Senate Budget Sub3 — 2026-03-19

All right.

Hi.

Good morning, Chair and committee staff Michele Boss, Director of the Department of Healthcare Services. I will provide a brief overview of HR1's impact to the MEDI CAL program. HR1 was enacted, as you know, 07-04-2025 and imposes significant and devastating requirements on the Medicaid program, including work and community engagement requirements, more frequen determinations of eligibility, reduced federal matching for certain populations, retroactive changes to coverage. The governor's budget incorporates these requirements in the caseload beginning in 2627. With regard to the work and community engagement requirements. This provision requires most non exempt adults in the ACA or the Affordable Care act expansion population to meet work and community engagement standards to maintain medi Cal eligibility. The estimated impact to General Fund in 2627 is a cost reduction of about 102.4 million. Approximately 1.4 million MEDI CAL members. Adults upon full implementation are projected to lose coverage and for the budget year is an estimated 233,000 individuals. In terms of the programmatic impact, we anticipate increased administrative workload for counties, higher risk of coverage gaps for vulnerable adults. And a potential increase in uninsured with regard to the six month redetermination. Again, this policy applies to the ACA adult expansion population and requires the redetermination of eligibility every six months instead of annually as it is today. We estimate a cost reduction of about 74 million general fund as a result of this in the budget year. Projected a loss of coverage for about 289,000 individuals in the budget year growing to about 400,000 upon full implementation. With regard to the provision with reduced federal matching for emergency services for unsatisfactory immigration status adults, this policy reduces the federal matching rate from 90% to 50% for individuals who were previously covered under the ACA Affordable Care act expansion but for their immigration status. Estimated cost of a 658 million general fund in the budget year growing to 872 million in 2930. HR1 also amended the definition of who qualifies for federally funded Medicaid Full Scope Federally Funded Medicaid this change goes into effect October 1st of 2026. HR1 narrows the definition of qualified noncitizens that remain eligible for federally funded medi Cal. If the state were to provide full scope coverage to this population, the Projected cost is 786 million General Fund in the budget year growing to 1 point billion General Fund ongoing the Governor's budget presumes or proposes that the 200,000 individuals whose status will change will transition to restricted scope Medi Cal as part of the governor's budget. HR1 also reduces retroactive coverage for medi Cal. Today when an individual applies for medi Cal. Retroactive coverage could go back three months effective January 1, 2027. Retroactive coverage is limited to one month for the ACA optional expansion Adults Estimated cost reduction of 9.6 million general fund in the budget year There are also changes to state financing mechanisms, our healthcare provider taxes and state directed payments. HR1 and the related policies restrict permissible structure and size of the health care related taxes including our managed care organization tax and our hospital quality assurance fee. These changes really will have a significant impact on the budget and I know that there's a subcommittee hearing specifically on this topic in the future. The Governor's budget assumes continued federal approval pursuant to the various transitions of the MCO tax through the end of the calendar year. So December 31, 2026. So that is what the budget assumed and we got confirmation from the federal government that that is the case. But both of these provider taxes and the HQF are vital funding mechanisms for the Medi Cal program with regard to actions taken to date and in the Governor's January budget. We released an HR1 implementation plan at the end of January. This outlines our strategy for implementing particularly the eligibility and enrollment provisions of HR1 outlining our policies, having links to our all county directors letters also acknowledging that we are still waiting future federal guidance particularly related to the work and community engagement requirements. But the implementation plan provides detailed guidance on how we plan to implement these changes with the knowledge we have to date. We had two all comer webinars at the beginning of February to review the implementation plan with our stakeholders. Over 2000 individuals participated in these calls. As we've discussed previously in this committee, the guiding principles that we are using to really inform our implementation as we think about implementing HR1 is to automate to protect coverage. Use state and federal and other data sources to verify eligibility whenever possible. We want to reduce paperwork and the administrative burden for our members. Communicate with clarity and connection Deliver clear plain language information in all required languages ensuring that our messages are culturally appropriate and clear to members, families and their caregivers. Simplify the renewal experience we are streamlining the MEDI Cal renewal process with clear forms and simplified six month renewal steps to help keep members enrolled, educate and train those who serve MEDI Cal members. Provide counties and our coverage ambassadors which we're at about 7,000 now with training, practical tools and ongoing support to assist members effectively. Provide timely and transparent communication to our members. Sharing updates through multiple channels so individuals have ample time to prepare for these upcoming changes and then streamlining processes and efficiency wherever possible. The budget also includes up to 4 million for our health enrollment navigators to provide kind of that in clinic hands on assistance for members with questions and then additional 17.5 million as part of a budget change proposal which we'll go into in more detail later for an outreach campaign to communicate with our members. We launched a text process a text in February to really just start building awareness for the 4.6 million members who would be maybe impacted by this just kind of this is more the information sharing them, directing them to resources and then in the summer we will be launching more of a take action type of campaign. With that I will happy to answer questions.

Speakers Good morning. Jennifer Troia, Director of the California Department of Social Services as your agenda outlines, HR1 makes extremely significant changes to federal funding and eligibility rules for CalFresh, which is California's implementation of the SNAP program. These changes will affect millions of Californians who rely on food assistance as a basic safety net. We have talked about this before and I will highlight again that we are approaching implementation with three commitments. First, mitigating harm through timely decisions, guidance and communications. Second, making evidence based data driven decisions and third, maintaining transparency by engaging consistently with county partners and Californians who are recipients of the program. The Governor's budget estimates that once HR1 is fully implemented, up to 553 individuals will lose CalFresh benefits and by fiscal year 2728 the annual reduction in benefits would reach $1.6 billion. Those benefits are currently reflected in the federal budget. Depending on the cost sharing, they may be partly related to both the federal and state budgets in the out years. Consistent with your questions, I'm going to focus today on two pieces, the expansion of the able bodied Adults without dependents time limit rules and the Department's work to improve CalFresh payment accuracy. I will just briefly mention though that the Governor's budget does include funding to reflect the change as of October 1, 2026 to the administrative cost sharing between the federal government and the state government and counties. It's a reduction of the federal share from 50 to 25% and that means a $532 million increase in our budget, 383 million of that is general fund, 150 million is county funds. So first, focusing on the ABOD time limit, under the federal rules, individuals who are identified as ABODs can receive CalFresh for only three months in a 36 month period unless they qualify for an exemption, meet the worker community engagement requirements, or live in a county with a federal waiver. HR1 keeps this structure but significantly broadens who's subject to the time limit, and narrows who can be exempt from the time limit. Specifically, HR1 expands the ABOD age range to include adults up to age 64, lowers the dependent child threshold from 18 to 14, and eliminates exemptions for people experiencing homelessness, former foster youth and veterans. Exemptions remain for people with a child under 14, people who are disabled or pregnant, those exempt from CalFresh work registration, those who are determined to be unfit for work and that's a quote. And newly under HR1American Indians. HR1 also significantly restricts the ability to qualify for waivers of these time limit rules. The waivers are now limited to counties with unemployment above 10%.

statewide waiver and we now qualify for waivers in only seven counties. Statewide, there are about 2.7 million Californians who are CalFresh recipients ages 18 to 64. Based on existing data, we estimate that roughly 1.8 million of them or 2/3 already qualify for exemptions. That leaves approximately 950,000 adults whose exemption status is unknown or who may become newly subject to the time limit. Of those, the Governor's Budget estimates that about 110,000 will ultimately be determined exempt after screening, about 179,000 will meet work or community engagement requirements and approximately 665,000 may lose CalFresh eligibility at full implementation. California will begin implementing the time limit as of June 1, 2026, so we're a few months away. The federal rules that require exemption screening require those screenings to occur at application or recertification before the time limit can be begin, so most current recipients will be screened during their next regular recertification. So the implementation of the policy will essentially be staged over a 12 month period, which also supports the county workload being spread out. Our guidance emphasizes maximizing exemptions using available data. As I mentioned, we've already identified a significant number of people, almost two thirds who are exempt based on data we have, and we continue to look for additional data sources that we can use to and rely on to grow that number as much as possible. Where data is not available, we are focused on conducting thorough screenings and engaging individuals who are not identified as exempt to help them connect with qualifying work or community engagement activities and to keep their benefits. We're expanding policy training, holding statewide partner engagement sessions, maintaining regular coordination with dhcs and with other SISTERS agencies and departments, creating toolkits communications to support counties and clients through implementation. Finally, I'll note in response to your question that the CalFresh ABOD administrative funding is based on the estimated number of ABODs and the average time that counties reported needing to complete ABOD specific activities in a survey from a few years ago when we assessed the CalFresh administrative funding methodology. So second item of focus is payment accuracy improvement, which as we have discussed previously in future years will have a significant impact on whether or not the state also has a percent of benefit cost share in the benefits which have historically been 100% federally funded.

legislature approved one time investment of 20 million general funds to improve CalFresh payment accuracy under HR1. The state's payment error rate will determine whether the state shares in that cost of benefits and what percent. So we're conducting both quantitative and qualitative analyses to understand the primary drivers of payment errors at a deep level. Early findings point to several key issues households not reporting income changes or not reporting them as extensively or accurately as needed, inaccurate reporting of shelter expenses or counties not acting on available information in the case records. While this work continues, we've already begun implementing some improvements that were clearly needed, including consent based income verification through a company called truv, expanded use of the work number, which helps us to identify earnings across household members, and automation of a payment verification system to improve detection of unemployment and disability insurance income. As our analyses progress, we will prioritize, among other solutions to help improve payment accuracy. In closing, I'll say The changes to CalFresh under HR1 are far reaching and we expect them to have significant impacts on food security, health and well being for many Californians. We are fully committed to mitigating harm to supporting counties and to maintaining access to CalFresh wherever possible, while also preparing for the substantial impacts that we do still expect to see in the coming years.

Thanks will go ahead Sir Good morning,

Great, you ended on my favorite topic. Okay, let's get into it. I'll start with you will

Does all do all counties receive funding for indigent care?

Since the 1991 realignment up until 2013, did all counties choose to use indigent care? Use that fund to care to provide indigenous care?

So there's an option to not provide indigent care.

It's up to them if they want to use it from this fund or not.

So counties have they have to require, they have to provide the care they have. All counties received the funding. It's up to them of how up until 2013 at least how they use whether they paid for it from that specific fund or any other type of fund. And they have the ability to restrict what type of care and who gets indigent care?

So there is scenarios where one county could have the ability to restrict it so drastically that there's only a small population that would be eligible for it potentially. And what would be the difference between that and emtala? Does anyone like.

So a county can restrict it so much and just say, well, we're just gonna go with emtala.

Okay. And will since 20 or from 1991 realignment up to 2013 or even till now, there has the funding has been static and hasn't increased.

that

Okay, and then is it is this appropriate to how I'm understanding that some of that funding for the past since 2013 counties have utilized for other programs?

Okay, both of you shared numbers. I'm trying to find if about 2.2 million people are going to lose Medi Cal. But indigent care will maybe only jump to 1 million. Where are the other 1.2 million?

Okay, thank you so much, Director Toria. You gave and I was trying to capture all of the different amount of exemptions and so forth and who are no longer exempted. And you threw some numbers out. I'm particularly interested in the age increase from 54 to 64 year olds now getting added into ABOD for that specific group. What are the exemptions for the older population? Deputy Director

I thought the American Native Indian was no longer.

I'm trying to find which ones that age group might qualify for.

Yeah.

So that's the list because some senior before I started director, some seniors don't wait to. What is it? The 64, 65 to claim their Social Security. They do it at 62. So you have the two year gap. Would that exempt them if they start collecting their social.

It's only a disability.

So you're like hey, I retired. I no longer have. This is my static income. They have to now prove 80 hours of volunteer or something.

One thing I was going to add. So that's all on the unfit to work. I was just going to add that there is an additional exemption for individuals who are responsible for the care of an incapacitated person, which could also be individuals in that age group or who are regularly participating in drug addiction or alcohol. Alcohol treatment and or rehabilitation program.

period unless they meet those other exemption criteria.

I will just add that we saw a disproportionate of the total people now having their benefits at risk under HR1. We saw a disability disproportionate increase in that age group because they are less likely to have a child in the home under 14. And so that is a large portion of the people who are newly subject to the rule under HR1.

so there is the Minimum Nutrition benefit pilot program and that is tied to another group of people in the Elderly Simplified Application project which has been in place for several years and played a key role in the number of older adults that we've served and their retention. So they've stayed on the program for a very long time. They now are subject to the time limit. What is unique about that population is they have very long certification periods up to three years. And so when their certification period comes up, which could be anywhere from one month after June 1 to 35 months after June 1. At that time we will first offer them an exemption screening and do everything we can to explore possible exemptions. If that is not something they are eligible for then we would keep them on the elderly Simplified Application but have to apply the time limit rules. The minimum nutrition benefit pilot will not last that full 36 months. So some may lose connection to the pilot, others may not because they won't have that exemption screening until much further out.

