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County health chiefs warn HR-1 and waiver uncertainty could squeeze safety-net finances
Summary
County health and social-service officials told the Board that federal and state eligibility and payment changes are already shrinking Medi-Cal and CalFresh caseloads and putting sustained pressure on the Department of Health Services' finances; departments outlined contingency plans and outreach to help preserve coverage.
At a June 9 briefing the Los Angeles County Department of Health Services (DHS) and the Department of Public Social Services (DPSS) told supervisors that a series of federal and state policy changes are already reshaping enrollment and revenue and could force future service or workforce reductions if alternate revenue is not secured.
DHS Director Dr. Christina Ghaly said the department expects to close the books this year with an available fund balance of about $1.5 billion but warned that the expiration of COVID-era federal Medicaid flexibilities and uncertainty around renewal of the 1115 waiver and the global payment program create a growing structural deficit. "Without intervention ... this will exhaust our fund balance," she said, outlining a sequencing of options that begins with operational efficiencies and could—if necessary—move to workforce and service reductions.
DHS noted several revenue opportunities under consideration and advocacy: Measure ER (which DHS estimates would deliver about $220 million a year for hospitals and clinics if passed), a $500 million state request to support inpatient fee-for-service claims for public hospitals, and work to expand federal incentive payments. Allan Wecker, DHS's CFO, said county efforts to manage costs have built reserves but that annual structural pressures pre-dated recent federal and state changes.
Kristin Stranger, chief deputy for DPSS, summarized program-level impacts already under way: CalFresh eligibility changes and reinstated asset tests and the new able-bodied adult without dependents (ABAWD) work requirements that began June 1 have already lengthened interviews, increased inquiries and reduced caseloads. DPSS reported its monthly Medi-Cal caseload averaged about 2.1 million previously and was down roughly 100,000 cases from that average; DPSS emphasized intense community outreach, training for staff and partnerships with community-based organizations to help people retain benefits.
Supervisors asked for clearer, earlier notice when clinics or services are being consolidated, pressed DHS about contingency plans for critical clinics and school-based sites, and sought assurances that communication to residents would be multilingual and proactive. Supervisor Holly J. Mitchell urged the departments to use partnerships (L.A. Care, community clinics, WIC, child-care networks and philanthropic channels) to reach families and to provide hands-on support where people risk losing benefits.
DHS and DPSS said they will continue pursuing state and federal advocacy (waiver renewal and state funding requests), expand partnerships for outreach and navigation, and implement internal efficiency measures. DHS said it will present options to the Board should it become necessary to consider deeper reductions; for now staff said they would use fund balance to buy time while seeking revenue and cost adjustments.
The briefing underscored the county's role in both implementing new eligibility rules and in trying to preserve access for the region's most vulnerable residents while working to avoid major service disruptions.
