Assembly Budget Subcommittee No. 1 on Health

Because not having enough physicians is one of the things, one of the most important things that obstructs access to health care in California. But today we are turning to the millions of Californians who stand to lose health coverage as a direct result of federal actions. And so our hearing will focus on three interconnected issues.

First and foremost, how HR1 and related federal actions are going to likely impact the Covered California marketplace. The next topic will be how new federal policies like work requirements are going to change our Medi Cal program program by adding what I would call federal red tape.

And finally, how HR1 and federal actions have targeted immigrant communities ability to access health care in California. So I'll take a moment and walk through in a little bit more detail what we're going to examine today on Covered California.

The combination of HR1 provisions, the new federal marketplace regulations, the expiration of enhanced premium subsidies that Congress declined to renew, is expected to result in nearly 500,000 Californians dropping out of coverage over the next several years. And we're already seeing the consequences in the most recent enrollment numbers.

And I know that Covered California is going to speak to this in more detail, but we do know that new enrollment has fallen about 32% since last year. We saw that Latino new enrollment fell even further at 39%. And we know that African American and black communities saw a decline in enrollment of 34%.

In addition, middle income Californians are canceling coverage at double the normal rate. So we're seeing effects both from an income level and from a demographic level, a background level. And as we anticipated would happen, California took action last year. I was very proud of this subcommittee's work to try to preserve affordability in the marketplace.

And so we worked in partnership and the full budget team and particularly staff worked with Covered California to create a new state level subsidy program using special state funds to protect the lowest income Californians who are enrolled in the Covered California Exchange.

And while this was critical, we put 190 million in special funds into that new subsidy program, it doesn't come close to replacing the 8.3 billion in enhanced federal premium assistance that California was receiving.

So the question before us today, and one that I hope we're going to begin to answer, and I'll say to our panelists that we need to begin to answer, is what can California do? What else can we do? What else should we do on medi cal?

The HR1 enacts sweeping changes to our Medicaid program that have never happened in California's history. And I think all of us in this room understand, well, that actually in the history of our nation, we've never seen rollbacks of health care like this.

We've always worked to expand health care and to try to get more people access as opposed to rolling back the gains that we've made.

So the first is the work and community engagement requirement, which is a federal mandate requiring specific adults in the Medi Cal program to prove that they meet 80 hours per month of employment, volunteering or education in order to keep their health care.

And I would say, like many things might sound good on paper, but really just amounts to a lot of red tape that people who would like to have health care are going to have to try to wade through. And we expect really detrimental things to happen from that.

The second is requirement that the same enrollees renew their eligibility every six months. Months instead of once a year, which will double the administrative burden that's being placed on patients and counties that manage their cases. So again, more federal red tape.

So when we look at these two pieces together, we're really looking at about 1.8 million Californians losing Medi Cal coverage, which is detrimental in a state that covers about 15 million with Medi California. And studies have shown from other states that work requirements really don't do anything. They don't meaningfully increase employment.

They don't meaningfully increase access to health care. In fact, they just create new barriers and complicated administrative steps and more paperwork and more challenges with getting health care. So California has never implemented requirements like these.

And I do believe that we owe it to our constituents to understand how this is going to unfold, what California is going to do about it, how we are planning into it so that the least number of people lose care due to this kind of red tape.

Then our last topic will examine how HR1 and related federal actions affect immigrant communities, access to care. Under HR1 and various other federal actions. We know that the Federal Government is eliminating health coverage for entire categories of people who are lawfully present in this country.

So for those that may have not dug into the details on this, this includes refugees and asylees who were granted protection by the US Government after fleeing persecution. These folks will no longer be eligible.

Victims of sex and labor trafficking who are granted visas because they cooperated with federal law enforcement to prosecute those crimes will no longer be eligible. Afghan parolees who assisted with US Military operations will no longer be eligible.

And in all of those instances, the Federal Government did grant these individuals their immigration status, their lawful immigration status, but is now taking away health care coverage. So today's hearing is not just about policy mechanics of the changes, but really to understand the human consequences that will unfold because of what the Federal Government is doing under HR1.

So we will do a couple of housekeeping items. As you heard, we're going to start as a Subcommitee, or if I didn't say that before, we're obviously starting as a Subcommitee. And we will have public comment in person at the end of each issue and would like for your comments.

It looks like a number of people are here today, so ask that your comments be restrained to one minute to allow everyone to make their public comment and to please direct your comments to the specific issue at hand.

If you're unable to be here in person today, you can submit written public comment via asmbudgetsm.ca.gov and at the end we will open to public comment for items that are not on the agenda. That will be at the end of the hearing.

So we are going to jump into issue one, which is the impacts of HR1 and federal actions on the Covered California Marketplace. And we'll start with our first issue covering that topic. For this panel, I'd like to welcome to the witness table representatives from Covered California, the Department of Finance, as well as the lao.

We have a lot of big teams today, so we moved hearing rooms and tried to get more chairs and appreciate everyone who is able to be with us.

So we're going to start with Covered California to provide an overview of the HR1 Marketplace provisions, the new CMS federal regulations, the impact of the expiration of the enhanced federal premium subsidies, an Update on the 2026 California Premium Subsidy program, as well as an update on this year's open enrollment period.

And if you can just introduce yourselves before beginning your testimony. After that, we will go to Department of Finance to provide any additional context on the state's HCARF projections and the 26-27 budget posture for the special Fund. And then finally we'll go to LAO to see if there's any additional comments.

So I'll start with you, Covered California, and then let each of you introduce yourselves as you present. Thank you for being here.

Thank you for having us. Chair Good afternoon, Chair and Members. My name is Jessica Altman, the Executive Director of Covered California. I am joined today by Katie Ravel, our Director of Policy, Eligibility and Research, who will assist with any questions that you may have following my remarks.

I want to thank you for the opportunity to be here today and for hosting this important public hearing.

As you note, there is a lot to cover when it comes to covered California and federal policy changes from HR1 and regulations that we've seen as a marketplace under the Affordable Care Act, Covered California is subject to federal law and rules.

HR1 and new federal marketplace rules will have sweeping impacts and along with the expiration of the enhanced premium tax credits are expected to lead to a substantial decline in marketplace enrollment and a rise in the number of insured by imposing policies that will limit enrollment opportunities, add new administrative burden on consumers, limit eligibility, and increase consumer costs.

To give just a few examples, Covered California will see its 2027 open enrollment period. Our next open enrollment period shortened from 12 weeks to nine weeks, giving people less time to enroll. Gender affirming care is now no longer considered an essential health benefit by the Federal Government.

HR1 removes tax credit repayment caps, potentially subjecting consumers to much higher tax bills when they file their taxes in future years, consumers will face stricter enrollment verifications and lose automatic renewal, potentially losing coverage simply due to new and unnecessary red tape.

We are also analyzing a new federal proposed rule, the notice of benefit and payment parameters that would implement elements of HR1 and federal rules by codifying restrictive eligibility policies and reducing meaningful state marketplace flexibility. One thing HR1 did not do was extend enhanced premium tax credits.

The enhanced premium tax Credits accounted for $2.5 billion of premium assistance for Californians each year and they have now expired as of December 31, and consumers are experiencing higher premium costs in 2026 as a result, we estimated the 2026 monthly consumer premium costs would on average nearly double an increase of 97% in monthly payments.

Middle income consumers no longer eligible for any tax credits, particularly those who are older or live in high cost areas, are seeing more extreme increases and in total, as many as 400,000 Californians were estimated to potentially drop marketplace coverage over time due to this loss of affordability.

To give an update of where we are as of today, open enrollment ended on January 31 and after doing everything possible to support consumers through these changes, we are closely tracking 2026 enrollment trends. Over 1.9 million Californians did sign up for coverage, this open enrollment representing a third 3% decline in enrollment from the same time last year.

But there is more to this complicated story. New enrollment is down 32% and at its lowest level in years, about 110,000 fewer new signups compared to last year.

During this open enrollment, new enrollment among middle income Californians above 400% of the federal poverty level, about $62,000 a year for an individual declined 59% after their tax credits were entirely taken away.

More consumers opted for lower level bronze coverage which has a lower monthly premium but then comes with higher deductibles and out of pocket costs and associated outcomes from those affordability burdens. And it is still too early really to see the full effects on enrollment for our renewing consumers, but we are seeing some trends emerge.

Over 70% of renewing enrollees who switched their plan tier moved to bronze coverage compared to just 28% last year in 2025, a similar trend to new consumers opting for bronze plans. Termination rates among middle income consumers are nearly double that from last year, 22% compared to 11%.