So we do just. We collect income information and we do have kind of an ability to. To self like an affidavit to really kind of say that you have this amount of income and you qualify for the exemption. And so that is a process by which that can be captured.

A sworn statement that you.

And if I can add. One of the things that we're doing in our payment accuracy efforts is creating a new tool. I mentioned it. It's a company called truv and it allows for an easing of the income verification. So with consent of the participant, we can actually access, temporarily for the purposes of verification, their bank account records that provide that on a much more reliable basis. So that it's not if you don't have a payroll system. So we use like the work number where there are payroll systems to verify employment. But if you're not working through a payroll system and we are trying to verify regular income that you receive, we can do that better through your bank account. So for folks who give us consent to access their bank accounts, we can then hand them a statement that says, this is what it looks like you are regularly earning. Does this look correct? If it does, you sign that and that's what verifies your income. So we hope that will be a significant improvement.

That's correct. That Self act on the banking is the same across all populations.

So under HR1, we mentioned in our talking points that the exemption that existed prior related to people who were experiencing homelessness no longer exists under that exemption. Just that experience and the information in the file that you are homeless would have qualified you for an exemption after HR1, it's a little bit more complex. What we have to do is consider the barriers to employment and to work that the experience of homelessness has created for the individual. So under that category of obvious unfitness to work and the process by which the eligibility worker makes that determination, they will have to engage in a discussion with the person to explore whether the experience of homelessness is what is called keeping them from work. If we can make that determination documented in the case record, there is no verification that would be needed, then the worker can apply that exemption. So while there are some restrictions under HR1, we still have some flexibility that existed prior to explore that with the person.

So in. In Medi Cal, HR1 does not have a similar exemption and there is no ability to request an exemption for people experiencing homelessness. So primarily, the strategy to protect individuals experiencing homelessness from losing Medi Cal coverage primarily would be through the medical frailty exemption. Not exclusively, but we think that will be a large driver. And we know that this population may not be accessing health care today. And so our ability to exempt them on the basis of medical frailty through an ex parte process or just using data that we have will be limited. And so they're vulnerable. So our goal really is to make sure that the services that are in place today, the benefits in Medi Cal that are specifically designed to reach this population, such as enhanced care management, street medicine providers, clinic navigators, are right there and able to assist them with the self attestation process as part of the initial application as well as through the renewal process. So the goal really is to make sure that these individuals have the touches and the assistance with getting their medical frailty captured as part of their application. And then also ideally through the billing and service data that we can get through care provided to them that we can then use automatically to exempt them.

in the middle of this.

to do double work on that. Okay. Going back to the UIs population and the application of the work requirements, specifically in the undocumented within the UIS population, they would have to certify that they are working with an attestation.

Not to exempt them.

Yeah.

So is there going to be. Is there a scenario like do they have to submit like where they work or anything like that?

That is it. So there's no. We shouldn't be worried about any of that data collection being collected since it's a state funded program from it getting transferred to the feds. In terms of. This is the amount of people. This is. They won't know where they're working. They won't know.

Okay. On MCL Tax Director,

of lost revenue post November, post December, which I'm glad we got those extra six months. Are there any creative ways in supplement or.

Okay. Do we know maybe lao? I'm not sure if you know or maybe in your research there. Dr. The percentage of people losing based on administrative work versus eligibility.

Okay.

Okay. And to whomever, maybe LAO or Permanent Finance, have we quantified or how much federal funding we're leaving on the table with people falling off of enrollment and that impact that has on serving the rest of people on.

On the CalFresh side, we estimate the total reduction in benefits in 2728 to be $1.6 billion. As I mentioned before though, the benefits are currently 100% federally funded. And then in the future depends on our payment error rate. On the administrative funding side, there are some savings to the state for the disenrollment of individuals, but the total administrative funding is about $3 billion a year from all fund sources versus the benefits which are about 13 billion a year.

Okay. And I brought this briefly up in the bigger budget hearing around

It's creating savings for the state so we work against each other if we get people back on because then we don't have those savings. Anything more you can share of like the fire under our bums to still be able to do this, knowing that we remove the savings and further increase the structural deficit. What's the incentive for departments?

And similarly, we share the moral commitment. We work at the Department of Healthcare Services. And so while we recognize that reduced caseload does represent savings to the budget, we are taking every step we can to mitigate harm to our members as a result of the changes in HR1. So one illustrative example where I think the state budget and the moral commitment align really is work requirements because they particularly impact the Affordable Care act expansion population, which has a 90% federal match rate. The estimates that you heard today about the 2.2 million members expected to lose coverage as a result of HR1. And we're actively working to try to do better and bring those numbers down. I think the medical frailty exemption in the work requirements policy was still in development when the governor's budget was released. So we hope to be able to share those updated numbers through may revise, which should show ideally less disenrollment. What that means is that there's, you know, while there would be some more general fund expenditures for those members that we're retaining coverage for, that also brings significant amounts of federal funding as well, which on the balance helps offset some of the impact to county indigenous medical care programs

And then just to kind of wrap things up, yes, there is like a. There is a slight state savings for individuals. Disenrolled. But as stated, there are other costs within HR1 for the state, namely around provider taxes that result in a net increase in state costs due to the effects of HR1. And then any individuals while disenrolled from the Medi Cal program, they would, you know, they would still require health care in certain settings and that would increase costs throughout the rest of the system as well.

So I'll say a few things and then Alexis, please feel free to add. So first, I will say I do want to clarify that we do provide funding related to the implementation of the ABOD time limit. I think the counties are disagreeing with us about the amount of that funding. So we assume that it takes a certain amount of time to screen individuals. We believe it will take longer. So we are having those meetings and conversations, but and continuing to sort of unpack those details together with them. And if there are any updates we would provide them, they may revision. So I just want to provide that clarity. Second, I want to just acknowledge that this is an enormous lift. It's been many, many years since we've implemented the ABOD time limit, much less implemented it on a statewide basis and for people who are experiencing this level of vulnerability. So we are doing a lot to Work with the counties in preparation in terms of the guidance for releasing the work groups, with community members and with counties, the communications we're planning. It is an all hands on deck on our part and on the county's part to prepare. But I also don't want to underestimate that it is very difficult to feel ready. I will also emphasize that we are implementing as of June 1 because that is the time it takes to automate the implementation. And I will acknowledge that many other states have gone before us in implementation and that we have taken the time that we believe is necessary to implement on a consistent basis and with the automation that is required. And then also acknowledge that as I was describing most individuals we received that screening over a 12 month period. So it does also give us some time as we ramp up to full

We have not really been implementing the ABOD time limit in a really long time, so it is hard to say. But a few years ago we did a reassessment of the CalFresh administrative funding that was required by the legislature. It resulted in a significant increase in CalFresh administrative funding. And one of the the things that we did in that process was survey the counties on the time it takes to complete certain tasks that included screening for ABOD time limit for individuals who are eligible. Though again the counties were not implementing at the time in any significant portion. So I think part of what they are expressing and you'll probably hear from them is that they believe that that survey is not as recent or as helpful as it could be in identifying the workload for this implementation. That said, the rules of the ABOD time limit itself have not changed. It's who it applies to that is dramatically changed. And given that we are asking them to conduct thorough screenings to try to really dig in and identify as many exemptions as possible. And that process is admittedly complex. So I think that's some of what they are pointing at out to us.

In terms of county readiness, I think we're using a lot of the lessons that we learned through the public health emergency unwinding redetermination process and you know, the significant engagement. I think we visited every single county during that process to really on the ground hear how things were going and plan to do that again as part of HR1 implementation. As we noted in the Governor's budget, we did not have a proposal to fund county admin and governor's budget, but we are working, working with them and really, as Tyler noted, continuing to refine our numbers in terms of how many individuals may be automatically exempted or you know, we can use the data to satisfy kind of meeting the work requirements. And so continuing to refine our numbers, continuing to talk to the counties about what this new workload is and what it might take. And so those conversations are ongoing. And then in terms of county readiness for indigent care, this is, there's a lot of transitioning, there are a lot of changes in the Medi Cal space not only because of HR1, but because of some of the 2025 budget actions as well. And so continue to work on that with our counties. I know it's a broader conversation beyond the Department of Healthcare Services and just what this county engine health mean and given the state's fiscal constraints in the out years, how to think about that as well.

doing, what they will be doing or what I would like them to do.

I mean, I think it would be the status quo. So they each have their programs, they do it differently, they have the money that they have. And so, so it's going to be this patchwork across the state, except for those 35 in rural and north. I would like to see a standardized program administered in a standardized way, perhaps between the state and the counties with a standard benefit package where you use the Medi Cal managed care network of providers to organize and deliver the services. So if you are in Medi Cal now, you lose your enrollment, you move on to a county uninsured program that looks largely like Medi Cal. I know that's really dreaming big, but that would be ideal and address some of the equity issues that are raised in my paper.

All.

I'm Jackie Contrer.

is it on? Okay. Good afternoon, Chair Menjewar. I'm Jackie Contreras, the Director of the Los Angeles County Department of Public Social Services. We proudly serve the largest county in California and we are committed to keeping our fellow Angelenos connected to food assistance and health care coverage. If we cannot, we will see an unsettling increase in the kind of outcomes we are all dedicated to mitigating. The starkest example of setbacks would occur around homelessness, which could reach new heights in LA county because more people would be forced to choose between paying for food over rent and because the resources currently available through Medi Cal managed care would be inaccessible to many who would lose coverage. Without the release of the $20 million for CalFresh eligibility in the current year and the CWDA requested $373 million investment for CalFresh and Medi Cal eligibility workers in this budget, we will bear witness to significant distress as a consequence of inaction, a painful setback for the progress we have collectively made. Moreover, the unmitigated impacts of HR1 will be disproportionately felt by LA county residents. By example, we represent 32% of all MEDI Cal enrollees statewide who will require manual verification or exemption. And you heard earlier from the departments how involved that process is. More than a quarter of a million Cal Fire recipients will now be subject to work requirements, including 81,000 unhoused individuals in LA alone and 32% of all statewide humanitarian immigrants and refugees who will lose their calfresh imminently reside in LA County. All this considered, we are taking a whole of government approach to harm prevention in the face of these devastating impacts, launching an intergovernmental implementation effort, close coordination with county departments, community based partners, school districts and municipalities, and the private and philanthropic sectors as well as those we serve. Our keep your benefits online outreach campaign has already generated over 8.6 million views. We are expanding on existing partnerships with local managed care plans to support outreach to shared members as well as to help identify and develop work and community engagement opportunities. We are also working closely with the calsos consortium to improve identification of migrant and seasonal farm workers and prioritize program updates to student attendance screens to better capture qualifying hours. To support compliance with work requirements for those not exempt, we are developing a centralized, user friendly portal and application platform that connects MEDI CAL and CalFresh customers to work, volunteer and community engagement opportunities in real time and reduces the paper chase for participants and county staff alike. Leveraging Technology is a key aspect of our approach and it is not a panacea to navigate and manage these new changes. It is essential that we invest in our county eligibility workforce. We have approximately 6,800 eligibility workers that are highly skilled and committed and they will need ongoing training and support to implement these new complex provisions. They will also need help with the massive workload increase. We estimate that an additional 750 eligibility workers will be needed given it takes up to nine months to hire and train an eligibility worker. We already are behind. I urge the administration to release the 20 million to support counties to implement the CalFresh changes that are just 10 weeks away. And please support the 373 million investment CWD is advocating for to add more CalFresh and Medi Cal eligibility workers in this budget to keep those we serve connected to life saving benefits. I want to thank you for your leadership and partnership. It is critical in helping us find effective, compassionate pathways forward to effectively and equitably serve our neighbors across California.

