CMSP warns of coverage cuts and county cost risks if HR1 work requirements are enforced

Carrie Brownstein, executive director of the County Medical Services Program (CMSP), told the Sonoma County Board of Supervisors on March 10 that federal changes included in HR1 — chiefly new work requirements for Medicaid — could cause substantial disenrollment and a major local cost shift if the state does not provide offsetting funding. Brownstein said CMSP’s preliminary scenarios estimate roughly “43,000 people, 300,000,000” at the low‑end exposure in a high‑impact scenario and emphasized the modeling excludes administrative costs.

"What we're thinking…43,000 people, 300,000,000," Brownstein said, summarizing the governing board's estimates and adding that the numbers are estimates and will vary with final federal and state rules. Allison Kellen, senior program director for CMSP, detailed how the program evolved after the Affordable Care Act and explained the mechanics of county participation, enrollment and the program’s funding history under Welfare and Institutions Code section 17000.

CMSP staff told the board the governing board is considering several options to reduce program exposure if the federal rules lead to large Medi‑Cal losses. Proposed changes under discussion include lowering the income eligibility ceiling from 300% to 200% of the federal poverty level, reinstating an asset limit that had been relaxed after the ACA, increasing or removing share‑of‑cost discounts for enrollees, shortening enrollment terms (a proposed three‑month eligibility term), and discontinuing some optional benefits such as certain chiropractic, vision and non‑emergent dental services.

Kellen said the program is weighing whether to move back toward a restricted‑scope, emergency‑services model or to retain full‑scope benefits for some categories of residents. "We're looking at…reduce the ceiling of when someone can be eligible. The proposal is to reduce the ceiling from 300% to 200%," she told the board.

Supervisors pressed CMSP staff on timing, enrollment mechanics and likely county impacts. Brownstein said the new work requirements are scheduled to start Jan. 1, 2027, and that disenrollment will be rolling rather than a single cutoff, which will complicate administrative planning. She noted the CMSP board projects year‑one impacts will be smaller and that the program would likely need a multi‑year minimum of roughly $300 million annually for the population that falls off Medi‑Cal unless the state or federal government fills the gap.

Vice Chair Corsi and Supervisor Hopkins pushed for county strategies to keep eligible residents on Medi‑Cal — for example, targeted volunteer programs or assistance to meet work‑requirement exemptions — and flagged the administrative burden of verifying volunteer hours and other non‑payroll activities. CMSP staff acknowledged the administrative costs were not fully included in the scenarios presented and suggested adding roughly 15% for administration to the fiscal projections.

Multiple supervisors raised concerns about behavioral health and substance‑use treatment if patients are shifted from Medi‑Cal to CMSP. Nolan Sullivan, the county’s director of health services, told the board exemptions for medical fragility and substance‑use treatment may cover some people but warned the exemption process will be administratively complex and that many patients who receive intensive behavioral‑health care may struggle to complete the steps required to maintain coverage.

CMSP officials said eligibility or benefit reductions would be subject to public hearings and board action at the CMSP governing board. Brownstein noted some changes would need updates to the statewide CALSAW system and cautioned the board to decide soon: "Eligibility changes have to go through the CALSAW system…this starts in January 2027," she said.

Why it matters: Sonoma County is one of 35 small and rural counties that use CMSP to meet indigent‑care obligations under state law (WIC § 17000). Large disenrollments from Medi‑Cal would push more people into county liability and could increase pressure on local hospitals, clinics and the county budget. Supervisors asked staff to pursue advocacy with the state and federal delegation, to return with a county‑specific fiscal analysis, and to explore prevention and enrollment assistance strategies.

Next steps: CMSP's eligibility and planning committees will continue to refine proposed changes; the governing board is scheduled to meet in May and may schedule public hearings on any reductions. The county said it will track the May state budget and CMSP’s formal recommendations and return to the Board of Supervisors with further analysis.