And we really are continuing to track enrollment outcomes for our renewing population very closely and that will continue in the coming weeks and months.

Given planned billing cycles and grace periods that allow people to keep coverage when they have not paid their bills for a limited period of time, it will take time to see a fuller picture on overall impact.

We may also see higher cancellation rates throughout the year as consumers who want to stay covered find that in the end they cannot afford their monthly payments. Unfortunately, we have also seen disproportionate declines in new enrollment among Latino and black African American Californians when enhanced premium tax credits were available.

We saw the largest increases among these same communities. And so we anticipated that we might see disproportionate enrollment impact with the expiration of enhanced premium tax credits. And unfortunately that is coming to bear.

We work to reach and connect with communities of color through Cultural First Marketing, Outreach, Communications, our in person assistance through navigators and partnering with community based organizations and communicated much earlier than usual through notices and communications to inform them about changes in 2026 and give them time to plan.

We will continue to invest and connect with and support these communities and to promote coverage and access to care and try and counteract these disparate outcomes. While these numbers are stark, we are seeing less severe coverage declines than the rest of the country. For example, we are down 3% in California.

Healthcare.gov states are down 8% in Enrollment as of today and we want to highlight the meaningful impact of California's continued leadership to keep coverage affordable. This Legislature appropriated $190 million from the health Care Affordability Reserve Fund, which I will call HCARF to Covered California to provide financial help in 2026.

Currently, these state funds provide premium assistance for our lowest income enrollees with incomes up to 165% of the federal poverty level or about $26,000 annually. While the $190 billion cannot backfill the $2.5 billion loss in in enhanced premium tax credits, the program is making a meaningful difference. Nearly 390,000 enrollees are benefiting from these funds.

Renewal rates among lower income consumers receiving state funded premium support are consistent with last year, unlike the significantly higher cancellation rates at higher income levels. In closing, I also want to make sure to cover the remaining questions outlined in the Committee agenda when it comes to potential modeling for HCARF funds.

We have not yet modeled other uses of HCARF resources. However, we could do that quite quickly if needed. We can also share our previous modeling scenarios and discuss the other income based scenarios presented in the agenda with you and your staff.

With regard to models that may support immigration statuses, and I know this is one we'll talk a lot more on the third panel.

We do want to note that under HR1, approximately 120,000 lawfully present immigrants currently enrolled in covered California will no longer be eligible for federal tax credits beginning in 2027, and their tax credits are valued at approximately $600 million each year.

Regarding HR1 and Federal Rule implementation, we are very actively planning for eligibility changes for LAHO present immigrants, as well as the shorter open enrollment period, both of which take effect for 2027 coverage. These changes will each require thoughtful and comprehensive communication and engagement strategies with consumers and the public at large, and our planning is very well underway.

Other federal enrollment and verification policies are not taking effect until 2028, but we are already developing implementation strategies but will do whatever can be done to mitigate consumer impact and enrollment barriers. With that, thank you again for having me and we're happy to take any questions briefly.

I'll just end on so we have established quorum and then we're hearing that the audio is not getting picked up. So if you can move the MIC closer to you when you when you speak into the mic, I'll defer to who's next.

I know we have covered California and then we have Department of Finance and then we have LAO. Yeah.

Angel Alonso Coronel, Department of Finance no further questions. Happy to answer any questions you have

and anything from the LAO.

No additional comments.

Okay, I'll turn it to my colleagues just to see if anybody had any opening statements that they wanted to make. I have a number of questions that I'll jump into unless I see someone telling me they wanted to make an opening statement.

All right, well, number one, I want to say thank you for the work that you've done and I know this is a particularly challenging hearing because the effects of HR1 are so incredibly detrimental. I heard you say that you have yet to do the modeling as that we said on how to use HCARF resources. Is that correct?

You have past modeling yet to do future modeling?

That's correct. And part of that is so in the past we've modeled different versions. Obviously we've now seen the governor's budget that puts forth $190 million.

And we can produce really any modeling through technical assistance that would be helpful looking at either mitigating further the loss of the enhanced premium tax credits or mitigating the future loss of lawful present impact. But would look for guidance from this body in terms of what would be most helpful in producing that modeling.

And I'll let Katie add anything she'd like.

No, I'd say that's exactly right. And if the appropriation stays at 190 million, our process would be to rerun our numbers and make sure we can still afford the program we have today into the next year at that same funding level. But again, with any enhancements, we can model what that would do.

Got it. And for the Administration, it looks like we're projecting closer to 370,369.4 to be more exact, of unobligated HCARF balance for 26-27. Does the Administration intend to propose any kind of updated numbers for the state subsidy program for 2027? And if so, what could that look like?

Given the information that we've heard about the drastic increase in disenrollment and decrease in new enrollments, what could it look like to help more people into the marketplace?

So the governor's budget maintains 190 million from the health Care Affordability Reserve Fund to provide subsidies to low income covered California enrollees up into 165% of the federal poverty level. The governor's budget does not propose any new significant proposals and Will is working on continuation of previous investments at this time.

Is there a perspective on how to help the middle class folks given that there's 369 million projected?

Yeah. Joseph Donaldson Department of Finance so as my colleague noted, you know, obviously the governor's budget is maintaining the previous investment of 190 million for the state subsidy program.

Right now, I think just how we've talked as a whole about building the 2026 budget of when we're having discussions of trying to mitigating those impacts of HR1, we really need to kind of take it holistically.

You know, the state is not in a position to backfill all lost federal funding while also acknowledging that we do have out year structural deficits. So as of now, the governor's budget maintains that current investment. But to the extent that that is a priority Legislature, we can continue to have those conversations.

Chair zero please, please.

I was just going to add, since you asked specifically about the middle income group, it might be helpful to know that last year we did model what it would cost to replace the premium subsidy that California established prior to the enhanced premium tax credits that did provide some assistance to that middle income group at 400% of federal poverty and above.

And that modeling came out at $454 million to replace the program design that was previously implemented. Obviously we could update that if helpful

and you could do less than 400 but less than 400% above. But more than 150% above. I'm assuming somewhere in there that we could find a way to help people.

We can either model a result and give you a dollar amount or if you give us a dollar amount, we can give you options. So we can do any of the above. Great, great.

Thank you. And then I know you mentioned a couple of strategies for addressing various specific communities. Can you elaborate a little bit knowing that the drop off was highest among Latino consumers then black and African American consumers also very high if we solely look at income and not background.

So we are, I would just start by saying we are incredibly proud, proud of the investments that we've made in recent years and the fact that empowered by the increased affordability under the enhanced premium tax credits, we were able to make disproportionate gains among our Latino and African American communities that have historically lagged when it comes to rates of coverage and take up.

And so we are, I think, similar to this Committee, devastated to see as the Federal Government pulls back on affordability, that those same disproportionate impacts are being reversed. We really leaned in, in thinking about how are we communicating changes.

I will also tell you when we brought different options for the use of the $190 million to our board last year, we shared impact across race and ethnicity, which is not the same when you look across income levels. And so that was a factor that was considered in determining how to spend the funds this year.

We leaned into culture first messaging. We expanded our translations into more languages even than we've used in the past. Significant and really tried to show up in community with trusted community partners to deliver the truth of messaging. I also want to highlight right.

What we'll talk about on panel three, which is the overlay of the fear and concern among our immigrant communities, which while it's hard to tease out in the data, we also believe is having a dampening impact on coverage and enrollment, particularly among our Latino communities.

Thank you for that. I'll turn to my colleagues and see if there's any questions from any of our community Member or, excuse me, Committee Members for this first panel that's really focused on covered California and Assemblymember Bonta. Thank you, Chair.

I wanted to just pick up on this last thread around the modeling. So you said you can give you a number to back up into or give you a population to back up into for the modeling.

Right. So you could say we have $250 million and we can say here are four things you could do with that. Or you can say we want to backfill all of the loss of lawful present tax credits for this subset of lawfully present immigrants and we can also produce that number.

So really I think the question is are we starting with a dollar amount or are we starting with a policy goal and we can model any of the above.

Okay. I think it would be helpful then for us to be able to get clear on what that policy goal might be because I think another potential thing to consider is the profile of the consumer that is going to be the most impacted. Our lower income consumers. Higher income consumers.

And certainly can you share what will happen for legally present immigrants under HR1 right now in terms of their coverage in 2027?

As we'll cover in detail on panel, three large groups of lawfully present immigrants, 120,000 of our current enrollees will lose all of their federal affordability assistance in 2027.

And what will that mean in terms of their ability to have coverage?

In many cases they will not be able to afford it.