Good afternoon, Chair Menjevar. Honorable members of the committee, thank you for inviting us. My name is James Williams. I'm the county executive for the county of Santa Clara. As you've heard from my colleagues from LA county and you'll hear from the rest of us, HR1 poses an unprecedented crisis for access to health care and food for Californians. And we need deep partnership with the state, which is why we're grateful you're holding this hearing and grateful for the leadership of the legislature in response. Santa Clara county is home to nearly 2 million residents for the last largest county in Northern California. And even in our county, admittedly one of the wealthier parts of the state, one in four residents, over 465,000 individuals, rely on Medi Cal for access to health care. And 133,000 of our residents rely on CalFresh for access to food. Our county operates Santa Clara Valley Healthcare, which is the largest public health care delivery system per capita in the state, the largest in Northern California. We have four hospitals and 15 clinics, two trauma centers, one of only three comprehensive burn centers between Los Angeles and the Oregon border. And we are the single largest provider of healthcare services, both for medi Cal beneficiaries, but also for Medicare Beneficiaries in Santa Clara County. Medi Cal is our single largest revenue source for our health care delivery system. And HR1 is projected to result in over a billion dollars a year in lost revenue to our health care system. We are facing this crisis head on. In Santa Clara county. We have moved swiftly in response. Our community brought forward Measure A, an emergency sales tax measure which received overwhelming public support. It is the most we can legally do in asking our local voters for revenue support. And though Critically needed, the 330 million that measure A will bring in, and it was overwhelmingly passed by our electorate, doesn't Even make up 1/3 of this revenue loss. We're already moving swiftly given the revenue impacts that we already face as a health care system, to increase efficiencies, to take actions. And this mid year our board of supervisors adopted 200 million in ongoing reductions, including the deletion of hundreds of positions in our health care system to maintain a balanced budget. And so we need deep partnership with the state. We're not coming asking for a handout. We're coming in seeking partnership and asking the state, even though it cannot eliminate the devastation being brought by HR1, to work collectively with counties to mitigate, not exacerbate those impacts. We urge the legislature to move swiftly in three key areas. The first, which was, I know the focus of a lot of discussion in panel one this morning, is to preserve enrollment in Medi Cal and Calfresh. And the committee heard about just how much federal funding is at stake. With preservation of enrollment, the work rule requirements and more frequent eligibility redeterminations are going to impose huge numbers of coverage loss. We are very concerned about that and we're also concerned that the state is exacerbating that harm with the changes that have already been made and the changes that are proposed to be made to the state only Medi California program, which just in our community alone provides access to health care for over 70,000 individuals. We support Senator Durazzo's SB 1422 to end the enrollment freeze on state only Medi Cal and restore full scope coverage. We're grateful that the state agencies, as you heard today, are moving forward with as much as possible automation. We urge that to continue swiftly. But that is not going to be sufficient. We know that for many of these populations there will need to be handholding and that means resources and support on the ground at the county level with eligibility workers and employment counselors and others to help people navigate through these work rule requirements. We are doing our end of things. Our departments are working collaboratively much like in LA county, our Parks department, for example, partnering with our social services agency on ensuring access to volunteer and other opportunities. We have partnered with our labor unions, including specifically seiu, on changes in how we do our work with our eligibility workforce very collaboratively to be ready for and to move forward with these extraordinary changes being brought by HR1. But we also need the Legislature to support the California the County Welfare directors association's ask for 373 million in general fund augmentation to support all 58 counties in the resources that we need to keep people enrolled. Second, the state has to account for the unique and critical role that the public hospital system plays. Public hospitals are only 6% of California's hospitals, but we operate 50% of the trauma and burn centers and train more than 50% of the physicians in California. California public hospital systems serve 80% of the state's population. These systems provide backbone health care services, obviously to Medi Cal beneficiaries, as you heard from my colleagues in LA County. But these are critical services that are provided and available to all Californians and that form the backbone of access to healthcare for all Californians. INS There are a number of specific cuts in HR1 that uniquely and specifically devastate hospital systems like ours that disproportionately rely on Medi Cal funding. And we need partnership with the state to mitigate those impacts. And that's why, at a very, very minimum, we support the California Public Hospital Association's request for parity with private hospital hospitals in not having the state force counties to pay the state match for inpatient hospital stays for Medi Cal. But the reality is even more partnership will be needed to ensure that these community and statewide public hospital resources remain available for Californians. And then finally, you heard about the relationship between the state and counties on indigent care. Yes, counties have this obligation under section 17,000 of the welfare and Institutions Code. The reality is, post proposition 13, which was one key piece that was left off of. I very much agree with the LAO analysis that was presented this morning. But one key data point on that timeline that was missing was the passage of Prop 13. That is how counties became dependent on a fiscal relationship with the state and unable to on their own raise adequate revenue to support obligations like Section 17,000 that existed since the 1930s, we rely on that state funding to support public health to support indigent care. And we will have to revisit what that relationship looks like. And let me share one sobering stat. Before the Affordable Care act expansion in our county over 20% of our patients were uninsured. Post expansion, it's about two and a half percent. So the state was right in revisiting the fiscal relationship for indigent care with the Affordable Care act expansion. Now, sadly, we're going to see much of that progress lost and that will again require revisiting the fiscal relationship between the state and counties to ensure continued access to care. So we're grateful for your leadership and your support. We urge you and your colleagues to recognize this crisis for what it is and to act with the urgency necessary. Given the timelines you heard about nine months to hire an eligibility worker.

The timelines to put the things in place to try to mitigate these harms on Californians. Thank you so much.

Good Morning Chairman Javar thank you for the opportunity to speak on the anticipated impacts of HR1 in San Bernardino county and the communities we serve. Today I will outline outline the scale of our programs and the operational challenges counties face in implementation and the resources needed to best align our opportunity to strengthen rather than weaken California's safety net. My name is Gilbert Ramos, Human Services Assistant Executive Officer for San Bernardino county, and I serve as the County Welfare Director overseeing medi CAL and CalFresh in the largest geographical county in the nation and one of the largest counties by population in California. San Bernardino county represents roughly 5% of the California households, but about 6% of the 2 million households receiving cash assistance in CalFresh. Since 2022, demand for food assistance has increased by about 6% and as of January 2026, CalFresh serves more than 366,000 residents. Nearly 70% of the recipients are Latino or Black and CalFresh provides roughly 9 out of 10 meals in the emergency food system, which includes our Food bank partners. Through efforts of our eligibility workforce as well as deliberate partnerships with managed care plans like IEHP, we have reduced the uninsured rate from nearly 14% to 8%. Medi Cal now serves more than 950,000 individuals in San Bernardino. These figures reflect both scale scale and vulnerability. When rules change, impacts are immediate as well as widespread. As we've been talking about this morning, HR1 introduced significant changes including work requirements, changes to eligibility related to the immigrant status, and more frequent redeterminations and shorter renewal cycles. These changes increase daily workload, requiring staff to process applications and renewals, follow up on incomplete submissions, and conduct outreach to hard to reach populations and coordinate with many partners. Staff must also take on new responsibilities like applying these work requirements that we haven't had to do in many years, verifying exemptions, tracking compliance, and managing more frequent case actions. We estimate that 27% of our CalFresh recipients are at risk of losing benefits and in Medicaid. With the increased administrative churn among the ACA expansion adults, it will likely rise our uninsured rates and with 44% of our residents relying on Medi Cal administrative coverage loss directly worsens health outcomes and increases the unincompensated care rate that will likely be required to pick up that will likely be required to be picked up locally. Without adequate resources, HR1 will increase the staff workload, increase our customer interactions and will require tighter coordination across our systems. This increased risk of administrative coverage loss is all it is. It is not true ineligibility. So what this translates into is additional staff and system capacity, needs, more intensive eligibility level case management and increased administrative complexities. We estimate that in order to accomplish this we need about 580 additional full time staff. With adequate state funding, recruitment can begin immediately. Without it, implementation will be hampered. HR1 also increases the county share of CalFresh administration costs by 50%, changing the match from 15% to 22.5%. This is going to cost San Bernardino an estimated $10.67 million over the next two years and then ongoing every year after that. Many counties lack the revenue to absorb this increase. As was just mentioned, we respectfully request to support our for a cost neutral calfrest match waiver to stabilize operations and prevent reductions in service during implementation, thereby ensuring counties can focus on effective and timely service delivery. Further, it will help avoid deepening disparities by reducing the administrative churn among populations already facing disproportionate barriers. San Bernardino county is already acting in ways to reduce administrative loss. We are data sharing and outreaching with our IEHP partners and other managed care plans where we do outreach and coordinator interventions and with alignment messaging. We have early warning systems in which we're tracking trends and intervening early so that our beneficiaries will not lose coverage. And we have internal coordination across our human services departments to where we can conduct renewals timely and ensure that our beneficiaries do not lose coverage as well as we recently implemented a co investing opportunity in order to have staff prepared specifically for Medi Cal eligibility along with Inland Empire Health Plan. These strategies reflect lessons from the continuous coverage unwinding that outreach must be frequent, multi channeled and targeted within CalFresh readiness. The ABOD requirements will increase the need for outreach, verification and case management. Our approach focuses on maximizing exemptions and minimizing administrator burdens. We are updating staff training, improving client materials and launching targeted outreach to individuals who will not meet the work requirements who may not need to meet the work requirements for individuals who are going to be exempt and for individuals who need support maintaining those benefits without sufficient resources, the consequences are direct. A working parent could lose calfresh due to mis verifications. Seniors could lose medi cal due to confusing renewals or a person experiencing homelessness just may miss on the outreach entirely. These are preventable administrative losses that we have to avoid. Our county stands ready to implement HR1, as so do many other counties. And we are doing what is in our authority to do so. But readiness alone is not enough. Without sufficient resources and a cost neutral CalFresh match waiver, the burden will fall on the families that we serve and the staff supporting them. Thank you for this opportunity to provide my testimony and for your participating, ensuring that our counties can implement HR1 in a way that protects access to the food and health care that we provide. Thank you so much.

So if we don't put up the extra 7.2%, 7.5%, what pretty much happens is that there will be a reduction in overall funding. That's what it boils down to because with, with the way the match waiver works is that there is funding available that the feds. The fed shifted, if you're familiar with how it shifts. So it used to be 50, 50 and now it's 25, 75 and then that 75 is split between the state and the counties. So whatever amount we don't put up, whatever the amount the counties don't put up, that is money that's out of the CalFresh administration. That's money that's going to be lost from the state that matches as well as what the Fed matches. So we may not without a mathematical calculation, if you will. Overall though, we don't just because we don't put up our seven and a half extra 7.25%. What will also happen is that we lose state and federal. So it's a force multiplier that we lose altogether. So I mean if we just say just easy math, we just like, if we don't put up like our extra seven and a half percent, we possibly

an extra, I don't know, like 10 or 15 more percent on that because of the match that we

So if the state before. So if the state is going to cover their extra. Their part, and if the counties don't, the state doesn't give the. The full amount to y'. All.

We have to match it.

There's a statutory match. That happens. And so what. What happens sort of in practice is you can't draw down those additional. So if I don't have an extra $9 million to put in for that 7.5 increase, then I don't draw down those dollars to. In order to support the program. So the. Then essentially what I'm stuck doing as an administrator or welfare directors here is probably not covering the caseload.

I'm not actively working cases. I'm not probably processing things. I may not be enrolling people because that's how we pay for staff. And they would be much will be

Potentially. Potentially, just again, you have to size your program to the dollar.

So tangible consequences could include there'd be less dollars for staffing, for resources that would result in potential impacts to the error rate that we're trying to mitigate and keep low. It could impact timely processing of applications. The administrative dollars fund ourselves staffing. That's for the most part what it. What it funds. And so if we do not have funding for our staffing, staffing is who does the work. And so if we do not have staffing to implement the ABOD requirements to do the cases, the applications, it is fewer staff to do more work that we've already talked about this morning.

Yeah, I wanted to add because. So we're one of the counties that have not secured that match. And if we don't secure that match and we lose both the state and federal funds, our estimate is that's $250 million loss to our current program. This isn't to expand it, it's just to maintain it. That translates to 1500 staff. And for us, that means likely layoffs. There is no way that we can sustain the program without those. Those additional dollars, let alone add more people, let alone add more people. So this is just to try to maintain it. And if layoffs do come, that means, as my colleagues have highlighted, that means that we will not be able to be as responsive. That means longer wait times in the offices. It means longer wait times on the phone. Right. It will make it incredibly difficult to maintain all the access points that are helpful and then it consequently will impact the error rate.

And the error rate may means penalties, so that's going to be additional cost. So it just sort of feeds on itself and continues to get worse.

Our measure A is bringing in $330 million.

We still have an extraordinary gap. Our projection regarding HR1 impacts to our health care system alone is well over a billion dollars a year in lost revenue. And that's from a variety of HR1 related causes, some of which are related to enrollment loss, which has been discussed extensively today. But There are other HR1 related cuts that were alluded to by the DHCS director, including cuts to directed funding that goes to hospital systems specifically and that disproportionately harms public hospital systems.

That373, by the way, that number is a statewide number across the.

And the numbers I'm talking about in terms of the billion dollar impact is just a Santa Clara county number.

