proposed Medicaid cuts. Murray said much of UC's Medi‑Cal funding comes from supplemental payments, including state‑directed payments (SDPs) and intergovernmental transfers that match state and local contributions with federal dollars. "If this policy of capping state directed payments to Medicare levels were to go into effect, it would, in effect, wipe out the $1,800,000,000 that we had just secured for 2025 and beyond," Murray said.

Panelists explained that supplemental payments currently make up a majority of UC's total Medi‑Cal payments; Ma said approximately 42% of Medi‑Cal total payments are base payments and about 58% come from supplemental payments. Presenters warned that limiting or capping these supplementals, restricting provider or MCO taxes, or other reconciliation proposals could materially reduce funding that helps hospitals remain solvent and maintain services for Medi‑Cal enrollees.

Speakers also addressed other legislative and executive risks: proposals under consideration included work requirements, more frequent eligibility checks, and targeted FMAP changes for states that provide state‑only coverage for undocumented populations. Murray cautioned the markup was fluid and could change as amendments are considered, but she emphasized the scale of potential impacts and urged continued federal advocacy.

Committee members asked how increased numbers of uninsured or "frictionally uninsured" patients would affect UC hospitals and the safety net. Santiago Munoz of UCLA Health said current system capacity is high and that higher uninsured rates could lead to patients deferring care and eventually presenting sicker; panelists noted uncompensated care dollars and supplemental payments would be even more important in that scenario.

Ma said UC's federal government relations team has asked California's members of the House Energy and Commerce Committee to oppose the proposed cuts and that UC leaders are making data‑driven cases to congressional offices about the systemwide impacts.

The committee took no formal vote. Presenters urged continued advocacy at the federal and state levels and said they would monitor the reconciliation process and the May state budget revision for California.