And certainly if they can't afford it, would they be eligible for Medi Cal?

Generally speaking, they are not on Medi Cal because their income is too high for them to be eligible for Medi Cal. So no.

So basically they will just not have health care?

That is the assumption, yes.

Yeah. I think that one of the considerations that we have to make is just the potentially disparate impact on different types of consumers based on the overall overarching realities of HR one that we are dealing with.

And just a recognition that there will be whole swaths of community Members, 120,000 is your estimated number who will not be able to have any kind of an option of any kind of healthcare.

And I'll just reshare because I think it was before you arrived that we value the tax credits that group of people will lose at $600 million annually. To give you one number to start with.

Thank you, I appreciate that. And then I just have another question around how ultimately the authority around making prioritization, prioritization decisions are made. So who has the authority to design the HCARF dollars right now?

So historic. Well, there have been different versions of this. The last time with the $190 million, this body approved an amount of funding and then allowed the covered California board to review options and to make a determination about how those funds were best spent.

I would say my understanding of that is that was largely because so much was uncertain. We didn't know if the enhanced tax credits would be extended or not. And that gave us the flexibility to have. We had two very different programs at the ready, depending on what the Federal Government did and didn't do.

But certainly the Legislature could define how those funds would be used through the budget process and the legislative process.

Because absent a policy directive from the Legislature, then the covered California board is essentially left to its discretion to make

that decision with public comment and a clear outlining of options as well as trade offs across different measures.

Yes, I think to the Chair or through the Chair, I certainly would hope that the chair of the budget Subcommitee and this Legislature, given the incredible dynamic nature of these funds and how HR1 will get involved, would have a very defined role in the allocation of those HCARF Dollars. Just for your consideration.

Thank you, Assemblymember Bonta. And we'll move to Assemblymember Stefani.

Thank you, Chair. So many egregious new rules and provisions to review. And. And on page four of the materials there was one that I noted about allowing issuers to require payment of past due premiums. And the key word that I saw was permits.

And it doesn't require, in my reading of that the issuers to actually require payment of past due premiums. And I'm wondering whether or not a health plan then could choose to waive or not enforce this requirement. Do you think that would be allowable?

If it's okay, I'd like to take that one back and come back to you once I've consulted with legal counsel to make sure I give you a correct answer.

Okay. Because I am wondering if HR1 does not mandate that insurers actually require that people pay these past due premiums before they enroll. If we have any leverage over the health plans to make sure that they don't enforce this new egregious rule.

I'll just say, generally speaking, to the extent the Federal Government gives Covered California flexibility to make decisions that minimize red tape, minimize consumers being shut out, and make this process of getting health care simply easier, we always take advantage of those flexibilities.

Thank you.

Any other questions? Okay. If not, we will move to public comments. So specifically for our first panel on Covered California, if you have public comment, you're welcome to give that now. And as a gentle reminder, even if not that many people come to the mic, we'll still ask you to keep your comments to one minute.

Good afternoon, Michelle Johnston with the National Multiple Sclerosis Society. I'm here on behalf of almost 68,000 Californians living with multiple sclerosis. Delays or gaps in necessary diagnostic tests or treatment can worsen the prognosis for an individual living with Ms. And they lead to serious, long term and irreversible consequences.

Without adequate medical and prescription drug coverage, managing this disease becomes financially impossible for many. The average annual cost of living with Ms. Is over $88,000 a year. The median annual cost of brand disease modifying treatments was over $113,000 as of July last year.

As you work around Covered California, we encourage you to maximize the funding for the California Premium subsidy program in 2027 and beyond to help individuals continue to maintain their coverage. Thank you.

Christine Smith With Health Access California just wanted to thank for the inclusion of $190 million that was secured in last year's budget to continue on to this year's budget for the subsidies and then also for Covered California stuff's just incredible work on modeling every possible scenario. So just really do appreciate them. Thank you.

Seeing no other public comment, we're going to move to our second issue which is impacts of HR1 on Medi-Cal enrollment and the State's implementation framework.

We're going to invite to the witness table a number of people, representatives from the Department of Healthcare Services, the Sacramento Native American Health center, the Department of Finance and the Legislative Analyst Office.

We're going to begin with DHCS who will provide an overview of the work and community engagement requirements as well as six month renewal provisions, DHCS's estimates of coverage losses and the Department's implementation plan. And then we'll move on to a few other people. I think, okay, because space is tight if LAO wouldn't mind trading with Dr. Adeniyi.

I apologize if I'm saying your name wrong. From Chief Clinical Officer at the Sacramento Native American Health Center.

When it's your turn, Dr. Adeniyi is going to offer his perspective on how these changes are affecting patients and safety net providers on the ground and then we will invite LAO back up in case LAO has any additional comments.

So we're going to start with DHCS and please go ahead and introduce yourself and start when you're ready and then we will move to Dr. Adeniyi. I should have practiced your name before getting up here, but you'll tell us how to say it.

Good afternoon Madam Chair Members. Michelle Baass, Director of the Department of Healthcare Services. HR1, enacted July 4, 2025 mandates new eligibility and enrollment requirements for Medicaid program nationwide.

California must comply with these federal changes which include work and community engagement requirements for certain adults, changes to eligibility criteria for groups of non citizens, 6 months renewal requirements for specific groups and cost sharing provisions. These requirements are significant and make devastating changes to the Medi-Cal program.

Under HR1, the work and community engagement provision which requires adults eligible as part of the new adult agency, adult group or part of the Affordable Care Act optional expansion to demonstrate work or community engagement participation. It's estimated to lead to 233,000 Medi-Cal members losing coverage by June 1, 2027 rising to 1.4 million by June 1, 2028.

The six month eligibility redeterminations, which require the state to conduct eligibility redeterminations every six months rather than annually for the new adult group members will lead to an estimated 289,000 Medi-Cal Members losing coverage by June of 2027, ultimately rising to 400,000 Members as we work to implement the provisions of HR1, we are guided by the following principles to mitigate the harms imposed by these new federal requirements.

We will automate to protect coverage, use state, federal and other data sources to verify eligibility whenever possible. Reduce paperwork and prevent coverage loss due to administrative issues. Communicate with clarity and connection, deliver clear, plain language information in all required languages, ensuring messages are culturally appropriate and easy for members, families and caregivers to understand.

Simplify the renewal experience, streamline our Medi-Cal renewal process with clear forms and simplified six month renewal steps to help members stay enrolled. Educate and train those who serve MediCal Members. Provide our counties, our coverage ambassadors and other community partners with information to help our members navigate coverage.

This includes training, practical tools and ongoing support to assist our members. And then finally provide timely and transparent communication to our members. Sharing updates through multiple channels so members have sufficient time to prepare for and comply with the new requirements.

Our goal is to make this transition as smooth as possible by providing clear information, reducing burdens and working closely with our members, counties, health plans and community partners. At the end of January, we released our HR1 implementation plan which outlines our strategy for implementing these program requirements, pursuant to HR1. No other state has released such a plan.

We are a leader in ensuring that our changes are transparent and clear to so many individuals impacted by these provisions. The implementation plan provides detailed guidance on how DHCS will implement these changes while working to minimize disruption.

To familiarize our partners with this plan, we've hosted a few All Comer webinars with thousands of people joining to learn about these plans and our implementation. Additionally, we are committed to educating those who serve our Medi-Cal members.

This includes our county partners through comprehensive training, monthly work groups and additional implementation provisions as we will speak to in a minute. Also, we have multiple areas where we are working on our outreach to our members. We have a budget change proposal requesting 17.5 million for an outreach and engagement planning.

We have 4 million for clinic navigators proposed in the Governor's budget. Also additional actions related to our enhanced care managers, Street Medicine and our community health workers. I will now turn it over to Tyler Sadwith, our Chief Deputy Director and State Medicaid Director to answer some of the questions in the agenda.

Good afternoon Madam Chair and Committee Members. My name is Tyler Sadwith. I'm the State Medicaid Director for California. As Director Baass mentioned one of our guiding principles is to automate data and use data matching to the maximum extent possible to minimize disenrollments in Medi-Cal.

One of the questions in the Agenda materials asks about the 50% disenrollment rate that reflects the assumption used for those individuals subject to work requirements who cannot be automatically determined exempt or compliant. So I'd like to provide a little bit of information about that assumption.

DHCS reviewed literature developed by the Urban Institute related to the several states, Arkansas and New Hampshire, that have implemented work requirements in Medicaid and specifically reviewed the disenrollment rates associated with individuals who were subject to manual reporting and verification. Based on the literature, both states experienced high procedural disenrollment rates for individuals requiring manual verification.

