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San Francisco DPH projects hundreds of millions in losses from H.R.1 and state budget changes; lays out mitigation steps
Summary
DPH warned the Health Commission that H.R.1 and recent state budget changes could reduce Medi-Cal funding and state-directed payments, projecting $300M+ near-term impacts and up to $400M annually by 2037'38; the department described outreach, automation and local mitigation options but said localities cannot fully absorb the cuts.
Tangerine Brigham, deputy director and chief operating officer for the Health Network at the San Francisco Department of Public Health, told the commission the combined effects of federal H.R.1 provisions and state budget changes pose significant fiscal threats to Medi-Cal-dependent services and to food-security programs such as CalFresh.
"This is devastating," Brigham said, summarizing the policy changes she described as reducing eligibility and federal participation, introducing more frequent redeterminations, and narrowing reimbursement avenues. DPH projected an estimated $300,000,000 impact in fiscal year 2027'28 and said the number could rise toward $400,000,000 annually by 2037'38 depending on implementation.
Brigham described four major impact areas: eligibility and access (including moves from 12- to 6-month renewals and potential new work requirements), reductions in federal funding and state-directed payments (including potential limits on MCO/provider tax mechanisms), changes affecting immigrant populations and their access to benefits, and restrictions affecting reproductive-health providers. She said a portion of the fiscal effect comes from fewer people enrolled in Medi-Cal and from reduced reimbursement rates for certain programs.
The human services agency estimates roughly $81,000,000 in additional local costs to process increased administrative work tied to shorter renewal windows and work verifications. DPH estimated that between 25,000 and 50,000 San Franciscans could lose Medi-Cal coverage and almost 21,000 could lose CalFresh benefits under certain scenarios.
Brigham outlined mitigation steps the department is pursuing: producing multi-language outreach materials to encourage continued enrollment, creating a Medi-Cal redetermination committee with health plans and community partners, coordinating with the Human Services Agency on automation to reduce administrative burden, and maximizing current revenue sources in the city's two-year budget. She emphasized the limits of local options: "These changes are significant, and they are not something that a locality can cover on its own," Brigham said.
Public commenters from the San Francisco Community Clinic Consortium and other callers warned the commission that losing the FQHC prospective payment system (PPS) rate and other Medi-Cal revenue changes would heavily strain community clinics and long-term care providers such as Laguna Honda Hospital, whose patient mix is heavily Medi-Cal dependent.
Commissioners asked DPH to continue frequent updates as federal and state implementation plans become clearer and requested follow-up on provider-tax status and the fate of waiver programs. DPH said it will continue coordination with city partners and bring updates to the commission as new information is available.
