County officials warn HR1 Medicaid and SNAP cuts could strip more than $1 billion from Santa Clara County health system; Measure A pitched as partial fix

Santa Clara County representatives told the Los Gatos Town Council on Sept. 16 that the federal budget law known as HR1 will sharply reduce Medicaid (Medical) and SNAP (CalFresh) funding, threatening local hospital services and programs.

Marico Saiak, chief of staff to Supervisor Margaret Abbyoka, and Brian Darrow of the county executive's office said HR1 makes two types of cuts that hit county-operated hospitals hard: reductions in direct supplemental payments to Medicaid providers and changes to eligibility (work-reporting requirements and more frequent renewals) that are projected to push many residents off coverage. Darrow said county analysis anticipates a multi-hundred-million-dollar shortfall in the near term and more than $1 billion in annualized health-related funding losses in later years.

The county presentation framed those losses as an immediate threat to trauma, emergency and specialty care that rely on county hospitals. Darrow said Santa Clara Valley Healthcare operates four hospitals and 15 clinics, treats nearly one in four county residents, runs two of the county's three trauma centers and receives substantial federal support tied to Medicaid. He warned that closed trauma centers and overwhelmed emergency departments would harm care for everyone, not only Medicaid enrollees.

Council members pressed county staff on the scale and geographic distribution of the impact. Council member Rainey asked whether the county's share of national cuts was plausible; Darrow explained two reasons Santa Clara County would be disproportionately affected: (1) higher local cost of care and (2) the county's large public hospital footprint and success drawing supplemental payments. Council members also sought clarity about the county's assumptions and the time horizon for projected losses.

Darrow and Saiak outlined a three-pronged county strategy to respond: (1) internal efficiencies and cost controls, (2) state-level advocacy to protect public-hospital funding and (3) a local revenue option. County supervisors on Aug. 7 voted to place a temporary 0.58-cent sales-tax measure (Measure A) on the ballot; staff said Measure A would raise about $330 million a year if passed. Darrow cited SB 335 as the state law authorizing the temporary sales-tax authority the county plans to use.

Public commenters from Los Gatos and regional nonprofits urged the council to endorse Measure A and to help mobilize voters. Speakers included health-care providers, nonprofit executives and residents who described trauma transfers and the downstream effects on local access to urgent care. Opposing or skeptical views were limited in the council chamber but some council members said they needed more detail on the county's projections before signing on to formal endorsements.

What happens next: Council members said they would continue to question county assumptions and weigh the local role in campaigning or formal endorsement. County staff said they would continue outreach to cities and community leaders and pursue state and local options in parallel.