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County study session: HR1 and the state budget pose growing costs and administrative burdens for Medi‑Cal and CalFresh
Summary
Human Services Agency and County Health briefed supervisors on HR1 and state changes that will increase verification work, impose CalFresh administrative cuts, and could expose the county to payment‑error penalties; HSA estimated FY26‑27 exposure around $2.6M and FY27‑28 planning ranges of $4M–$12M depending on state actions.
San Mateo County officials told the Board on Jan. 27 that federal HR1 and related state budget choices will shift costs and administrative burdens to counties, increasing staff workload and posing material fiscal risk to the local safety net.
Human Services Agency Director Claire Cunningham summarized the program impacts: roughly 34,800 county residents receive CalFresh and an estimated 3,700 will initially face new work‑verification requirements; the county estimates an FY26‑27 administrative exposure of about $2.6 million tied to CalFresh match changes and verification work, with a planning range of $4 million to $12 million annually in later years if the state does not backfill lost federal revenue. HR1 also ties state penalty exposure to the statewide SNAP payment‑error rate and could create large statewide liabilities; county officials said San Mateo’s local error rate is well below the 6% threshold but that statewide calculations could nonetheless create exposure.
On Medi‑Cal, the board heard that an estimated 27,000 county residents may be affected by reinstated asset tests, up to 52,000 renewals could shift to twice‑yearly redeterminations and another 51,000 could be subject to new work requirements. Immigration‑related eligibility changes already effective for certain categories will further increase administrative intake and likely increase demand for uncompensated care. HSA said the changes will create more appeals and more hand‑holding work per case, requiring new verification processes, enhanced outreach and an expansion of employment services capacity — staff said they are recruiting for additional temporary positions to handle the workload.
County Health leaders described parallel impacts on San Mateo Medical Center: changes to federal/state matching for uninsured populations and removal of enhanced FQHC rate support for some categories may reduce clinic payments; preliminary county health estimates show a FY26‑27 budget challenge of about $24.9 million across county health (with a larger multi‑year increase projected in FY27‑28 if all reductions materialize). Health staff outlined mitigation steps: accelerate Epic‑driven operational efficiencies, pursue revenue‑capture opportunities, coordinate with the Health Plan of San Mateo, monitor ACE (Access to Care for Everyone) enrollment/eligibility and report back to the board with refined fiscal projections.
Directors said the county currently faces limited immediate exposure this fiscal year but that uncertainties in federal reimbursement timing and the state's ultimate budget choices require ongoing monitoring. They committed to return with more granular fiscal scenarios and to coordinate statewide advocacy through county associations.
