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County health officials warn HR1 could raise indigent care costs and administrative burdens
Summary
Health and Human Services staff told supervisors HR1 state changes are likely to increase the number of uninsured residents, drive more demand for indigent care and raise county administrative costs—HHSA estimated mid‑range fiscal impacts and said many details remain uncertain.
Health and Human Services Agency Assistant Director Dr. Amanda Duffy and interim behavioral health director Rachel White told the board the recently‑passed HR1 provisions could reduce Medi‑Cal coverage for some residents, increasing uncompensated care and administrative workloads for county eligibility systems.
Duffy said the county could see more uninsured residents and higher demand for indigent care services and emergency safety‑net support. She also explained the administrative funding mechanism: HHSA receives a capped allocation for eligibility administrative costs (about $2.8 million budgeted), and increased case complexity or verification requirements could push more work outside federal/state caps and onto county realignment and fund balances.
White summarized likely behavioral‑health effects: a relatively small share of behavioral‑health clients are Medi‑Cal‑funded, but HR1’s community‑work requirements, six‑month redeterminations and changed non‑citizen eligibility could cause a modest near‑term fiscal impact for behavioral health in 2026–27 (staff estimated $286,000 in incremental costs in one scenario) and a larger projected impact in later years (the department estimated up to $2.1 million in a 2027–28 scenario if more residents lose coverage).
HHSA said uncertainty is high because final state eligibility rules and the state budget remain in flux; the department is pursuing billing and productivity improvements, CMSP participation and advocacy through the California Welfare Directors Association to mitigate impacts. Supervisors asked about reserves and whether short‑term waivers or CMSP coverage could bridge gaps; HHSA said reserves might cover a short period (about two years) but long‑term pressure will require state support or sustained local adjustments.
What to watch: HHSA will continue monitoring HR1 implementation, seek state guidance, pursue administrative reimbursement where possible, and report updated fiscal impacts when state rules and the budget clarify program specifics.