I can share my perspective as a medical center CEO. And what we are doing, we have implemented across the board hiring freeze. We have significant reductions in registry and overtime utilization. We're reducing purchases where we're able to deferring non essential capital and deferred maintenance projects. We're also seeking increased rates and contracting opportunities so we can bring in more revenue. And we're launching a comprehensive multi year strategy to improve building and collections. In addition, LA county has, as you know, has proposed a tax measure that will bring in to the county about a billion dollars a year. And of that about 220 million will go to our system, LA Health Services. Now when we're projecting over a 700 million dollar, 45% will go to re establishing a county indigent program. But I do want to emphasize, you know, we're projecting a $700 million shortfall per year. That is very helpful, but will not solve that.

Yes.

Yeah, we're doing a lot on the budgetary side. So as I mentioned, we've already brought forward 200 million in ongoing budget reductions in our healthcare system. We have had a very significant hiring freeze countywide in place since the passage of HR1. We have already cut hundreds of positions in our system. We are consolidating service lines and pursuing a number of the things my colleague from LA county mentioned, including revenue opportunities where available. One of the challenges for these public hospital systems is that Medi Cal represents such a large percentage of our revenue. And so unlike private and nonprofit systems that have more ability to cost shift to other types of payers, e.g. commercial insurance payers, they represent such a small percentage of our payer mix that while we're seeking those opportunities too, the reality is there's just not a lot there that we can do given how significant a role we play as safety net systems and how significant Medi Cal specifically is, is as our primary revenue source.

Back in 2005, the state made a funding change in the Medi Cal program where it required counties to put up the state's match in Medi California for inpatient hospital stays. So the way the Medicaid program works, you get federal money, but you only get it if you put up state match. The state provides that match for inpatient hospital stays for private and nonprofit hospitals. But since 2005 for public hospital systems, we have to pay the state match. And so one of the concrete and specific proposals that we are asking the legislature to move forward on, and this is a proposal being brought by all the public hospital systems, is to give us parity with the private hospitals and have the state fund the state match just like the state does for private systems for those inpatient hospital stays for Medi Cal.

I just wanted to add, thank you for the opportunity. We are doing a number of things as well to try to prepare for HR1, including. We are already a health and human service agency. So we have a lot of good cross collaboration. We're focusing on how do we prevent disenrollment, you know, how do we keep people on, you know, is there other types of waivers that are available to us that we can pursue? But specifically we're also trying to, you know, think about how to, you know, the reality is we have to think about how do we stand up this indigent care program that has existed since 2012, 2013 and the complicated fiscal relationship we have with the county vis a vis AB8, 1991 realignment that provided some of that funding that's now been shifted away. And so we're just trying to really grapple with that, leveraging our federally qualified healthcare clinics and a number of ways to get ready. My county unfortunately is a central valley county. We are not a high income county. So adding local measures like many of my colleagues have done, is not a good opportunity for us because a lot of our cities are already at the state maximum and or will be if their current sort of initiatives are successful. And so that's just not really a option for a county that serves a lot of agriculture based individuals.

So the way it worked pre ACA was you would enroll through an eligibility worker stationed at our human service office. They would assess you for all the programs and ultimately this would would be the last resort program. And basically you were able to get some level of primary care at the county clinic. That's the only provider we allow in the system. No other private clinics, no other private providers, just the county clinic. But it was primarily a system that you came through us through the emergency room. The hospital calls us up and says, I got this in indigent patient. They receive this life sustaining care or whatever and you've got a $300,000 bill, how are you going to pay it? And so a lot of them, unfortunately pre ACA came through a lot of the emergency room route because the hospitals also look at how do they capture those costs. And so we anticipate it might be similar going forward because again, because it's a last resort program, a lot of people don't seek this out, they just go without until they end up in a situation that's life threatening.

So what I meant by that was so like some of the previous panelists talked about how in county indigent programs, the eligibility standards, the aid, how it's administered, all vary. And they were really talking about standards, standardized care. Right now under Medi Cal you have a standard system. Right. The challenge with standardizing eligibility and all of that in Article 13 county like mine, that was sort of talked about in the previous panel is that that just increases cost and it doesn't give you flexibility to manage the budget, which is what you got to live with. Right. Because I may have to give you a larger set of services than I. Than I want to. So what I'm. What I was suggesting in my comments is, you know, because I was a former eligibility worker, I know the state has restricted Medi Cal aid codes. So could the state keep these individuals in a restricted Medi Cal aid code and a limited set of services that would not put them back on indigent care? They would have standardization across the service, the services, they would already have a system to be a part of. And that is just another way that this population could be managed, similar to what we do with a lot of our population regulations today that don't qualify for a full scope medi count.

Case work?

So I think this is really a situation where it's a both and conversation even, even in our current environment. Right. The automation is needed to streamline a lot of the. The eligibility eligibility work. What you heard earlier was we may get something that has, I think it was true what was talked about. So we may get something that sort of verifies a person has a certain income. The eligibility worker will very likely still have to verify that.

Like that somebody has to touch that when it comes in.

So we don't have to necessarily pursue that information. We're getting it and now we can verify it with the customer. So those are some of the things that we see. A lot of times this work is invisible to people. Benefits Cal is a great tool for people to be able to apply, but there are people behind the scenes that have to process all that information. And, and so that's where a lot

So we're actually creating, trying to create a system outside of CAL SOS because it's really about an individual finding that opportunity to either work or volunteer in order to meet the requirements. And so we're trying to develop a system that we can capture so we'll use a third party administrator. We're working with philanthropy to come up with dollars to be able to pay for this so that people can go in, they can find opportunities, we can recruit people to be a part of it and then we can match them and that's one way that they will be able to meet their eligibility.

One of the ways that we're working in San Bernardino is like with our CalFresh ET plan our program, we work with our workforce development board and have opportunities to place them, train them, place them, have them meet their work experience that so we think that we could probably expand that to help meet before. We haven't had to have them meet their work requirements. It was just an opportunity for them to gain through the ENT program where we believe this might be an opportunity where you can actually meet work requirements. Now additionally we're teasing the idea of the in calworks we have what's called a WEX program. We have subsidized as well as unsubsidized work experience WEX program. And so it's similar to like an ENT program but there might be some opportunities where we might be able to. There might be an opportunity where we can take a look at how that could maybe be teased out in for the CalFresh population as well. And those are the two things that are coming to the top of my head right now.

And I would just add to that is one, I think counties having a deeper conversation with the state agencies as to what that work requirements look like and medical frailty and all those things really would be helpful as well as one of the things that we are contemplating in Tulare county is how do we help people who are just shy of meeting the hours. I'm working part time, I'm to going, going to school, but maybe I'm only getting 72 hours and I need 80 or I need 65. And that's a much more difficult population where we think, at least in my county than maybe someone who just needs a volunteer placement for a year.

Yeah, we can send them to the park, but you know what I mean. So it's your service industry people, it's your ag people who are just shy of those hours and how do you engage them to keep them from disenrolling? And that's I think, another challenge that we welcome a further conversation on my

It's in addition to. So we usually try to piggyback on the campaigns that the state puts out. But we've created this website where people can go to and get updated information because things are changing sometimes on a daily basis and we want to make sure they have the most recent information. But we try to work in coordination

No.

Yes, Department of Finance, you're correct. As part of our agreement, as part of the 25 Budget act, there was placeholder language to allow for dollars for counties towards abod county administration, as you sort of learned more about, you know, what those requirements might be. So we are, you know, aware that truck is the legislature's interest and hope to have something for your consideration soon.

That's correct.

So not necessarily. I think I mentioned soon. I don't necessarily have think we have to wait for the May revision for this because there's existing authority.

Yeah. Thank you. So, Jennifer Troia, Department of Social Services it takes a statutory change because the matching requirements are currently enshrined in statute. It's something that we have done before, as I think was referenced in other prior times. That statutory change is perfectly feasible as far as we're concerned and we're happy to provide technical assistance on how to accomplish it. What I think you also heard, which we agree with, is that it does, as compared to a world in which the state and the counties put up our full matches and draw down the full amount of federal funding, it does reduce the overall amount of funding that is available for the program because the only thing that would be matching a portion of the federal funds is the amount of the state funding, not the actual county funds. So the overall result is less funding for the program. But the counties, by not providing their Match and still drawing down. Our match are asking to minimize that loss of federal funding by the state, still putting in our share. And my understanding of the proposal is that it's meant to be temporary, so they would like to see that happen for a number of years. So in terms of those impacts, obviously full funding for the program versus the loss of those additional, both county and matching federal dollars will result presumably in service impacts. But at the same time, if the counties were not providing it and the general fund was also not provided, there would be an even more significant loss. So I think that's what's before you.

This does not increase the state funding that would have been provided under the current sharing ratios. Assuming that the counties had been putting in funding, we sort of ignore whether the county funding is there or not there and put in what we were expecting to put in anyway. Normally we wouldn't put that in unless the counties were also putting in. And this is a change to that.

I'm not sure what you mean by state allocation.

If there is a match waiver, they would receive the full amount of general fund.

Which then draws down to federal funds. Not as many federal funds as would have been received had they also provided.

The idea that's being proposed, as I understand it, is that it would not.

Just to clarify, sort of under current law, although the state has budgeted, sort of presuming counties are going to match their full allocation. Under current law, the state would only contribute a portion that matches the county contribution. So counties don't sort of put in their full share then although the state has set aside in the budget the full allocation, we would only do a portion of that. So under current law, so as proposed by the counties with a match waiver, the state would still put forward their full allocation. So together we would sort of pull down more federal funds than the alternative okay. So that's sort of the consideration for the administration for the legislature from counties.

It's something that we're expecting. So CMIPS for others benefit is the case management information and payrolling system that undergirds our IHSS program. It's one of, as I was referencing earlier, where we are attempting to use as many data sources as we have access to as possible to create those exemptions on the front end that prevent the need for screening and more detailed work and prevent the risk of loss of benefits. There's a possibility of using CMIPS data if we can figure out all of the legality, the access to it, the privacy, like all the issues that we

If we're able to get through all of those issues, there's a possibility of using it for multiple purposes. One, the data could help us on the end of the recipient for documenting a disability. On the provider's end, it could document their income and also document that they are a caregiver of an incapacitated person. Both of those things are Exemptions to the HR1 work limit or time limit requirements. So if we can, we'd like to use it to create additional exemptions on that front end for both recipients and providers.

We do have information and I'm going

to join for more detail on that. But we do do data matching with them and maybe.

So the EDD data that is available to us now is primarily wage data from the past because it is reported by employers on a delay and, and so we receive it on a further delay from edd. So it is helpful to check previous income eligibility determinations, but it's not particularly helpful for some of the kind of live determinations that counties need to make. What is your income today? It also does not provide work hours, it only provides wages. And so there are some limitations to how we can use that for the, this particular rule.

work hours very limited, and we have to address the latency.