Across the two states, the average disenrollment rate was 77%. However, in California we are proposing several measures to mitigate the impact of disenrollments on individuals that we cannot exempt or deem compliant on an ex parte basis.

We are proposing, as Director Baass mentioned, $4 million for clinic navigators in the governor's budget to guide Medi-Cal members through work requirements and at application and renewal.

We are proposing in the governor's budget $17.5 million for an outreach campaign to develop a technical outreach strategy to raise awareness to develop social media toolkits for various groups such as Tribal Partners, Coverage Ambassadors, providers, Medi Cal managed care plans, and more.

This outreach strategy includes earned media, paid media, and other dissemination in all 19 medical threshold languages. In addition, we have a strong network of coverage ambassadors who are people that help people in their community find, better understand and keep their health care coverage.

The Department provides toolkits and information such as flyers, informational documents and social media to equip Coverage Ambassadors to talk to their community in a way they understand. We have over 7,000 individuals across the state signed up to be coverage ambassadors and this was a successful initiative launched during the public health emergency unwinding process.

We have enhanced care management providers who are positioned to help Medi-Cal Members navigate the eligibility process, gather needed documentation, and help maintain continuity of coverage. Another key benefit is community health workers who serve as trusted messengers in the community and can help people navigate the Medi-Cal eligibility and work requirements process including manual verification.

Another benefit that is relevant is street medicine, which is covered under Medi-Cal and which includes care coordinators who can help members complete Medi-Cal applications and assist with gathering documentations.

Neither Arkansas nor New Hampshire implemented such an array of services and supports to help individuals who cannot be determined on an ex parte basis and and based on these mitigation measures, we reduced the disenrollment rate assumed for those individuals subject to manual reporting from 77% to 50%.

There's another question in the agenda materials regarding the estimated share of projected coverage losses that will be procedural, meaning the member is eligible but fails to complete the red tape or the paperwork versus substantive, meaning the member does not genuinely meet the work requirements. At this time, the Department does not have such an estimate, as this is a new policy for Medi-Cal. Neither is there robust information from the other states that have implemented this or in the literature.

We do know at a very high level from self reported survey data that 62% of non disabled Medi-Cal members age 19 to 64, report working either full time or part time, and of the same population we know that 14% report being a caretaker, 9% report having an illness or a disability, and 6 report going to school.

This is an analysis performed by the UC Berkeley Labor Center based on American Community survey data from 2023. So this analysis suggests most individuals in this population would appear to either be exempt from the work requirements or satisfy the work requirements. However, there are limitations. First, this is self reported data.

Further, based on the limited information, it is not possible to determine that all of these individuals would meet the official exemption criteria or the official work requirements criteria established in either HR1 or in federal guidance, which is still forthcoming and which we are still waiting for.

However, even though we cannot project this estimate at this time, the Department understands the importance of capturing this information once the policy is implemented.

We are planning for this in our implementation design, we plan to display refined data related to members not retained, subject to work requirements and being disenrolled on our monthly eligibility dashboard, and we plan to distinguish members in several different ways to help illuminate this point.

We plan to be able to track and distinguish members who could not be determined on an ex parte basis and were requested to submit manually submit information, Members who did not respond at all, Members who responded with a renewal packet but did not provide enough information regarding work requirements to enable a determination either way, and Members who responded and included information but substantively did not meet the requirements.

At this time I will turn it over to Yingjia to round out the questions from the Subcommitee.

Good afternoon, Chair and Committee Members, Yingjia Huang, the Deputy Director for Healthcare Benefits and Eligibility at Department of Healthcare Services. Wanting to share a little bit on the questions regarding outreach and the system and the Department's kind of current collaboration with our county partners and lastly sharing a bit more on the budget trailer Bill and the current status of the federal guidance.

So you asked a little bit in terms of what the our current assessment of our county administrative readiness is and I think in General sharing that the approach that the Department is taking is a very structured support. We are utilizing a lot of the lessons that we learned during the Medi-Cal continuous coverage unwinding.

So in the DHCS HR1 Implementation Plan that was released in January of 26, we discuss in a very fine detail matter the various work groups that we are currently that we have started with the counties since the summer of 2025.

And these meetings take place on a biweekly basis where we provide technical assistance to our county's regular county requested trainings. And it's important to understand that there's currently very little federal guidance on this policy. But it's important because we've learned learn through the unwinding. There's a lot of a change in the county workforce.

So I think through this time we've been kind of hosting quite a few of county refreshers on various kind of salient areas as it relates to medical eligibility determinations and providing technical assistance of very specific eligibility scenarios which we know serving a population of this size, there's just so many different types of scenarios that can present to self at the county.

And also as the Federal Government is releasing guidance, we are committed to providing timely federal interpretations of the federal guidance in the form of an all county letter to our counties. And we know this is super important as we are planning on implementing this on January 1st of 2027.

Through these work groups, the counties have an ability to provide feedback to the department in terms of the various deliverables. They also have an opportunity to provide comments on policy letters kind of adding to the richness of the policy letters that we provide for them.

So it's actually on the ground level that they can actually implement and actually have conversations with members or applicants that present themselves at the county lobbies to also facilitate county and system readiness.

The all county letter that I referenced we the Department place published a preliminary guidance in December of 2025 and that is well before any federal guidance because we know concrete policy guidance is of the most critical importance to actually starting the work given the rigor of the various federal provisions within HR1 and understanding the administrative pressures on the counties.

DHCS is maximizing the use of data sources as Tyler was sharing through the form of ex parte which is really a no touch process where we're able to gather many of the data sources in the background so that we're not burdening the applicant or the Medi-Cal member at kind of their normal scheduled renewal.

And one thing of note is with HR1, it really pushes a lot of state Medicaid agencies to look at very creative ways to pull in information that's not normally known to the eligibility systems. So we'll talk a little bit more about that in a little bit.

But wanting to really kind of push the piece on the automation and maximizing the possibilities of looking at different sources that could allow for an actual exemption to work in community engagement or allow us to check for for work and community engagement compliance quickly without asking for additional information.

And at this time, we are still working with the County Welfare Directors association and learning a lot more about what the impacts are with the counties in terms of their workload. I think just generally to say we recognize there is a change in kind of the workflows for counties with additional kind of provisions in policy.

We are deeply committed to working with the counties closely and in collaboration on next steps. You also asked about our outreach strategy for HR1. In our implementation plan, we detailed a two phased approach to how we are thinking about outreach in general. And the two phase approach sounds quite familiar.

The Department did use this during the continuous coverage unwinding where we were able to to retain lots of individuals in coverage. Because at that time we were afraid with the passing of the pandemic, we will lose, there will be a significant loss in coverage. So we took a lot of those lessons learned from that approach.

And in the implementation plan we spelled out phase one, where it is preparation and awareness. And that process is currently underway. And we anticipate that process to be ongoing until about September. But more than likely it will still be kind of in the shadows as we start phase two.

Phase two shifts the tone of phase one, in terms of phase two, kind of pushing for a call to action. And we're anticipating that phase to begin sometime in September, October time frame.

And the difference between the two is with phase one, it's really preparing the individuals that will be impacted by these significant changes under the federal HR1 provisions.

So already in February, we have started outreach to individuals that are starting the renewal process in January of 2027, February of 2027, because these individuals will be kind of the first groups that will be up for a potential work requirements assessment.

So we're doing it in cohorts because we want to minimize the confusion given that, you know, there's quite a Few of quite some concerns in the community about just texting in general, but we know text messaging is the most popular modality.

We've learned that through the unwinding outreach campaign and continuing to leverage that. In the summer of this year to kind of continue with the phase one approach of prep and awareness, we will be sending a general outreach notice translated in all 19 medical threshold languages to all impacted individuals.

The new adult group, which is approximately 4.6 million individuals and with FAQs, et cetera. And the tone of the text message that will complement this will change as we're gearing up for phase two, where it's really starting to say, hey, start paying attention to the things that may be coming to you in the mail.

The federal rule, there's changes to the Medi-Cal program and you need to pay attention. And we also include links to a page on the DHCS website that's called "what members need to know". And I think in General, really trying to make as consumer friendly as possible in an effort to mitigate the potential loss of coverage.

In the governor's proposed budget, we requested $17.5 million for outreach. And through the requested outreach dollars, it will be complementing kind of the phase one and two approach that I've just described.

And we are looking to work with the vendor through the requested outreach dollars and really using some of the tactics that we've learned through the unwinding, specifically things like demographic targeting, looking at census data, household data that lines with the income threshold for Medi-Cal eligibility.

