State officials, county leaders warn HR 1 will shift billions in costs to counties and safety‑net providers

State officials, county leaders and hospital and clinic representatives told the California Senate Budget Subcommittee No. 3 on Thursday that the federal law known in testimony as HR 1 will sharply reduce federal support for Medi‑Cal and CalFresh and create an enormous fiscal and operational burden for counties and public safety‑net providers.

"HR 1 was enacted July 4, 2025 and imposes significant requirements on the Medicaid program, including work and community engagement requirements, more frequent redeterminations and reduced federal matching for certain populations," Michelle Boss, director of the Department of Health Care Services, said in a presentation to the panel. She summarized the governor's budget assumptions and the department's implementation plan and said the administration is investing in outreach and navigators to try to preserve coverage.

The state directors laid out a mix of projected savings and costs in the budget year tied to eligibility changes and implementation. "The estimated impact to general fund in 26/27 is a cost reduction of about $102,400,000" from the work and community engagement provisions, Boss said, while also warning of much larger state general fund exposure tied to reduced federal match and provider‑tax changes.

Jennifer Troyer, director of the California Department of Social Services, testified that HR 1 will expand CalFresh ABOD (able‑bodied adults without dependents) rules and sharply…