Hi, good afternoon. My name is Christopher Stephen Balma. I'm a proud member of SEIU Local 721 and I'm a client lead for eligibility worker from Ventura County. I've been with this I've been in this field since 2019. I'm one of 13,455 eligibility workers across the state represented by SEI who help people apply for and keep benefits that help them keep their families, keep their dignity, keep their life opportunities and in many cases, keep them alive. Today I'll be talking to you about HR1 and its impact on our SEIU brothers and sisters across the state, the communities they proudly serve and the leadership we need from the Legislature and the Newsom administration. In my job we handle renewals of benefits, but we also process any changes that might have happened between the renewal deadlines, like if someone finds a new job or someone moves out of the home. Additionally, we we work face to face with clients who come into the office without an appointment. Even though we've known HR1 was coming, there's no way for us to prepare for the cripplingly long waits our clients will experience as we try and navigate the many new requirements and exemptions. Our clients are actively in a crisis and my site currently has my supervisor and I overseeing a unit of six eligibility workers and we will each contact up to 10 to 15 clients in each eight hour shift. Many cases are for what we call non needy caretaker relatives. That's when a relative of a child is requesting aid for a child because their parent isn't present for any reason. For example, in Ventura county we've had a lot of children whose parents have been detained by ICE or deported. So another adult needs assistance to supplement the additional needs of these children they are caring for. Some of these relatives who have stepped up are seniors and don't have health insurance from work, so we will often screen them for Medi cal as well as CalFresh. The best way for us to continue to provide the quality client centered services we need to is to have solid training. But training takes away from our work and since we already are short staffed and overwhelmed, and since Ventura county currently has a hiring freeze, I don't see a clear way through the through this without people falling through the cracks. I chose this career because I myself am a child of immigrant parents and a native of Ventura County. I'm here today thanks to the programs like these. I know what it's like to need them and I know what it's like to succeed in life because of them. I'll never forget my mom's desperation as she tried to meet all the requirements for the program. She needed to be able to to make sure we didn't go hungry and she was doing everything right. The process was just really confusing to her. I remember she would go to her appointments with a grocery bag full of all the papers from the last year just to make sure that she had whatever they needed. So that experience made me want to be the person helping on the other end, making the process as easy as possible. If I can speak for my Ventura county colleagues and clients, we are scared for our communities and for ourselves as workers. While our clients may receive notification on changes of their eligibility and what they need to do, in many cases these notifications are not language accessible for them or they are unhoused and may not be able to rely on getting the information they need when they need it. So my colleagues and I will have major workload increases on both Medi Cal and the calfresh side. And in many cases we may see our workload double or even triple. As of right now, we have only been trained on the screening of ABOD and work registration requirements. Nobody has been trained in the actual follow up needed for people that are required to be enrolled in these programs or the requirements themselves. So in short, meeting our clients needs will take time and it'll take training. Right now there's no plan for how we're going to bridge that gap between where we are now and where we will be with the HR1 requirements. We must be properly resourced for this to work. Lives depend on it, communities depend on it and communities depend on us, the workers. I'm so scared of what it could mean if California doesn't fight the harm caused by the HR1 cuts and our brothers and sisters and kids go hungry. Every lawmaker in the state should be as scared as I am. We can't just shift the costs onto the counties. There's just no way that they can handle this burden alone and and we will all pay the price, even the wealthiest Californians, if our systems fail. We must work to implement HR1 in a way that does the least harm possible and keeps the most folks enrolled in coverage While supporting us, the workers. We love doing our job, but it hurts to know that if we are not prepared, families will be impacted and lives will be impacted. Thank you for the opportunity to share with you and we hope to work with you moving forward.

Chairman Javarto

Thank you so much.

Senator.

One day

This job has made me question. Maybe I need a doctorate in public health to help. So maybe one day. Mr. Palma, I'd like to start with you. You're a lead four. So I can imagine that you've been doing this for a little while. How long does it take you or a lead one? I don't know if that's a position. I'm just assuming if there's four to sign people up to confirm they're eligible. The state is assuming that it takes 79 minutes. 79 minutes. Have you timed yourself and your colleagues lately?

So for abacus, yes.

Okay. And then you talked a lot about training. What additional training is needed for you all to be ready for all the HR1 impacts.

Death by PowerPoint.

Two part question here is are you getting a lot already questions from people asking about hey, is this going to impact my eligibility? Already I'm hearing this in the news. Are you already fielding a lot of questions around this?

As of now, do you believe on at least your team, do you have enough personnel, enough colleagues to do your current work now and the additional eligibility requirements coming down?

Oh, wow. Okay. Thank you. Corinne. With the removal of PPS, are clinics going to stop seeing the UIs population?

Okay. It's just maybe like you mentioned, stopping services to absorb the cost.

Okay. And before and during the time that indigent care was being provided and there are a lot of people not on health insurance. Were clinics an avenue that could sign people up for indigent care or if they walked in, they just. You still had to provide care, but there wasn't any connection to some kind of coverage?

So once people start falling off medi cal and they're now on indigent care, coupled with the removal of PPS rates being taken away, that's two different kind of hits clinics are going to be taking.

Okay. Thank you, Ms. Brigham. Yes, I said it right. Okay.

Okay. I. That reference, I have no idea what that means. I'm so sorry.

Sorry. So I've seen different hospital systems. They're like, you know, this is. It's not. We're bleeding here. Like we need to cut a service. We're going to close a labor delivery ward. We're going to stop this service. Can public hospitals close different kind of wards in their hospitals, Stop services like non public hospitals can?

And I think I've heard, you know, public hospital systems like they're always barely making by scraping by. I can't even imagine how you, even if that's where you're at right now, it's your baseline how much worse that can be.

Public hospitals, I'm taking this quote from the previous panel trains 50% of our physicians. Can that also impact the slots available

Thank you, you three. I appreciate you coming and adding to the conversation.

All right, time for public comment on the three panels. Only on the HR1 impacts. And if there's any little one that's going to be providing a comment, please bring them to the front of the. It's a long day, y', all, so I have to limit to no more than a minute, please.

Thank you.

Thank you.

I had to write down what I

And I'm here to speak on what's going to happen with the kids if Medi Cal and calfresh is cut. Some children are dealing with mental behavioral problems.

to find another progressive revenue options and

Thank you so Much. Thank you.

Am.

Thank you, thank you.

Thank you.

Nobody get rich on a $700 a month grant.

living in the country and in San

So considering the skyrocketing cost of groceries,

cannot afford to lose a single dollar of their cash assistance.

be drowned in debts and desperation.

Okay, so I just want to add at the end that we should not

sure to look for

We saw the upward increase in wealth

revenue taken from, from our billionaire.

Hello, my name is Christine o' Keefe and I live with cerebral palsy. Thank you for giving me the chance to speak. Hello, my name is Christine o' Keefe and I live with cerebral palsy. Thank you for giving me the chance to speak today. I have had a speech impairment my whole life and people do not always understand me when I talk. That is why I use aac Augmentative and alternative communication. AAC helps me share my thoughts, express myself, and be part of conversations that matter. I also work as an AAC mentor, helping other people with disabilities learn to use communication devices so they can express themselves, too. Seeing someone say something important for the first time on their device is incredibly powerful. The life I have today is possible because of Medicaid and services from my regional center. They provide personal care, support and equipment like my wheelchair and my AEC device, which allow me to live independently and do my job. These supports are not luxuries. They are essential. Medicaid means dignity, independence, and having a voice. When you protect Medicaid, you protect the lives and futures of people with disabilities. Thank you.

Hi, good afternoon, everybody.

I'm here with Empower.

She children. I'm sorry, my brain is just completely smushed. I am a nursing mother with two little ones and it's been quite, quite a couple of hours here. So I'm here talking about how important

were starting getting support.

even having conversation about cuts.

at a state level that we remember

administration is telling us that we can't, we say we can't. And when they tell us to thank you go down, you know, we go up.

Thank you so much.

Raise your hand.

group is hand in hand.

I didn't have medica or attending care. I couldn't take care myself. I've had medi cal since I was born.

cal and attending care, could not take care of myself.

in 1989, I had

Please support us.

Hi, my name is Diana.

I'm here because CalFresh and medical are important to me. The changes that are happening will directly impact me.

at risk of losing assistance.

Our industry has been having a hard time.

I'm not alone and that soon I can also be at risk of losing medical. If we don't do anything, people like me will lose access to CalFresh and Medical. Thank you so much.

And every single one of those families

A real kid, a real mom, a

Like two things that are non negotiable. And so I'm just asking you to. We have to figure out another solution. Like cutting off families is not an option. And so please, we beg you, think

Thank you. Yes, ma'.

Hi, I'm Gabby Davidson with the California California association of Food Banks. I first wanted to highlight our request to expand CFAP to provide state funded.

Okay.

Okay.

Thank you,

Thank you, sir.

Thank you. That was a good question.

Thank you.

Good afternoon, Chairman Javar.

Thank you for agendizing Cal Food as part of the conversation on HR1.

food faces a 90% cut in funding this year.

unprecedented increase in in need this year due to HR1. With humanitarian immigrants beginning to lose their

more than ever to ensure we can

Thank you so much.

Thank you, Madam Chair. Andrew Shane with cwda. I'll be brief. Appreciate the discussion with counties. I just wanted to respectfully add to the record on the first panel on funding for CalFresh ABOD implementation. To be clear, there's not new funding in the Jan.10 because the caseload declines offset any new resources. So there's not new money for county readiness. And so we really appreciate you asking about the 20 million. Glad to follow up with you about that. Second, the state is right that the underlying methodology under the CalFresh entitlement means that it can be adjusted for caseload over time. But that will be too late. That will be after we've lost people and people potentially coming back. And so what we really need is the upfront ability to hire to staff and train. And as you heard from Christopher, once those screenings happen, it opens up a can of worms. And that's really the time we're talking about to build trust to keep people on the program. It's that intimate information needed to get to those exemptions. Thank you.

Good afternoon, Madam Chair Connie Delgado on behalf of the District Hospital Leadership Forum. These are the 30 district and municipal hospitals that are independent public hospitals that serve the local safety net, serve as a local safety net in many rural and underserved communities. We are smaller than our larger designated public hospital counterparts, but we are no less essential to the communities that we serve. We appreciate the focus of Today's hearing because HR1 is not just a coverage issue. It's also a direct threat to public hospital. Hospital's financing structure that supports care for these vulnerable communities. Today's hearing materials do a good job of highlighting the impact of HR1 on Medi Cal provider taxes, state directed payments and other financing tools that California relies on to support the safety net for district hospitals. The combination of rising uninsured rates and weaker financing tools is deeply concerning. These risks are especially serious in rural communities where we are often the sole providers of care. In those communities, we urge the legislature to protect coverage, minimize administrative churn and defend the financing tools that keep public hospitals stable.

Good afternoon, Madam Chair Omar Al Tamimi here with the California California Pan Ethnic Health Network. Here on behalf of CPEN and the California Working Families Coalition. We know that HR1 is having and will continue to have devastating impacts for California's most vulnerable communities, particularly communities of color in our immigrant communities. Most of the federal cuts as a result of HR1 have gone to fund ICE and as a tax relief for the most wealthy. Californians are looking to the legislature to implement progressive revenue strength solutions to recoup that lost revenue on the state level and make sure that we're not continuing to cut our safety net and impacting our most vulnerable communities.

Thank you. Thank you, Madam chair. Kathy Sunderling McDonald of Catbird Strategies.

Truv is a consumer driven income verification solution that covers traditional payrolling, gig work and self employment. It is designed to reduce the administrative burden for both individual clients and for county workers. With TRUV implemented, which we're working and pleased to be working with the state to do in our IT systems over the coming months, we'll be able to both income verify as well as help calculate the hours worked for purposes of the work requirements. And we look forward to partnering with you and the stakeholders as we move ahead and try to help mitigate the impacts of incidents. Thank you. Thanks.

Thank you.

Christine Smith, Health Access California we appreciate the work of the Department of Health Care Services for their work to include stakeholders in the implementation of HR1. We do urge the legislature to minimize further loss of coverage beyond what's federally required, including utilizing resources to track populations losing health care and not applying federal work requirements to undocumented Californians.

Good afternoon.

association, we appreciate the department's efforts to reduce coverage for loss of loss for Californians and the technical assistance being provided to counties as they prepare for implementation. And we ask that the additional emphasis, an additional emphasis be placed on community based providers. There is a significant amount of information flowing from counties directly to beneficiaries, but providers are often the most trusted messengers

And ensuring providers receive direct technical assistance and clear guidance when will better equip them to help patients maintain coverage and avoid disrupting care. Thank you so much.

Thank you.

State association of Counties appreciate the very robust discussion about indigent care and what

While some counties are and were able to provide a more robust set of

Better than EMTALA and emergency Medi Cal, but not much better. Certainly not equivalent to medi cal.csac with our partners estimated the costs to provide

to lose their Medi Cal coverage due to work requirements. And even factoring that very basic historic

2 and 5.5 billion.

public safety and other programs.

public hospitals and to county eligibility workers, we anticipate impacts to counties of six to nine and a half billion dollars a year. That is clearly not something that counties can shoulder on our own.

legislature and the administration to find out best solutions to to minimize the harm of HR1 onto the people we all serve.

Thank you.

My name is Carol Crooks and I'm a recipient of Medi Cal and ihs.

a bad place without it.

I'm co convener for Berkeley, East Bay, Grey Panthers. I'm a member Hand in Hand and other groups and I'm on the county

I'm really worried about the cuts, the pending cuts and I would like to see the coverage extended at the same

It worries me that there are people that will lose their coverage and their attendance and will be stuck living in a nursing home which is actually more expensive if they don't have ihss. So I hope you will support ihss. Thank you.

Good afternoon and thank you for the accommodations.

I am with Carol, a member, a

up the health care and now very

of all people, seniors and disabled adults.

California got hit and we're being targeted. I want to honor that. That's a very difficult situation spot to be in. But please do not repeat the big beautiful bill and then cut more deeply into the work that supports especially immigrants

So I have come to learn so much about the importance of in home

Thank you.

Good afternoon. Erica Murray with the California association of

Really here just to thank you for the recognition of the value and role

care clinics, many of which are FQHCs.

a dramatic impact on public hospital systems

primary care to keep people out of the hospital.