So we have an ability to target certain areas, tailor messages to certain areas in language targeting.

So, for example, if there is a population that resides in Los Angeles county that may be largely Spanish, you know, we will have an ability to use kind of the data through the census, pairing that up with Medi-Cal information and prioritizing certain languages over the others so our individuals could see it in ethnic grocery stores, bus stops, et cetera.

So those are very successful strategies that we use and looking at geographic targeting as well.

So looking at placing digital ads in counties by looking at various zip codes where more Medi-Cal members reside. And through the vendor, through the outreach dollars we're requesting, we are looking to create social media toolkits and newsletters in Medi-Cal threshold languages, video placements where again, we were able to put together 30 second, 60 second videos in all Medi-Cal Threshold languages.

It's downloadable on the DHCS website and has targeted audiences where, whether it be for medical providers, our tribal partners, managed care plans, and it's free for them to disseminate into the community. And partnering with ethnic media, we found this to be very helpful where we went on various, had interviews with various ethnic media.

We partnered with Univision, Telemundo when we were doing the continuous coverage unwinding, where we had digital placements on the radio, on TV, on Hulu, on YouTube and recorded lots of different versions of the kind of the messaging that was critical for this effort so folks could hear it within their drive to work, for example.

And we know that the mixture of digital platforms is probably the most important and we need to target those kind of platforms where our members actually use and in terms of the metrics that DHCS will look to measure.

So as part of the kind of the standard vendor kind of capturing of how many impressions, which is like how many ads we've placed across the state, we also look at clicks to certain websites because we will be creating like a devoted website for this process and how many times the website is embedded in various areas like video completions.

And more importantly, what we learned quite a bit is how many times somebody actually clicks on the text message. So we have an ability to measure that and how effective that is. So they actually go to the page and go through the process. And of course, most importantly, like Tyler was sharing, we will be having.

I will just ask you, maybe two more minutes max.

I'm almost done. Thank you so much. And most importantly, in terms of a metric for us to put on the Medi-Cal eligibility dashboard in terms of measuring disenrollments and we will have an ability to look at what that looks like.

So lastly, in closing, wanting to share the trailer Bill Language is already posted on the Department of Finance's website. We did receive updated guidance from CMS just on Friday on six month redetermination. So the Department is reviewing that call closely and we will look to capture as much as possible and pivot as needed.

But currently at this time, the budget trailer Bill that's posted on the website captures all the eligibility provisions that go into effect prior to 2028. Thank you.

Thank you so much. And I'll turn to the esteemed doctor, Chief Clinical Officer at the Sacramento Native American American Health center, and I'll let you introduce yourself. Thank you.

Thank you, thank you, Chair and Members of the Committee, thank you for the opportunity to speak today. I'm Dr. Hakeem Adeniyi, Jr.

Most people call me Dr. Hakeem and I serve as the Chief Clinical Officer at Sacramento Native American Health center, which is a FQHC, a Federal Qualified Health Center that serves Native American populations as well as other underserved and priority communities in Sacramento County. I also am a family and community medicine physician who sees patients regularly.

So given that, that gives me a direct view of these policies and how these policy decisions will have an impact on our patients, providers in a Safety Net Health Care. So with that said, community health centers are the backbone of primary care access in California and currently across the state, health centers operate around 2,300 clinics serving around 6 million people per year and including about one third of all Medi-Cal lives in California.

Like many health centers in the state, Sacramento Native American Health center provides integrated medical, dental, behavioral health and vision services and our organization was founded to address the healthcare disparities that many have faced, but including our American Indian and Alaskan Native populations. But we also serve everyone, regardless of income, insurance status and background.

That approach really reflects our core values as being a Native American health center where we're caring for the entire community. Today I'd like to highlight three areas of concern related to the current policy environment. First, the destabilization of the healthcare safety net.

Community health centers serve about one third of all all Californians on Medi-Cal, yet we make up more than half of all primary care visits for that same population.

One reason we're able to do that is because of the Medi-Cal Prospective Payment system, or PPS, which ensures safety net clinics are reimbursed based on a true cost of delivering comprehensive care. This supports continued efforts to provide medical, behavioral health, dental and enabling services to those in need.

Recent state budget actions would eliminate PPS reimbursement for state only medical populations, primarily patients with unsatisfactory immigration status beginning in July 2026. Looking at that from the statewide perspective, this represents roughly a 1 billion annual reduction in funding for community health centers.

Here In Assembly District 6, health centers would lose more than 7.5 million each year in revenue tied to providing care for these patients. At the same time, federal policy changes are expected to push millions of people out of medical in the coming years.

Combined, these changes significantly weaken the financial stability of very of the very clinics that serve as a foundation of the safety net, leading to losses of at least 1.6 billion in the coming fiscal year and growing exponentially thereafter. And the reality is simple. There's no parallel system ready to absorb these patients.

When primary care access becomes unstable, we see predictable system impacts. More emergency department visits, more uncompensated hospital care, and greater strain on the county public health system. The costs do not disappear they just simply move elsewhere and usually at a much higher cost. Second is the operational impact on community health centers.

Health centers are already navigating significant pressures which include rising operational costs, workforce shortages across the health care sector, and growing demand for services. If reimbursement declines while more patients lose coverage, clinics will be asked to do more with even less resources.

In practical terms, that could mean slowing the hiring process of physicians, nurses, and behavioral health providers, delaying the expansion of services, or reducing clinic hours and programs. These are not decisions any health center wants to make, but without stable reimbursement, they may become unavoidable. Third is the impact on patient care.

While immigrant communities will experience the most immediate consequences, policies that effectively defund clinics for serving these patients ultimately affect all patients in the system. When access primary care becomes unstable, patient delays occur. And when care is delayed, physicians see the consequences. And I see this regularly inside my class and inside my clinics.

I think about Mr. Gonzalez, a patient with diabetes who was finally able to get his medications and receive regular monitoring. And without care, he instead presents with a foot infection that leads to an amputation.

I think about Mrs. Tran, who has high blood pressure and high cholesterol, whose conditions are well controlled on appropriate medications, who now instead present after having a heart attack or stroke. And I think about Elder Tippmann, a well respected community member living with heart failure, who now presents after a lengthy hospitalization with a pacemaker.

These aren't rare cases, they aren't extreme. They are predictable consequences. When patients lose access to consistent primary care, it results in higher costs and much worse health outcomes. In closing, the healthcare safety net is already carrying a significant share of California's health care burden.

If reimbursement declines while workforce shortages and coverage losses increase, the system will struggle to meet patient demand. Strategic investment in primary care is one of the most effective ways to protect both patient access and long term health care affordability.

California has already is already recognized this through the creation of the Office of Health Care Affordability, which has set a goal of increasing primary care investment from 7% to 15% of total health care spending over the next decade. Policies that weaken the financial stability of primary care clinics move us in the opposite direction.

As you consider the state budget, I respectively urge the Legislature to protect the prospective payment system or PPS that supports community health centers, invest in primary care workforce and ensure reimbursement reflects the true cost of delivering care.

Strengthening primary care is not only the right thing to do for our patients, it's also the most effective way to maintain a stable health care system. With that said, thank you very much for your time and for your continued commitment to protecting California's healthcare safety net.

Thank you so much. Dr. Hakeem, is there anything from DOF for LAO?

Sabrina Adams, Department of Finance. No additional comments.

Okay. LAO did you have presentation? Okay. Please. Thank you so much. We may ask you back up, Dr. Hakeem, if there's questions from Members.

Thank you, Madam Chair and Members of the Committee. Min Li with the LAO, we would like to offer a few comments on the disenrollment and workload associated with the community engagement requirements and six month renewals. Our office recently released Medi Cal reports that discuss these issues in greater detail.

We developed an independent forecast of the disenrollment using administrative and survey data as well as existing literature. Our estimate of total coverage loss is slightly higher than the administration's. We estimate that about 2.1 million fewer people would be enrolled in Medi Cal by June 2028, compared to the administration's estimate of about 1.8 million.

That said, we think the administration's estimate is reasonable given the considerable uncertainty that lies ahead. Key uncertainties will include how burdensome people find the new reporting and documentation requirements, the extent to which administrative data can allow eligible beneficiaries to stay enrolled without additional paperwork, and the readiness of county eligibility systems.

We think county readiness is important for at least two reasons. First, it will help ensure smooth implementation of the community engagement requirements and six month renewals, including mitigation of people losing coverage for administrative reasons. But secondly, it may also affect the risk of fiscal penalties in the future.

