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County lobbyist warns HR1 fallout could swell county costs as California budget heads to governor
Summary
At a June 15 hearing, Humboldt County officials heard from a state lobbyist that federal HR1 changes and ongoing state negotiations could push more residents into medically indigent status and strain rural hospital and county budgets; the state’s 'path' emergency-scope medical approach and a proposed $125 million allocation were highlighted as partial mitigation.
Humboldt County officials were told on June 15 that federal and state policy changes could sharply affect county health-care costs and rural hospital solvency if residents lose exchange subsidies and become ineligible for coverage.
Karen Lang, a state lobbyist for Shaw Yoder and Schmelzer and Lang, told the Board of Supervisors that the state Legislature must pass a budget by June 15 and that the document heading to the governor included a mix of proposals with continuing negotiations. She highlighted the potential effects of HR1 on county-level care and said counties would face added expense if more residents lose coverage.
"If those folks can't access health insurance through the exchange or remain on medical, they become what's called medically indigent," Lang said, adding that county responsibility for those costs is tied to state law. She described a "path" emergency-scope medical proposal included in the budget discussions and said, "The amount of funding that has been proposed is 125 million." Lang cautioned that while emergency-scope funding can reduce county burdens, it is a partial fix rather than a comprehensive coverage solution.
Lang also outlined other state-level debates that could affect county finance, including a proposed sales-and-use tax expansion to some software systems (estimated at about $1 billion annually) and the politically charged negotiations over a proposed one-time 5% billionaire’s tax and a rival California Business Roundtable initiative that would require two-thirds voter approval for many local taxes and fees.
Board members pressed Lang on whether the HR1 impacts were nationwide and on funding for eligibility workers and public hospitals. Lang said California’s broader use of federal waivers and programs (for example, CalAIM and county enrollment waivers for jails) made the state’s exposure and policy response different from some other states, and she urged supervisors to continue outreach to their legislative delegation.
Why it matters: The policy changes Lang described could push additional costs to counties, particularly rural areas with strained hospital networks. Lang said counties have communicated a multi-billion-dollar request to the state (staff and association estimates earlier in the year were near $3 billion for FY 26–27) while the state’s current proposals represent a smaller pool of initial funding and further negotiation will determine the final amount.
What’s next: Lang urged continued county engagement with Sacramento and county lobbyists. The board heard the update in advance of final state budget votes and asked staff to continue to coordinate legislative outreach as the state finalizes details.