Kelly Brooks here this afternoon representing the

I have worked for county governments for over 25 years and HR1 is probably the most harmful and devastating thing that I have seen come from the federal government in my time representing counties.

job talking about about the multi system impacts. So it's human services, it's health, it's

It's going to impact people coming in and out of our jail system.

estimate what the impacts look like and I think a lot of work is being done to try to think about

And I think some of our Urban counties that were on the panel are obviously doing good job trying to do interdisciplinary work and also think about thinking about leading in our their communities. I think in terms of mitigation, we're

We need money to help support our public hospital systems. There's an ask for $500 million. We need money for indigent care. We need resources for the eligibility work and we may need resources for behavioral health.

Good afternoon. Nora Angelou with Children Now. The changes driven by HR1 put children's health coverage at risk. Unprecedented Medicaid and SNAP cuts will impact millions of California families threatening kids access to care and basic nutrition. When parents lose coverage, kids do too. Work requirements and new hurdles for adults, including eligibility restrictions for immigrants, will have a cascading effect on children health coverage and access to care. State budget choices will determine the impact on kids. While DHCS needs resources to implement federal changes, the legislature must prioritize policies that keep children covered and protect access to care.

Good afternoon and thank you. My name is Maida Castello Garcia, here on behalf of Ultimate Health Services, a nonprofit federally qualified health centers serving more than 600,000 patients across Southern California each year, many of whom rely on us for essential health care coverage. The vast majority are Medi Cal or covered California enrollees, the most vulnerable communities in our state. And for them AltaMed isn't a preference,

We serve 1 in 10 Medi Cal patients statewide and 1 in 5 in Los Angeles County. We're here because the safety net is already under serious stress. HR1 is projected to drive California's uninsured population from 2.3 million to as many as 5.4 million people. The work reporting requirements, more frequent redeterminations and restricted access for lawfully present immigrants. That alone is an enormous challenge for providers like us. Compounding that pressure is the elimination of prospective payment system rates for individuals with unsatisfactory immigration status. PPS is a vital lifeline for primary care, helping clinics like ours in underserved areas. Thank you. Keep delivering, but thank you. Thank you.

Beth Malnowski, the SCA of California. Really just want to second some of the remarks made by panel two and panel three in particular. As we think about the work we're doing right now in partnerships, consumer allies and DHC has to do everything about we can to keep folks enrolled. The work of eligibility is just so important. Really appreciate your deep conversations on that today and really encourage you to think

not in training but staffing up to support this work both for CalFresh and Medi Cal eligibility. Speaking to some of the public hospital conversation you heard here today, we absolutely agree that new investments are needed. $500 million ask that we are proudly doing in partnership with the Public Hospital association to make sure sure they are there to serve care, provide care to everyone.

to the fact that as was noted today, we need to make sure we are supporting our counties and reinvesting in these programs. As was noted, it's been many years

how to stabilize and support these programs. They're going to need a lot of support from us here in Sacramento to get it right. Encourage this conversation. So thank you.

Good afternoon Chair and members Manuel Pazargin with the California Immigrant Policy center, proud co leads of the Health Fraud Coalition. Before the passage of HR1, the state voted to implement deep Medi cal cuts. The LEO's estimated 1.5 million immigrant Californians losing coverage by 2030 due to these cuts is unacceptable. The proposal to exclude immigrant Californians from

Cutting out refugees, asylees, survivors, domestic violence,

We urge you to roll back cuts

proposed cuts to Medi Cal.

are protecting our immigrant communities while simultaneously

programs and serviceless services they desperately need

care system that supports only some thank you.

I can't do that but Good afternoon Michelle Gibbons at the County Health Executive Executives association of California. Really appreciate the dialogue and the ability

dramatic the impacts to HR1 are on behalf of local health departments who many administer indigent care programs, but all will

We just welcome the opportunity to continue

funding for these indigent programs or alternatives that would alleviate the burden. Thank you.

Sarah Daquette on behalf of the rural

the 40 small smallest counties in California. I just want to uplift the message

workers and how we can keep people

what we had before resources were redirected around our 35 smallest counties have very

where our county's authority been downscaling and

we're really concerned without a deeper partnership

going to risk the fiscal solvency of

We just really look forward to working

Thank you.

from 99% of the state's zip codes.

largest provider of Medi Cal inpatient services

It's not just Medi Cal recipients who will be impacted.

500 million budget request from the California Public Hospitals.

Thank you.

Ma'.

What is causing the delay? Thank you.

Thank you very much. Sam Wilkinson with In Child Poverty in California, we urge the legislature to protect medical for all. Under the proposed budget, California mirrors federal work requirements for undocumented community members enrolled in state funded medical. That means if people lose access to work because they are afraid of immigration enforcement in their workplaces or don't have a commercial driver's license to drive a vehicle, not only will they lose access access to Medi Cal but their enrollment freeze will also bar them from coming back once they address those barriers. Adding work requirements on top of these realities is unjust and harmful. We urge you to reject these policies to push back on harmful HR1 cuts and support the 200,000 lawfully present immigrants who are being kicked out of Medi Cal by the Trump administration. And as we stated earlier, the. As was stated earlier, the state response must include progressive revenue streams. California. California's wealth was built by workers and communities, not billionaires and corporations. We are the fourth largest economy in the world because of our people who grow our food, who teach our children, who care for our elders and keep our state running every single day. California must act now to unrig our tax system, close corporate loopholes and recoup the resources lost to billionaires. Thank you.

Good afternoon Chair. My name is Benny Minchow with the California Immigrant policy center. In two weeks we will begin removing

and asylees, many who assisted the US government and military abroad like in Afghanistan.

families off of benefits, including mixed status households.

CFAP into a state funded program that could support these populations. Losing CalFresh due to HR1 and beginning automation now to serve all families impacted by HR1, including immigrants. Thank you.

Good afternoon, Madam Chair, Alpena County Community Food Bank. I'm Ezra Pemmantouan. We would just like to record our

Cal Food funding, carrot program, CalFresh outreach

Thank you.

No.

Hola. Buenas tardes, mi nombres.

Soy de san francisco mission action.

No solos immigrantes familias in California. Parallas Personas, gracias.

leg, broke this clavicle, broke these ribs.

Okay, thanks.

My name is Rose.

I am asking you to. Asking you to prioritize raising new revenues

I hear stories from domestic workers every day.

So thank you for any support.

Good afternoon. My name is Ethan Julian.

My name is Zamora and I'm a community outreach coordinator for Somcan and UKNAI Filipino, a direct and referral services program serving the Filipino community here in Sacramento and in San Francisco. For all my life, I've had the privilege of being insured through my mother's workplace. However, not everyone has that privilege. Many of the folks in my community are currently covered through Medi Cal. That includes seniors, disabled folks, the youth. And many of them are about to lose access to healthcare and benefit programs like IHSS as a result of HR1MEDI California. MEDI CAL is deeply important to me because it ensures that people in my community can access the care that they need to live healthy, stable lives. And for many of us, healthcare isn't a luxury. It's something that we depend on to survive and to show fully in our work, our families and our communities. And I urge you to reject any new cuts or barriers, such as work

Cal, especially for immigrants of vulnerable communities.

It's the only way.

Good afternoon. My name is Jerich Ruiz and I'm a community outreach coordinator, for example A

And I urge you all to reject

medical and IHSS is not just an option.

alive and remain in our homes.

don't just happen on paper, but they show up directly and physically within our own communities and our own spaces. Without Medi Cal and hss, our communities would live without basic care.

cuts that reduce access to medical.

services for low income families and the

Thank you.

Good afternoon.

Many of our consumers rely on IHSS

by exploring revenue measures that can support

critical programs that people with disabilities rely on every day.

Thank you.

I'm with the California alliance for Retired

The statewide organization representing about a million members.

the opportunity to take a stand against

The old one was taking crumbs off the table.

The cascading cruelty is raining down pain

around, make a stand, be a model for the country.

Medi Cal and in home supportive services

revenues to prevent cuts to these as well as other life sustainability sustaining programs for millions of Californians.

of billionaires who don't pay their fair share.

to make sure these cuts do not

Thank you, sir.

Thank you.

cleaners across the state.

leading voice for those workers who support

California more than ever to set forth

We want to reject any new barriers

are uplifted, are valued and people with

Thank you.

Thank you.

our medical systems the most. And many need ongoing care to survive.

become inaccessible for those moved to restricted scope. Medi Cal.

is incredibly dangerous and it can often be more costly to these systems than preventative care. If up to 2 million people can lose care because of Medi Cal, how many of those will be people with disabilities who die because they couldn't access care? If done right, the state budget can save lives. Everyone deserves access to the medication and

Thank you.

All right.

So this is all my fault.

Good afternoon. Chair and Committee Staff Tyler Sadwith, State Medicaid Director and Chief Deputy Director at the Department of Healthcare Services. I'd like to provide a brief overview of the budget change proposal and the associated trailer bill language related to HR1 planning and implementation. To meet the requirements of HR1, including significant policy changes to Medi Cal eligibility, benefits and financing, the Department requests total Expenditure Authority of $33 million Total funds of which 15.5 million are general funds in budget year. This consists of 4 year limited term resources equivalent to 17 positions, 2 year limited term resources equivalent to 12 positions and contract resources. With these resources, the Department will be able to make significant changes to Medi Cal eligibility statute, regulations, policies, timelines and processes related to the application, renewal and change of circumstance requirements for eligibility reduce duplicate coverage and redefine allowable immigration statuses that qualify for federal matching funds, implement work and community engagement requirements and other significant eligibility changes and recruit and hire for positions and Establish contracts to meet major financing changes that are in H.R. 1 to implement the required Medicaid provisions in H.R.

The Department proposes trailer bill language to change related state statute that will enable the Department to modify existing medi cal eligibility rules to regularly check and update member addresses using trusted sources. Conduct six month eligibility redeterminations for certain adults reflect eligibility updates for federally funded full scope medi cal based on immigration status, reduced retroactive coverage periods and establish work and community engagement requirements. The proposed changes are necessary to align state law with mandatory provisions of HR1. We have posted the trailer bill language on the website of the Department of Finance and we have a fact sheet available on the website as well.

Mainly with lao. Overall, the budget change proposal reflects the additional workload that the administration expects to face in implementing the HR1 requirements. We're continuing to review the specific budget requests to assess whether they're appropriately aligned with the underlying streams of work. And we'll inform the committee staff if we identify any concerns about the budgeted amounts.

Yes. Thank you. Senator. We are proposing for contract resources mostly to be in budget year with the exception of financing related contracts in budget year plus one. Given some of the staged implementation of those provisions in HR1, so many of them take effect in later years. Things like new capped limits on the amounts of state directed payments that go into effect in 2028. Changes to the MCO tax which came up earlier, as well as the hospital quality assurance fee and other health care related taxes. So we will need both budget year and budget year plus one to sort of plan and accommodate and adjust for those financing related changes for contract resources. The remaining the resources that we're requesting are really for budget year given a sort of focused implementation plan given those changes go into effect in 2027.