Starting in late 2029, HR1 tightened certain rules related to reducing payment errors in Medicaid, so the performance of county eligibility systems will be important to comply with these rules. For these reasons, we recommend that the Legislature review the May revision proposal to assess whether the budget appropriately reflects the county administrative workload under HR1.

As we noted in a recent report, the methodology used in recent years to budget county Administration of Medi Cal has lacked a clear link to workload changes. Accordingly, the Legislature may wish to monitor the administration's efforts to address the limitations of this methodology. Thank you.

Thank you. Maybe I'll turn it over to member questions. First, I have a couple, but if anybody else has any. Assemblymember, it looks like everybody, so maybe we'll go down the line. I'll start with Assemblymember Patterson and come around the horseshoe here.

Great. Thank you. Well, I think, you know, the first comment that I would like to make is, and I don't think anybody disagrees with this, but I think it's, you know, our responsibility to make sure those who are eligible and need the coverage, you know, get the coverage.

I heard about the efforts that are being made already, you know, and this isn't going to be the first time you hear this from me. Sorry to my colleagues, but, you know, it's really hard for me to, you know, we have so many priorities in this state.

You know, getting people the services that we need to get, you know, cutting CASA programs, you know, helping people get Medi California, you know, yeah, we're spending $19 million on an RFP to help clean up California's image on the national level. And I think that's reprehensible.

But you know, you mentioned differences in people who fail to complete paperwork versus actual qualification issues, and I think you have some estimates around that. Is there going to be what kind of efforts? I think we talked a little bit about that.

But can you help me understand a little bit more what kind of efforts in terms of, you know, failing to complete the paperwork, you know, helping those people? What is the Department looking at?

We'll say we have a few efforts underway in that space. So the clinic navigators, the budget includes 4 million. And these are individuals who, at community health centers can help individuals with the paperwork or understanding what the requirements will be.

And so really kind of using that base and that place where people go to get their services to assist in that space, we also have the coverage ambassadors, which is about 7,000 individuals who really will be armed with toolkits and information to help their community understand what these rules are and you know, when to take action and the timeframes for those things.

I'll turn it over. I think there's a few areas that we're also thinking about in terms of other places where individuals touch our Members.

Okay. Several- Several other ways that are designed to principally support individuals who can't be matched from the administrative data that we have include the community health workers.

So these are trusted messengers in the community, sometimes known as promotoras or community health representatives, who are able to really help these individuals understand the information that the Department needs to help them keep their Medi Cal and then help them with developing that paperwork and reporting it or submitting it.

And that is a covered Medi Cal service that can assist with that. Another Medi Cal benefit where people with a trusted relationship with the lead care manager under enhanced care management will also have that one to one relationship with someone who can help them navigate the step by step process with reporting that information.

And again, for individuals experiencing homelessness, street medicine providers also are there positions in the community where those Members are who were not able to match with administrative data and they can help them that way.

In addition to those covered Medi Cal providers and services, in addition to the 7,000 Volunteer Coverage Ambassadors that the Director boss mentioned, we do have the proposal for a $17.5 million outreach strategy, which again will leverage paid media, earned media and community, linguistically and culturally centered communication to reach people where they are in their community, to help them understand the information, to help them keep their Medi Cal.

You know, it might be helpful, I think, for us is, you know, when I was helping my parents and in laws and stuff, try to get, you know, Medicare and Social Security, and I consider myself, you know, maybe average intelligence or so, but it was like, hard for me to figure out, you know, and I'm assuming this could be similar.

But what would be interesting is some kind of presentation or something for us, you know, to understand what a person might have to go through in that process to obtain coverage under the new HR1. And then if you see policy changes, not so much in HR1, but especially in the guidance, I think there's an opportunity.

I mean, I'm sure there'll be plenty of times where there are opinions on that, on what that guidance looks like.

But in terms of changes, policy changes, I mean, you know, some of us can get involved in that, you know, I think in a bipartisan basis, you know, especially when it comes to guidance, because I think there's a- there's a little bit more flexibility there. And I think, you know, one of the-

one other thing I kind of wanted to ask about is- is, you know, because, look, I think at the end of the day, you know, we're all concerned about people losing coverage. I don't know. I think maybe there are populations that we've heard political debates on that should or shouldn't have coverage in time of limited funds.

But I think, you know, if persons eligible or interested in- in getting them help. And I think we need to be- that needs to be demonstrated. But my understanding is, and I know that this isn't exactly.

This letter wasn't written to you, but, you know, it was written to the secretary in terms of three chairs of congressional committees wrote a letter a few days ago about, you know, waste, fraud and abuse programs that California might be, you know, ask California to answer some questions.

And I know this is recent, but are you aware of whether there will be responses to those questions?

Yes, we said we did receive this letter, I believe it was last week, and we will be responding to the Congressional Committee. And I would also note the Federal Government CMS sent a letter to the state as well in a similar vein on program integrity. And we sent a robust response to CMS. It's about 60 pages.

And if you do not have it, we would be happy to share that response with you outlining all of the different ways we kind of think about program integrity in the Medicaid space to really kind of demonstrate how we think it is a critical component of our responsibility as the administrators of the Medi Cal program.

Okay. I consider a legislator threshold language to be audiobooks to go over the 60 pages. But you know, in the letter it is pretty interesting because there are, I think, you know, they- they do name examples of fraud. I mean, look, I think any.

There are plenty of fraud in federal programs, in state programs that have gone on forever. I mean, this is not like, you know, the question is- is what can we do to address those issues and multi million dollar issues.

And I think what the Federal Government is pointing out is that some of the programs, which I'm not saying, you know, shouldn't have, like one example in home support services, they're not saying we shouldn't have them. They're saying those are more prone to potential fraud and abuse, hospice being another one.

And I have personally seen examples of hospice fraud that- and I think there's going to be a lot more coming to light on that. And it is- it's very scary. Millions and millions and millions and millions of dollars that make the $19 million the Governor spent out on RFP look like a drop in the bucket.

So I'm really interested in the responses about, you know, the actions that we're taking. I mean, because we're not talking small sums of money. We're talking about, you know, and I'm obviously, I know the state isn't interested in having waste, fraud or abuse, you know, in any of the programs. But

if we're going to be limiting, have a more limited pot of money, I have an interest in making sure that obviously that what the, what the Federal Government's asking for to ensure that this isn't happening. I'm definitely interested in the answers to those questions about our programs.

And you know, and especially if there are some changes that we need to make or if there maybe there's some things that the Legislature needs to do to ensure that maybe there's no regulatory approval for that, maybe you need legislative changes or whatnot.

Because I think, you know, things like hospice and in home support services are very important, obviously. But if they're more prone to fraudulent, I mean, what can we do about that? You know, so I'll definitely be interested in the answers. Do you have any idea when a response would come on this letter?

Again, I know it wasn't written to you, so. But you happen to be in charge of the medical program.

We were working to meet the kind of the requested timeline and working with Commi- Committee staff as well.

Yeah.

The federal Committee staff to go--

Okay.

through the process. But we're in the meantime happy to share our other response that has a lot of- there's a lot of overlap in the information.

Okay, great. Yeah, if I can get a copy of that, that'd be terrific. So thank you very much.

And I have an app that you can use to listen to that report.

If you need a recommendation. If you need a recommendation.

Oh yeah. If you just upload it.

Perfect. Thank you.

Thank you. Assemblymember. Assemblymember Bonta.

Thank you for answering that question and for providing the information about the 60 page report that you all have already put together to address the congressional letter, which in my estimation kind of goes right up there with creating a war and trying to not be responsive to the Epstein files in terms of this challenge or this indictment around waste, fraud and abuse.

I know that the state of California has done a significant amount of work and has multiple agencies, both at the city, county and state level to ensure that there is not the level of fraud that congressional letter indicates there might be and certainly was on display in terms of the GOP's actions as it related to Minnesota.

Wasn't my question. I'm going to not fall down the rabbit hole that was just offered around that. I did want to get to some of the questions around your disenrollment estimates and assumptions. So if I were to kind of crosswalk what you offered and what is in the analysis today. So 70.

There was 77% disenrollment rate in Arkansas and New Hampshire you indicated.

And your assumptions or kind of the governor's budget proposal indicates that there's going to be about a 50% disenrollment rate is the lower, relatively lower disenrollment rate from 77 for those other states to 50% for us based on the assumptions that you are going to be able to effectively employ the strategies of the outreach, the coverage ambassadors, the Community Health workers and the lead care managers.

Yes, Assemblymember, with one ninor clarification. The 77% disenrollment rate from the two other states and our 50% disenrollment rate does not apply to the entire population subject to work requirements. Rather, it's individuals who are subject to work requirements that we cannot adjudicate using automated data matching.

