County warns HR 1 could cut Medi‑Cal and CalFresh access, shift millions to local budgets

Sacramento County supervisors heard a workshop Wednesday on how HR 1, federal legislation signed July 4, 2025, could affect Medi‑Cal, CalFresh and other safety‑net programs and shift costs to state and county budgets.

Deputy County Executive for Social Services Shivang Kothari told the Board of Supervisors the changes are rolling out over the next three years and that many details remain in rulemaking and litigation, but some consequences are already clear. “Federal changes and cuts flow to states, and then states have to determine how they'll respond to them, and those responses become county realities,” Kothari said.

Kothari said the county is preparing scenarios because the state’s response will determine how much of the cost and administrative burden falls to counties. She said HR 1 alters eligibility and program rules for Medicaid (Medi‑Cal at the state level), SNAP (CalFresh) and public‑health grants, and will narrow exemptions and add work or community‑engagement requirements that could mean reporting, verification and participation burdens for people who now receive benefits.

County staff offered specific local estimates and timelines shared with supervisors: about 270,000 people receive CalFresh locally and staff estimate roughly 30% could be affected by eligibility changes; about 510,000 residents are enrolled in Medi‑Cal, and more than half of those enrollees could face new requirements or documentation burdens. Staff estimated roughly 80,000 Sacramentans may lose coverage because of combined eligibility changes for noncitizen groups, narrowed exemptions and work requirements. Staff also estimated a minimum of $9.3 million in local costs for CalFresh could appear in the next federal fiscal year if the state does not backfill the lost federal funding.

Kothari highlighted timing for key provisions: (1) some changes affecting CalFresh would begin shifting federal cost responsibility to states in October 2026; (2) an enrollment freeze for undocumented adults 19 and older could begin Jan. 1, 2026; and (3) a monthly premium (estimated about $35 per month) for some undocumented people who remain enrolled could begin Jan. 1, 2027. On that point she said the county will analyze options and return to the board this winter with scenarios for programs the county already operates, including the county’s Healthy Partners program and the County Medically Indigent Services Program (CMISP).

Supervisors asked about the scope and timing of impacts, and whether particular populations — refugees, asylees, humanitarian parolees and special immigrant visa (SIV) holders — would lose eligibility. Kothari and county staff said some humanitarian categories are explicitly losing federal eligibility and others remain unclear because HR 1 and subsequent guidance did not name every group. “Some of these populations will lose their temporary legal status as well, which puts them in the undocumented bucket,” Kothari said.

Staff warned that beyond direct benefit changes, cuts to federal public‑health and nutrition programs (for example, elimination of a $2.2 million SNAP‑ED nutrition education grant) could reduce prevention capacity and surge preparedness, weaken the local public‑health workforce and increase demand for county services such as hospital care, behavioral health and shelter. That cascade — Kothari said — can push people into crisis and increase county costs even where direct program funding is unchanged.

Board members sought information on two follow‑up topics: (1) modeling the cost of county options for covering populations who lose eligibility (for example, expanding Healthy Partners or CMISP), and (2) supports to help people meet anticipated work/community‑engagement requirements (training, job placement, partnerships with SETA, adult education and community colleges). Kothari said staff are working with consultants and statewide county associations and plan to return this winter with cost models and policy options.

Why this matters: counties administer many programs affected by HR 1 and provide safety‑net supports that are costly if demand rises. The board’s follow‑up direction will feed the county’s FY 2026–27 budget planning.

Speakers at the workshop included Shivang Kothari, Deputy County Executive for Social Services; Ethan (county staff); and supervisors Phil Serna (chair), Patrick Kennedy, Rich Desmond, Rosario Rodriguez and Pat Hume. No formal vote was taken; staff will return with analysis this winter.