San Luis Obispo County votes to explore joining pooled indigent-care program as federal rules change

The San Luis Obispo County Health Agency told the Board of Supervisors the county should explore options to meet its legal responsibility to provide medically indigent adult care after state and federal changes to Medi-Cal eligibility.

Michelle Shoresman, division manager for healthcare access, explained that California's Welfare and Institutions Code section 17000 requires counties to act as a payer of last resort. She said HR1 changes expected to begin in January 2027 will introduce more frequent eligibility verification, new work requirements and a shorter retroactive coverage period — steps that may increase demand for county-funded medically indigent services.

Shoresman presented the County Medical Services Program (CMSP) as a risk-pooling option; CMSP currently serves 39 mostly Northern California counties. "If we submit a letter of interest, CMSP staff would work with our designated contact to evaluate costs and discuss fees and timelines," she said. Submitting a letter does not obligate the county to join.

County staff stressed the high uncertainty in modeling demand: using historic pre-ACA caseloads as a rough baseline and applying a wide range for re-enrollment, staff estimated a very rough potential annual county cost between $2,750,000 and $13,700,000 if a significant share of previously insured residents lose Medi-Cal eligibility.

The board voted to instruct staff to explore CMSP and other partnership models, conduct a cost-benefit analysis, and return with recommendations. Supervisor Gibson moved the motion; it passed on a roll call vote of the supervisors present.

Next steps: staff will participate in ongoing County Health Executives Association (CHEAC) coordination calls, investigate partnership models with neighboring counties and CMSP, and return to the board with a cost/benefit analysis and recommended approach.