That's the 62% of individuals.

Yes. Yes. About the 60%. Yes. Remain- Who- Who have to manually report information. So that's the, the population that the other states, 77% of those folks lost Medicaid. And in California, because we are taking comprehensive steps through the navigators, through the media, et cetera. As you referenced, we aim to bring that DES enrollment rate down to 50%.

Right.

And the- And the strategies are primarily as you've indicated.

I wanted to just touch upon the strategy related to community health workers in particular, given the fact that we've had some difficulty in making sure that community health workers are able to fully bill and recognize and have managed care plans and Medi Cal providers fully avail themselves of the ability to have those community health worker service benefits reimbursed.

Are you all- Is DHCS planning on issuing any guidance to be able to ensure that folks like Dr. Hakeem here and other FQHC and community healthcare providers actually have more of a likelihood of being able to re- recoup those investments?

Yes, we're looking at developing resources, technical assistance, guidance to help our medi cal managed care plans, provider associations, and in collaboration with the State Department of Health Care access and information to really lift up the value of community health workers and ensure they're able to deliver the services, including navigating Medi Cal eligibility and be able to receive reimbursement for those services.

So, yes, we do plan to issue guidance.

Great. And then are you anticipating adding any additional resources or provision of funds to the community health workers or the lead care managers or the coverage ambassadors, which I think you said 7,000 volunteer, which I'm very curious about the word volunteer there.

Or are you relying on the same number of individuals who are doing that work right now to produce the- the fact that only 50% of people will be disenrolled who are eligible?

We are proposing $4 million in the budget for a new net increase of resources for clinic navigators to support this work. But at this time, Governor's budget does not propose any new resources for enhanced care management or community health workers specifically for HR1.

Okay, so you're with just the addition of some clinic navigators in the tune of $4 million and the $17.5 million for an outreach campaign, you're making assumptions on the input side of relatively the same amount of people to produce the lowered number of disenrollment.

I would just note, community health worker is a benefit in the Medi Cal program. And so based on utilization, that- that spend or those dollars will go up.

And so we don't have a kind of a direct assumption in terms of how much more community health worker spending would result in, you know, these activities, but it is as a benefit that is just how it will get financed on the natural.

Okay, Dr. Hakeem, can you speak to the just on the from a practitioner's standpoint, the extent to which you have been able to or your understanding of how FQHCs have been able to avail themselves of fully realizing that reimbursement for that benefit.

So it depends on the FQHC. Where I've worked previously, we had promotores, we had cultural brokers that were able to help our patients with limited health literacy assume and receive care that they otherwise wouldn't have.

Generally speaking, during the- during our clinic visits, half of our time is trying to navigate systems and making sure patients are able to get access to the care that they deserve. So it's a clear and huge benefit to have the community health workers be part of that process.

Otherwise we're unable to do a number of things within our healthcare visits.

Great. My understanding in talking to both community health clinics and FQHC providers is that they have not been able to fully maximize the community health worker role and the health navigator role. So I'm- I'm appreciative that you all are planning to provide additional guidance around that.

I would also note though, that kind of the distinction between FQHCs and community health worker

Understood.

benefits depends on if it's part of our their PPS or not. And so there is a distinction. It's a little bit different.

Yeah, understood. I'd like to move now over to a couple of questions around the federal flexibilities, so. Well, just a very, very random aside. I think as you were describing the outreach program, you said that there was going to be a plan to send two text messages out.

It will be an iterative renewal process. So is it going to be multiple text messages kind of throughout the year? Yeah, but we've already started this in February of this year.

What's- What's the number? What's multiple?

So every.

What is it?

So every month, depending on the individuals that are up for the renewal, say for we started in February for the January 2027 people that have a January due date. So I think- I think it's about 400,000 text messages that we do send out. So it's Member base.

How many text messages will an individual who has the opportunity to re enroll receive?

They will get probably two from the Department as they're getting close to their renewal date. The county also send reminder text messaging to them as well. Going to be multiple. I don't actually have this information in front of you, but happy to follow up.

Yeah, that would be appreciated. Our outreach protocol or kind of best practice indicates that an individual needs to receive a message 33 times before they actually take action on that.

So receiving two text messages to the tune of $17.5 million seems like we are not going to be hitting that mark in terms of the number of people who we would be able to get to stay on if we are able to do that.

I wanted to move a little bit more towards the idea of making sure that we're maximizing retention of coverage for eligible Medi Cal Members. That is kind of a stated position and goal of the Administration. A lot of the kind of this new program around outreach is certainly laudable.

There were, though, some federal flexibilities that DHCs had in place coming out of the public health emergency, and there was a move to end those federal flexibilities. Those were proven to be very effective strategies for keeping people enrolled and online. Has there been any thought to how we ensure that those federal flexibilities actually get reinstated?

So at this point, we're not considering reinstating those federal flexibilities. In many cases, they would require federal review and approval. And we don't think, given the federal climate change, that the Federal Government would approve these flexibilities.

Additionally, just given the context of program integrity and ensuring that we do evaluate individuals to ensure that they continue to meet eligibility requirements, really some of those federal flexibilities looked at income that was a few years old.

And so we want to maintain kind of the ability to ensure that our Medi Cal Members are eligible as part of kind of just maintaining the fiscal stewardship of the program.

So it's the position of the Administration right now that there is no intention to really look at the income and asset verification streamlining that assuredly kept people enrolled previously.

That is correct.

Yeah. I also think that that is a missed opportunity. It was a tried and true strategy to ensure that people could maybe maintain themselves on coverage.

And we are buying into the narrative that set me off on an unfortunate tangent here by my colleague with not even considering whether or not that's something that we might be able to do here in the State of California. So I hope that we might be able to think through that one a little bit more.

And I will just end. My- My last question is really around the provision of. Or just the reality. So even though they don't have coverage, people will still get sick. Our clinics will be largely having to deal with the fact that they are getting care in more urgent moments as well as our hospitals.

That is going to result in significant costs around uncompensated care for both our clinics and our hospitals. From the clinic's perspective, have you all done any modeling or planning around the costs related to uncompensated care that you will now have to carry, given that you have a mandate to provide care regardless of a person's ability to pay?

So we, for our health center, we are estimating at least 10% of our patient population potentially is going to fall into this category of losing coverage. So as a result, we're having to reconsider how we provide services and with them losing coverage, we're having to reconsider how we're providing them medications.

So it is a huge concern for us as we've looked at expanding our clinical care teams to provide wraparound services, we're having to stop that process right now. So as a family physician, I provide care directly to patients and I have a number of people that support my team to provide the care.

But more of that's going to fall on my shoulders, which I'm a bit concerned about for the rest of my colleagues.

And certainly that's going to be even further exacerbated with the changes that we made around PPS.

Yeah, many of the people that go into community health have bleeding hearts and want to do the work. It's been harder and harder to recruit additional staff that want to do this work and this is just going to make it worse.

Primary care has always been the backbone of, but it also has been shown to have a lack of additional people coming into the practice.

So I don't anticipate that making it easier knowing that patients need the care, you know, the evidence based care, but not being able to provide it to them because they don't have the insurance to cover it. I think that's going to be pretty disheartening for a number of people. Thank you.

Thank you, Chair. That was the last of my questions.

Thank you, Assemblymember Bonta. Assemblymember Schiavo.

Thank you.

Just to pick up a little bit on the point that Assemblymember Bonta is making. It's, I feel like, I mean, there's this premise that suddenly we're going to save a bunch of money by kicking people off health care and that is not going to happen.

I mean, we're going to have a ton of people getting uncovered care, you know, uninsured folks who are going to clinics, going to emergency rooms where it's much more expensive and that is going to either cost us because now we have to reimburse the care in those clinics or if they're going to hospital ERs, then those you know, those costs are going to end up going into all of our insurance premiums and insurance premiums are, you know, we're already seeing them go up.

So, you know, I just, it's so frustrating because the whole kind of what feels like is the premise behind HR1 and really going after poor people's health care who are poor and they're going to be poor in six months and they're going to be poor in a year probably.

And as we heard, most of them are already working. I mean it's a systemic failure where people are working and they are poor.

These are working poor people who still need health care and are going to be faced with trying to avoid it until it's really serious and then it's going to be much more expensive to be able to help them. So it's just, well, my dad would use different words but it's very backwards. It's very backwards. And-

And I, you know, so it's like the whole premise is ridiculous and we've seen that this has made life changing difference for people having care when they need it and being able to get the medicine they need when they need it. So we are on the precipice of seeing people die literally from this policy.

