County staff warn HR1 could shift billions in costs and put thousands at risk of losing CalFresh or Medi‑Cal

Alameda County Social Services Agency (ACSSA) policy staff told the Board’s Social Services Committee on Sept. 22 that the sweeping federal law known as HR1 will significantly alter how CalFresh (SNAP) and Medi‑Cal are administered and paid for, and could shift substantial costs from the federal government onto states and counties.

"The law significantly shifts cost burdens from the federal government to states and counties," Hannah Hamilton, ACSSA policy director, said in the presentation. She listed six major CalFresh changes, including a freeze of updates to the Thrifty Food Plan scheduled to take effect Oct. 1, 2025, and the expansion of SNAP work requirements to older adults, many parents and formerly exempt groups.

Roland Shao, the CalFresh program specialist, said the Thrifty Food Plan freeze will cap increases in maximum monthly benefits through at least Oct. 1, 2027, which will reduce households’ food‑purchasing power if food costs rise faster than inflation. He also described a widening of the "able‑bodied adult without dependents" (ABOD) work requirement: the upper age limit rises to 64 and exemptions for veterans, the homeless and former foster youth were removed under the new federal rules.

Juan Ventanilla, ACSSA’s Medi‑Cal program specialist, outlined the law’s new Medicaid provisions, including the first‑time federal work requirements for the adult expansion population and biannual redeterminations starting January 2027. "An estimated 183,000 Alameda County residents would be subject to both work requirements and biannual renewals," Juan said. He added that county staff estimate as many as 55,000 could lose Medi‑Cal coverage under current models used by other states.

County staff stressed major fiscal unknowns. HR1 changes administrative cost sharing from a 50/50 federal/state split to 75% state share (federal 25%) beginning in federal fiscal year 2027, and ties benefit cost sharing to payment‑error rates beginning FY2028. ACSSA noted California’s 2024 payment‑error rate was 10.98%, which could trigger a 15% state benefit cost share under HR1 models and produce a roughly $2 billion annual state exposure in that scenario.

Locally, staff provided rough ranges rather than precise forecasts: prior to HR1, about 13,300 Alameda County residents were at risk of ABOD time limits under older rules; adding formerly exempt homeless clients could increase that pool by roughly 9,000 to around 20,000. The state estimates hundreds of thousands statewide could lose eligibility and hundreds of millions in federal benefit funding could be at risk.

Supervisors pressed staff on timelines, mitigation and outreach. Hamilton said USDA/FNS guidance is expected by the end of the month for some provisions, but other federal guidance (CMS for Medicaid) could come as late as mid‑2026 for key operational details. County staff outlined interim steps: expanded partnerships with seven community‑based organizations to assist with enrollment and renewals, publication of a new optional ABOD exemption form (CF 377.11e) for providers to help identify exemptions, and state trailer‑bill funds allocated to error‑rate mitigation and automation (including $30 million for automation and $40 million for county ABOD administration).

Supervisor Tam highlighted the need to coordinate outreach with health partners and community organizations and asked staff to prioritize clear materials for clients, particularly people at high risk of losing benefits. "We need to get this information out to community partners so people don’t fall off their coverage," she said.

Next steps: staff said they will continue to track federal guidance, refine county impact estimates, expand community partner training and return to the board with updated projections once federal and state rules are clarified.