Merced County leaders warn federal, state cuts could force local service reductions

Merced County officials told the Board of Supervisors on Aug. 12 that a package of federal and state changes — including the federal HR 1 budget bill and several California actions — could reduce Medi‑Cal and other program funding and force county service reductions or larger local matches. County Executive Officer Mark Hendrickson opened the presentation by saying the briefing was intended to alert the board and the public about “known and or anticipated impacts to county programs and services” driven primarily by federal decisions.

The presentation combined perspectives from Behavioral Health and Recovery Services; the Human Services Agency; Public Health; Workforce Development; and the county budget office. Kimiko Vang, director of Behavioral Health and Recovery Services, framed the risk in blunt terms: “HR 1 is the largest cut ever to Medicaid and effectively shifts costs to the state and counties,” she said, citing the California State Association of Counties’ analysis.

Why it matters: Merced County’s health and human services programs largely run on federal and state funds tied to specific programs. County staff said those funds account for more than half of “other funding sources” in the county budget and are tightly restricted by reporting and maintenance‑of‑effort rules. If eligibility rules tighten or funding is cut, the county could lose reimbursement for services now paid by Medi‑Cal and other programs and face new local matching or penalty obligations.

Key department estimates presented to supervisors included: - Statewide and federal policy changes are projected to reduce Medi‑Cal coverage by millions; the state Department of Health Care…