This issues regarding the general fund solutions as part of the 2025 Budget act related to undocumented and unsatisfactory immigration status. Californians to address the protected statewide budget shortfall. The 2025 Budget act included some very difficult policy changes to achieve a balanced budget and achieve some general fund savings. The 2026 budget includes updated estimates for ongoing savings from these policies. I will provide an update on the solutions related to undocumented or unsatisfactory immigration status or UIS populations in the medical program. First, the Medi Cal Expansion Enrollment Freeze. This went into effect January 1, 2026 and this applies to individuals age 19 and older who do not have satisfactory immigration status or are unable to establish satisfactory immigration status. It does not include qualified non citizens under the five year bar nor individuals claiming permanently residing under color of law or PROCOM foster children, former foster youth and pregnant individuals. New applicants in this group continue to qualify for restricted scope Medi Cal if all other eligibility criteria are met. The budget projects a savings of 600 159.2 million general fund cost reduction in the budget year for this change at this time we do not have updated enrollment or kind of actual enrollment information for this proposal as it just went into effect in January. Typically takes two to three months for us to have the actuals and we do post that information on the open data portal. As a reminder though, as part of the 2025 Budget act, it was estimated that in the budget in the Current year about 91,000 individuals would lose coverage as a result of this proposal. The next proposal relates to state only monthly premiums. The Budget act includes implementation of a $30 monthly premium for unsatisfactory immigration status for individuals 19 through 59 excluding pregnant individuals, foster children and former foster youth. This does not go into effect until July 1, 2027. The Budget act of 2025 also included the Dental Benefit Elimination for individuals with unsatisfactory immigration status who are 19 years and older and this goes into effect July 1, 2026. This also excludes pregnant individuals, foster care children and former foster youth. The Budget as savings of 134.6 million general fund in the Budget year We are currently actively doing outreach to the impacted populations, including using our dental Fiscal Intermediary contractor to publish provider bulletins, outbound calls to impacted members, mailing targeted notices and FAQs on this change, and promoting this also on social media. At this time, the Department is on track for the implementation. The next proposed policy relates to the elimination of State only Prospective Payment System or pps rates for FQHCs and rural health centers. This was discussed in a couple of the panels earlier today. The 2025 budget ends pps for state only services for individuals with unsatisfactory immigration status. This goes into effect July 1, 2026. This falls outside of the Federal PPS policy because this is state only. Population clinics will be reimbursed at the applicable MEDI Cal fee for service rate and the fee for service delivery system and or the applicable negotiated rate between the Medi Cal managed care plan and the clinic in the managed care delivery system. Before the Medi Cal coverage expansions in the recent years, these state only services were not covered at all by Medi Cal. So the state did not provide any funding for these services to our FQHCs. So this policy continues the payment for these services, but at the rate that is really available to all other providers. The estimated general fund savings are about a billion dollars in the budget year, growing to 1.1 billion in 2728 and ongoing. And then the final policy related to the UIS population is securing state rebates on pharmacy for the UIS spend in the Medi Cal program for our undocumented and UIS population. This we went live with this in October and we're using a rebate aggregator that consolidates and manages rebate negotiations, invoicing and collection activities from pharmaceutical manufacturing manufacturers and leverages kind of by that increased buying power to promote greater cost savings. Drug rebates are invoiced quarterly and then due four months after that quarter. So there's a bit of a lag in just the collection of it. The Governor's budget estimates 1/4 of drug rebates of 123 million general fund to be collected in the current year and 3/4 of drug rebates totaling 42335 million to be collected in the budget year. That concludes kind of the overview of the proposals related to undocumented in UIs.

Thank you. Will you like to add anything else? Can I jump into. Okay, I'll jump into questions. I know Director, it's too early to tell about the medi Cal enrollments and you mentioned Wednesday online. Is that tied also to how much savings we've done so far or is that going to come together or do we have savings information before we have enrollment?

And they are married so we can't get one data point ahead of the other.

With May being five months into implementation, we'll have a more.

Okay. On the premiums we allocated funding for this current year right now $28 million. Can you give me an update of what we are and what platform, how we're going to be collecting that?

Would the $28 million actually be used in this or is the RFI process going to bleed into the next budget year

Yes, I understand that, but there's a potential, since we haven't selected a vendor yet, that the $28 million isn't going to be used in this current year.

So since we haven't selected, we don't know how the premiums are going to be collected just yet.

Okay. Going on the dental benefit elimination there. You know, we did this before, it lasted for a long time where we eliminated dental benefits and then we were able to bring it back. Why did we bring it back? Is it just because we had funding at that time to bring it back?

The health impacts that we saw during that time, was it eight, nine years that we had the elimination? Are there any that we can prevent this, go around of removing the dental benefit? Is there something that we were able. That we saw in those nine months when we had no dental coverage for all of the Medi Cal population, regardless of age that we're taking as we go into round two of this elimination is.

Okay.

Just wondering if we learned any. Yeah. What we can prevent or not make as dire. And then, Director, you were talking on the pps. I just want to see if I heard correctly. We didn't always give this payment.

So did this start when we expanded to children in 2016, or was this correct? Okay, so for about 10 years they've had this payment and it was new for me when the public hospital said they also get.

That's because they run.

It's just that they have.

Okay. And then can you also clarify on the last one, the rebates? Yes. You said the current year, we're only going to collect three quarters, but it's going to be for the full year. Why?

In the first panel, second panel, someone made a comment about. The doctor made a comment about to prevent the triggering of code 17,000, maybe potential, you know, that he was suggesting, Would it be, would it cost us less if we made a different kind of state, county partnership for those that fall off of Medi Cal, what it costs us doing that versus indigent care? And when I say us, just health systems as a whole, because if I say us, they of course will have our savings. I'm just wondering if. Is that the first time you've heard that from the panel? Has that been any kind of conversations with stakeholders on that?

What are the kind of ideas and opportunities in this space? And so I think there are many conversations about, you know, we used to have lip.

type program, which is right before ACA was kind of. That was the bridge to reform. It was almost like a statewide county indigent program. But there was some, a little bit more state investment in that space. And so I think, you know, part of this is given the projected state fiscal challenges in the out years, this is, you know, something to be very mindful of.

Three months. It was through negotiations with the legislature on that. And you know, the cure period and kind of trying to provide extra opportunities to remedy the situation is that we've

I think it was just via conversations. And you know, we have this cure period in Medi cal, which is 30 days in kind of the normal processing where an individual can come back and almost correct the information so that they can maintain eligibility. And so we do not have information at this point on how many have, you know, since January to now have availed themselves to kind of come back in and address the eligibility. We don't have information on that.

Just one thing I wanted to add in response to you asking about potential ways to mitigate cost pressures on county indigent systems as we have more UIs disenrollment our understanding is that those who are disenrolled UIs, individuals who are disenrolled due to administrative burden, or let's say the community engagement requirements, for example, would generally retain access to restricted scope medi cal which provides emergency and pregnancy related services. So that is sort of a kind of backstop as far as the most pressing services are concerned.

and thank you so much for the accommodation. Simjita Mitra, Department of Finance and thank you for the opportunity to speak today on the proposed trailer bill language related to the California Necessities Index, or cni. This Governor's budget proposal makes two technical changes to align statute with the most current status of data availability and the calculation of the California Necessities Index. First, the proposed trailer bill language updates statutes to include Riverside amongst the California region cited in statute and used in the CNI calculation, consistent with existing statutory language to use additional California geographic areas where statistically valid data are available. When the CNI statute was originally enacted, CPI data for Riverside were not separately available. However, Riverside data became available with the release of the December 2017 CPI data in January 2018 and is available now for odd number months. Second, the proposed language adds statutory language specifying that the Department of Finance may use an estimate in the event specific data required by statute for the calculation of the California Necessities Index are not available under current law. The California regional CPI data for fuel and utilities is one of the five required components specified by statute to be used in the CNI calculation. However, starting in January 2025, regional CPI data for fuel and utilities are no longer available all US Regions. Thus, that component of the CPI calculation is no longer available and the proposed change fills the gap by specifying that an estimate may be used so that the CNI can continue to reflect the cost of fuel and utilities. As a quick background, the CNI measures changes in the cost of basic necessities, including food, clothing, housing, transportation, and fuel and utilities, and the CNI is used to adjust certain program benefits such as for Medi cal, the State Supplementary Payment ssp, the Temporary Assistance for Needy Families and the in Home Supportive Services or ihhs. Finally, I would note that the following three points regarding this proposal. First, the proposal does not change the structure or intent of the CNI as we retain the same categories, weights and focus on essential goods. Second, this does not materially affect benefit levels since the estimate that Finance will use is intended to closely track historical C and I trends. Third, the technical changes provides clarity in processes when data are unavailable due to potential changes or delays in federal data availability. With that, I'm happy to answer any questions you might have about this proposal.

Thank you, Madam Chair. Ryan Woolsey with the LAO In August of 2025, our office released a write up on options to to update the CNI and the administration's proposal is consistent with our recommendations in that report. So we recommend that the legislature adopt the language.

Yes.

Yeah, well, the data would still be the federal bls. However, we're trying to have flexibility in case of future data discontinuation.

Oh, to use an estimate. So right now. So we would.

No, we would use the national data. We would use the national. The national data is still being released and so we would look at historical trends from the regional with the national and use that as our Azure metric.

No, I'm sorry, the.

I misspoke. The national data is still being released. The BLS has just discontinued all regional data. So we would still kind of use the national as an input into our estimate for the regional.

Yes.

All the regions are removed. All of it.

Yes.

Thank you.

Alexis Fernandez Garcia with the Department of Social Services. I'll respond to this issue area on CalFresh and other food programs. So the 2526 revised budget includes 18.1 billion total funds in 2526 for CalFresh and nutrition programs, reflecting a decrease of about 161 million from the Budget act of 2025.

food benefits which are not reflected in the CDSS budget. These decreases are primarily due to changes under HR1.

total funds in 2627 for CalFresh and nutrition programs, reflecting a net decrease of 1 billion total funds. This total also includes $12.7 billion in federal food benefits and again the debt decrease is primarily due to changes under HR1.

to the HR1 changes related to the administrative cost sharing starting October 1, 2026. That is the decrease from 50 to 25% that we discussed earlier with regards to the Committee's questions about the impact on access to emergency food because of

funding baseline of $8 million, CDSX works

operate the emergency food program for the

or produced in California. Cal Food receives an annual baseline appropriation of 8 million which CDSS allocates to

Since 2223, CDSS food bank partners have

including 24 million in baseline funding. As we move through the remainder of 2526, food banks see fewer resources on the horizon, both from state and federal sources, than they have seen over the last several years.

without additional cow food funding and they

They may also have to limit the number of distributions or scale back the

As we previously highlighted, HR1 will impact who is able to access CalFresh and therefore we anticipate that there will be a very likely direct impact on demand

Finally, let me provide an Update on the CalFresh minimum nutrition benefit Pilot Program. The Minimum Nutrition Benefit Pilot provides up

benefits to households who receive less than $60 in CalFresh or CFAP food benefits each month and it's tied to those households that are eligible for the Elderly Simplified Application Project.

The last month for which data is available was February 2026. We provided just about 26,000 households with minimum Nutrition Benefit Pilot supplemental benefits totaling about $900,000. My colleague Ryan, our Chief Data Officer and Deputy Director of Research, Automation and Data, will now provide an update on the CALFRESH Fruit and Veggie Pilot hi

Thank you. Eleo.

Okay, thank you, Deputy Director. You shared 26,000 approximate people in the pilot program, but the goal was we're a little shy. 10,000 shy. The goal was to hit little more than 30,000. What happened to the other?

there are natural caseload dynamics. So we built the estimate based on a point in time. How many ESAP households did we have that met that criteria? Our caseload is dynamic and so this number represents the current real number of households that meet those characteristics. So while we may be serving less each month, what we can do at the end of the pilot is move those dollars forward for another month. It won't be benefits unspent.

Yes, because it's an automatically applied. It's not something that someone has to apply for.

Folks will come in and out of our caseload regularly. So the number may change month to month. And then we'll adjust at the back

Okay, with CFAP in October 2027, what happens on October 2027? Like, what does that look like on that October 1st for the automation, all that, what can we expect?

contingent on an appropriation.

from a state bank account instead of

And so once the appropriation is made,

The outreach will be.

Sorry, when is that reach supposed to start?

And are we going to be mindful in saying you're not? 100%. I just want to make sure that

to be prepared to launch.

people here for public comment saying, I was told and there's no state funding in there?

Okay.

Okay, great. How much are we saving, Deputy Director? With approximately 22,000 people that are reclassified under CFAP and have fallen off of CFAP because they were misclassified there.

Let me pull up my notes on that. And I have it.

I have them. Give me a minute somewhere.

Here we go.

Okay. So we have identified people who were financially eligible for federal CalFresh who were unintentionally placed in CFAP. Our current estimates are that. That is in the range of the 20,000 people that you mentioned. Of course, we continue to do more research and refine our estimates. So going into May revision, we may have an updated number. But the anticipated general fund savings because they are leaving the cfap caseload is 42.8 million. And there are some administrative savings as well of $4 million.

Yes, that is in the governor's budget.

But we, I mean, this is like a really weird situation because they're going to fall off and then they won't even be eligible for CalFresh.

quite unique because of the large influx

Okay. Have they been made aware? How would they be made aware if they haven't?

So our plan, as we kind of refine again the estimates heading into May revision is to implement this change at the household's next recertification, which would be the normal touch point at which their eligibility would be reassessed. And also aligns with the changes on the federal CalFresh benefits side where the HR one now restricts eligibility for lawfully present non citizens. So we are going to align. We're not going to do it ahead of schedule. We're going to align with the time at which we would make the change on the federal CalFresh side.

So the budget was built with information known at that time. And we have since then confirmed implementation dates. And so again, heading into May revision, we'll make refinements related to timeline, related to any change in the anticipated impact

Yes, to the budget year, yes. Director, did you want to add anything to that?

Right. What are we doing in place to make sure we try not to reclassify future people?

to continue serving them on cfap. We'd have to change state statute, but

I think I took your question to be slightly differently about how we're training and doing quality assurance to make sure that we don't have these kinds of errors.

Okay, good. Now you'll get both answered. And to that, I would say, first of all, I do think that it was a sort of somewhat unique situation in terms of the way that those humanitarian parolees came in. And so it's hard, it's these days to say that anything might ever not be precedented in terms of what happens again. But I think what we can do is provide as clear guidance as we possibly can and training and technical assistance to the counties as immigration law changes to make sure that we're as clear as we can be about who is and is not eligible for CalFresh and who is and is not eligible for CFAP. And so that's a quality assurance and case management process that we do. We do management evaluations with the counties where we review cases. As we've identified this, we've had extensive conversations with the counties and with saws. So it's something that we are hoping to continue improving.

And to the other Question if you could add on to that was like, what else can we do with this automation? What else would it be eligible for us to do with that? And I think you started with that.

So you could consider something like expanding the California Food Assistance Program according to age or some other eligibility criteria. What the automation will provide us is within calsas, a program that is separate and apart from the federal CalFresh program and the ability to link that separate

If you wanted to use that program for other reasons or other to serve other people, you. You have to change the eligibility criteria that are tied to that program in the system. And so we have been asked, you know, how long would it take to do something like that? And it really depends on the complexity of the eligibility criteria that are set and what the expectations are for, you know, how people would be served by that program. And so a timeline is not available without that type of detail.

Okay. And do we know how on average, how long someone stays is on cpap? Because I know that's limited. Right.

Can you please help educate me on this? So legal permanent residents under five years are ineligible for CalFresh, so they go to CFAP.

But if now they're six years, they're not eligible for CalFresh. So that means they're time limited on CFAP. Yes. No.

end either to CFAP or CalFresh when

still on the program.

But now you get federal funding for it.

Yeah, that's current practice.

I guess that's what I meant. Like how long are we paying for until we're able to switch them over on average? Do they come at the first year or are they coming like oh, at least.

I'd be interested to know how on

So for some, be served in CFAP

Okay. On the Cal Food funding historically, won't say historically for a couple of years now. We've gone past the $8 million baseline in years that I don't think have been as chaotic as this year. If we've done it in the past and this year is even more drastic, this budget year is even more drastic, especially with HR1, Department of Finance. I'd like to turn to you on this one. The rationale if we did it before and it wasn't as crazy.

There's a huge interest from the body of the Senate to ensure that we match as closely as possible the previous investments in this. Especially with what's happening HR1, I recognize more investment in CalFresh is better the return. Right. You know, I forgot the number of for every dollar what you get. But it's more on CalFresh than it is food banks. But still, since we can't really do the CalFresh a little bit more. There's a huge interest for me and my colleagues in insurance. We get a little bit more on that. I think that's all I have in this space. We'll hold that item open. Oh, just one quick question on the CalFresh benefit pilot. Can you send me the geographic breakdown of where all these 26,000 people are across California. I don't know if you have it on you.

Okay. And I forgot I have another question. Maybe Department of Finance or someone can help me on this one. There's an increased general fund cost because of HR1, but then there's a general fund savings because of the decrease in CalFresh caseload. Is that being put together so the increase is subtracted by that or the increase is already with the subtraction.

a result of HR1.

Do we add those numbers or do they live separately?

I guess I just want to know if I look at the increase, am I looking at the final number total?

Thank you so much. We'll hold the item open. Move on to issue number five.

Okay.

Department of finance issue 2 with DHCS. Very similar. I recognize it's a ton. It's so much every day a new eo. I get it, it's valid. But some are requesting limited positions, some are requesting permanent positions. I'm wondering the rationale versus if I see the light at the end of the tunnel and this administration is not going to be here forever. And I think HR1 will be reversed maybe earlier than the federal administration still in power. Why respond to these things in a permanent manner versus a limited manner? Yeah.

Not just HR1. But these are in response to EOs that will go away once the federal administration is gone. More than likely. Right. So I'm just again wondering why are they permanent?

sort of seeing sort of a significant ongoing workload. I know the department can sort of speak more broadly to sort of hiring challenges in some cases associated with limited term sort of resources. It's what we think is appropriate. But hear you that we evaluate the budget on an ongoing basis and so if in a future date we were to see that maybe those resources were no longer appropriate, we would reconsider at that point in time.

Limited term positions under Calrshire guidance can only be hired for two years. We anticipate that this will be at least a three year run. So being able to hire for really specialized positions in legal, fiscal and it for a two year period and then rehire again for the third year doesn't really support the need of what we anticipate at least in the next three years. And then to the Department of Finance's position, this is a reaction to a larger federal change in landscape. Not just the executive orders, but also understanding there's been significant changes in guidance from oversight that will probably take significant time to unpack and possibly hopefully reverse. So hear you on the concern and the hope that it will Revert quickly. But I think from a, a need from the expertise of the staff, the restrictions for the two year limited term from CALHR standards and what we're hoping to accomplish overall for the federal response, we propose a permanent.

could follow up HCS colleagues and just speak specifically to sort of how they assessed that appropriateness.

So issue six is referred to as CalFresh enhanced monitoring. So this proposal is specific to CalFresh responsibilities. Increased federal compliance monitoring, newly required corrective action plans and the implementation of the ABOD time limit, which requires dedicated ABOD time limit management evaluations to maintain federal compliance,

administer the CalFresh program and puts us at risk of a loss for federal funding, financial penalties and increased federal oversight.

in 26, 27 and 4.7 million ongoing

Four specifically application processing timeliness, recertification processing timeliness, and the payment error rate, which the federal government does require. The development of corrective action plans across all counties and which is subject to fiscal, fiscal penalties. Implementing those formal corrective action plans at the state and local levels to assess improvement over time and monitor progress and to implement those ABOD time limit management evaluations statewide, including 1,000 case reviews that are required federally to meet their compliance requirements.

similarly on this one. No concerns at this point, but would note that this is in support of a really high fiscal priority for the state which is getting the payment error rate addressed. And hearkening back to the panel that we just had, you know, providing technical assistance to counties to help them avoid errors in eligibility determination. This would support that.

Ryan Gillette, Chief Date Officer, Department of Social Services. The Department has two budget proposals related to what we are calling the Enterprise Data Pipeline, or edp. EDP is a modern data infrastructure aimed at managing data, automating reporting, protecting privacy, improving analytic capabilities, enabling data driven policy decisions through a cloud platform data warehouse. This allows us to run analyses more quickly and accurately by providing the computational power needed to process the large amount of administrative data that the Department manages. The EDP has reduced the runtime of analyses by 97% in some instances. For example, we were able to take a data run that used to take over 20 hours to complete. We can now run under five minutes to date. The insights from the EDP have contributed to the positive outcomes for the people we serve, including a $13 million reduction in EBT theft by enabling real time data driven decision making and ongoing Estimated roughly $1 million in avoided theft. That's coming from work that is made possible through the EDP. We first implemented the EDP in 2023 with an initial $3 million investment. This funding is set to expire on June 30th of 2026. So the first EDP budget item is a premise. This is ongoing funding for the Enterprise data pipeline. It includes 3 million. The Budget act of 2021 included $3 million for this effort. Since that is expiring, we are looking for an expansion. So the 2627 governor's budget includes an additional 850,000 in total funds, about 400,000 in general funds for fiscal year 2627 and ongoing to maintain the pipeline infrastructure, expand data capacity, and align with the CDSS caseload. The second EDP budget item is a BCP. This proposal requests 2.7 million in total funds, 1.9 in general funds, and ongoing equivalent funding for up to 11 positions to support the Department's ability to continue utilizing the edp. These positions will provide CDSS organizational planning, management and technical support, and design capabilities to ensure proper maintenance of the edp. The EDP ultimately supports our ability to meet state federal reporting requirements, avoid fiscal penalties, and produce timely and policy relevant data analysis.

concerns on this item.

They are all somewhat related. So issue five is staff across the department. It's not specific to an individual program. It includes legal support, legislative Support, a variety. Issue 6 is CalFresh specific. It has to do with the monitoring requirements unique to that program and issue seven is a tool that we use to execute on all of these priorities. I'll give you an example. The EDP is helping us run more real time analysis on our timeliness data, which is tied to the technical assistance

Going to hold the item open. Go on to issue 8.

to improve student access to social services

of connecting students to services.

staff who help students with basic needs

this proposal or under AB 79.

In terms of the Department's efforts to improve CalFresh access amongst eligible college students,

The data speaks to the cumulative impact of our collective work to make CalFresh more accessible. Since student specific data has been tracked

by over 25% from 158,000 students to over 200,000 students monthly.

A few things have contributed to this, of course.

with their applications last year federal fiscal year.

to streamline processes and reduce administrative burden.

administratively streamline the verification process related to some exemptions from the student work rule. Our goal is to improve efficiency and

Nothing to add on this item.

Ryan Woolsey with the Lao.

You are right. We've done quite a bit. And we will continue to find ways to increase access for students. As things stand. Under this legislation, we are required to convene these work groups, submit the reports and do the work. And right now that is not absorbable for us. If we were to, you know, trilibrial language priorities. That is a discussion that we could have with the committee.

This next item is related to implementation of AB777, also chaptered in 2025, which aims to maximize the amount of federal food assistance provided to residents impacted by a disaster. Specifically, the bill clarifies the process and timelines by which electrical corporations and local

For the purpose of issuing automatic mass replacement of calfresh benefits. Automatic mass replacements can be requested from the federal government when food purchased with benefits can be assumed to have been lost because of the disaster. Imagine an extended power outage. The timely sharing of that data allows

Under AB77, CDSS will submit a report to the legislature by the end of 2020 that includes additional ways for California to maximize available food assistance and any additional oversight actions needed to meet the

CDSS requests equivalent position funding for one research data specialist position ongoing to analyze and report aggregate data for disaster supplemental

So this position allows us to. To operationalize the requirements of the bill to submit more requests for automatic mass replacements.

I'd love to learn a little bit more about, like how we calculate what needs additional positions and what doesn't. Like, how do we know? So this is one position I would understand. No, I understand. Yeah, like if it's like a. We need five positions more. I was like, okay, it seems like a really heavy workload. One position. Explain if you can, Deputy Director, how it's not absorbable.

Okay, gonna hold the item open, thank you. And move on to issue number 10.

month of temporary food benefits to disaster victims who were not eligible for regular

Under current law, all impacted areas included

individual assistance are required to request to operate decalfresh regardless of the unique impacts of the disaster. This TBL proposes to allow CDSs and impacted counties to assess the impact that

We would consider the extent and severity

if disaster calfresh is the appropriate response.

people would be eligible for the benefit.

will create any delay in the development

We would conduct the assessment in parallel to our already existing process to determine each county's readiness to operate decalfresh. This typically occurs within a week or

assessment because information can be collected before the disaster declaration.

who track population density in impacted areas power outage.

fresh in some counties under the individual

cost associated with the tbl.

Thank you. So it's not that it's less requests, you're not going to be requesting less assistance. It's more strategic.

declaration with individual assistance, every county that

feds require us to meet.

Okay. Does that save us money? I mean, if we're not.

It frees up that position to go do the other work.

So we have struggled with the amount of operational demand to set up and Prepare for disaster CalFresh for very limited applications. Now those individuals are. It's still important to serve them. And the regular CalFresh program would be available to them. It just wouldn't be this one month of benefits under disaster CalFresh.

Okay.

We just talked about clients not knowing the difference. Right.

implement the CFAP expansion, the state is

an over issuance collection will need to

CFAP resulting in a lower monthly benefit

only CalFresh or only CFAP.

That would limit the reduction on par with a Calfresh only or a CFAP only household.

No concerns on this item.

All right. This item is related to CalWORKS, the state's version of the Temporary Assistance for Needy Families Program, a key safety net program for families with children. CalWORKS provides cash assistance and job services

It is funded through a combination of the federal TANF block grant, about 3.7 billion annually, the State General Fund and county funds. The fiscal year 2526 revised budget includes 6.4 billion total funds which reflects a net decrease of 16.8 million from the Budget act of 2025.

The 2026-27 Governor's Budget proposes 6.5 billion total funds which reflects a net increase of 71.5 million.

due to a higher projected caseload and and full funding restoration for CalWORKS home

families are receiving CalWORKs. The projected caseload in 2627 is just over 360,000, so slightly higher, which is a 1% lower than the projection in the Budget Act.

increase, but at a slightly slower rate.

Based on the projection of available revenues in the Child Poverty and Family Supplemental Support sub account. The maximum grant level remains at $1,175

three residing in a high cost county

Before I pass it over to Director troia, let me answer your questions about the status of federal funding for the TANF Grant, the Child Care and Development Fund and the Social Services Block Grant.