And you know, and there already is verification that happens.

And so, you know, the- the- the burden of the paperwork and you know, I just think about in my life if I had to go through the process of verifying to get my insurance, I can barely sign up for stuff that we have to sign up for every year as a single mom.

And I know, you know, I'm not working two jobs like other people are trying to survive. So it's incredibly frustrating. I know there's shared frustration in this room, but you know, I think- I think the navigators are going to be really, really critical. And eligibility workers.

I authored a budget request for $230 million for eligibility workers and a number of colleagues are supporting that as well. I'm- I'm a little concerned that there's more going into the outreach campaign and the budget than is going into navigators.

And you know, I believe in this situation that face to face contact and that individual personal connection is really, really critical. And I, you know, appreciate a digital campaign like the next person, but. And I think that, you know, we have to hit kind of people where they're at in lots of different areas.

But I think that the investment around the navigators needs to be much, much more. And you know, and I'm concerned about the capacity of counties since there's doesn't sound like any. There's nothing in the budget to help bolster county's ability to really be the front line of this in our communities.

That there needs to be, you know, funding for the counties to be able- to be able to do that. Both navigation piece and whatever is kind of the technology and and technical side of the upgrades and the improvements and the processes that you're talking about today.

What do you have an assessment of where counties are kind of at on being able to implement all the changes that you're talking about to streamline and remove. And I appreciate all of the streamlining and you know, and the thought clearly that you all have put into figuring out how to make this.

Remove as many barriers as possible, which I know is the goal. But what's our understanding of how counties are going to be able to implement this on the local level?

And before- Sorry to interrupt. Before you answer, I'm just going to ask both our Committee Members as well as panelists to tighten up our questions and comments. We still have a third panel that I know is going to have a lot of interest in it and so just ask all of us to tighten it up slightly.

So we acknowledge in our budget, our governor's budget documents that we are working with counties to go through this assessment and as we refine our numbers in terms of how many kind of automatic data matches we can do as we continue to get federal guidance, that's what we'll be working with them on to kind of assess readiness, assess what it might take, recognizing that this new workload for them.

So we don't have a number in governor's budget, but did acknowledge that this is important work we need to do together.

So it's something a number will be coming.

We're working towards that.

Okay. Okay, great. And what about what is kind of the estimate on the side of the clinics and FQHCs who are going to be bearing more of the burden around reimbursing costs of care and and how we can be prepared to support the incredible demand that they're going to be experiencing.

We don't have estimates for kind of the health, the overall healthcare industry impact. I think we have acknowledged from the beginning that we're not going to be able to backfill the loss in federal dollars as a result of HR1.

It's tens of billions of dollars that just given the state's fiscal situation we are not going to be able to completely address. And so recognizing that and thinking about mitigation and kind of the how we can think about things differently but just we don't have particular estimates for these types of situations.

I mean, there's already multiple county clinics in LA that have closed just in this last week, I think. So I mean, that's basically what we're facing is that some clinics are just going to be closed. They're not going to be able to keep their doors open because there's not going to be reimbursement for this care.

And you won't be able to afford to do it. Hopefully not you, but, like you.

Yeah. Yeah. So one of the other estimates we looked at in terms of our insurance premiums just for our employees, it went up 20% in the past year. So with that said, we did a great job of not putting that on our employees, but we have to make the difference up somewhere. We can't charge our patients more.

Yeah. It's like you guys are bleeding.

Yeah. On both sides.

Yeah. On both sides of the issue. Yeah. Okay. In- In the interest of time, I will end there. But thank you. Thank you.

Thank you. Assemblymember Schiavo. Assemblymember Stefani, any question? Okay. On this side of the dais, any questions? Yep. Our- Our budget Vice Chair has decided to join today. So welcome.

Thank you. And thank you for letting me join you. And I do have some quick questions that I wanted to touch on on the MCO tax. I know that California has done some additional changes with the MCO tax, but with the big beautiful bill, HR1.

Sorry, Assemblymember, this panel is not covering MCO tax.

That's how we pay for Medi Cal.

Do you have a different question? Do you have a different question?

I'm going to ask how HR1 affects the reimbursements and their federal funding for Medi Cal.

Okay.

How does the change effect.

So it significantly constrains the state's ability to generate revenue via the provider tax. We do know that our current MCO is valid through the end of calendar year 2026.

And for context, the changes with regards to HR1 and the federal final rule in this space really limit our ability to make a differential between our tax on Medi Cal managed care plans and commercial plans.

So in conjunction with Proposition 35 and the new federal requirements, today, the MCO brings The Medi Cal program 7 billion net General Fund to support the Medi Cal program under the new federal requirements and proposition 35 that is reduced to $6 million. So we go from 7 billion to 6 million.

So really significantly limits the ability of the state to really use this vital financing mechanism.

Well, and that's mainly because California decided to increase the MCO tax just to gain match funding. Correct.

We followed all rules and it was federally approved. So we did use the provider tax policy to generate revenue for the medical program.

And HR1 is closing that loophole.

It's changing the rules.

Yes, that is true. And so for me, I understand, you know, I'm an advocate for the state of California and I understand that change is scary, but the big thing is it's truly is how is DHS making changes to how they prioritize funding programs to- to ensure that we are going to have to live within our means.

I understand HR1 is changing the rules. They are closing loopholes. And what priority steps are we taking to make sure that our counties, and I represent a lot of the rural counties can implement and work within this new framework?

Well, that is part of the governor's budget proposals to live within the budget forecast that the Department of Finance is has acknowledged. And you know, as we think about out years, what other future changes might be necessary to maintain meeting the obligation to have a balanced budget?

Do you have any recommendations for the Legislature where we could provide either new resources or state resources personally to our local counties to make sure that they can implement these changes?

I would leave it to the Legislature to identify with other revenue sources. We don't have anything in the governor's budget for counties.

Well, and I'm only asking just so you know, again we can get together and say that we understand that HR1 is making these changes, but we don't control Congress in that sense. But what we can do is look at solutions here at the local level.

And I'm simply just asking from your professional stance, if there were recommendations, maybe suggestions that you would see that could benefit some of our local counties to make sure that we're working for them.

I think it's a matter of what the Legislature prioritizes in terms of the dollars that are available in terms of spending.

Okay, thank you. The other question that I had, shifts have been making changes to eligibility for Medi Cal and Medicaid. The work requirements for that. Can you go into depth for how many able bodied individuals and the changes that we are specifically going to see for the work requirements here?

Because I remember, I believe I heard from the LAO earlier that 2.4 million people will be removed or affected.

So we estimate that as a result of the work and community engagement requirements, 233,000 Medi Cal Members may lose coverage in the budget year and that grows to 1.4 million in 2028.

And is that because they're able- able bodied individuals?

It is a matter of that they were not able to either meet work requirements or demonstrate that they met those requirements. Some of it may be procedural disenrollment because they were not able to complete the paperwork we don't have a distinction.

How do we determine that number then?

We talked a little bit about some of the assumptions.

Assemblymember, before you arrived we had a very in depth conversation on this.

I was listening to it.

Yeah yeah so- so we've covered that do you have another question? We've already covered that question I guess is what I'm trying to say.

But the--

Twice now actually in testimony and then with Member questions that was already answered.

Both in the testimony and Member questions, but do you have another question?

On your the work requirements and the changes?

Yes.

The-

The- Sorry what was that?

Just most of them are working I'll just through the Chair. Do you have another question?

The yes thank you.

The biggest thing that I want to make sure, and these are just will be general comments, is again, we are seeing some of the largest changes and the reformations in HR1 for what it's going to do to our Medi-Cal program here.

What I want to make sure is that I'm prioritizing the citizens of California and understanding that HR1 is here, regardless on how we feel about that. We know that prior to HR1, over 70 hospitals are on the verge of collapse.

We know that most of these hospitals that are on the verge of collapse are because they are in areas that have seen extreme expansions of Medi-Cal that reimburse at less than 70% of the cost. So what I want to make sure that we are prioritizing is getting the services to the people who need it most.

I have multiple hospitals in my district that are on the verge of collapse because they have such high enrollments in Medi-Cal without the reimbursements.

And we here in the state of California have expanded a broken program that the changes in HR1 hopefully give us the fuel to make sure that we're prioritizing the citizens of California over anyone else. Thank you.

Thank you. Assemblymember. Any other questions? I'm sure a lot of people have a lot of things to say, but any other questions from the dais? If not, we're going to go to public comment.

All right, so we will move to public comment for our panel two on the impacts of HR1 and Medi-Cal enrollment and the state's implementation framework.

And as a reminder, since there's a number of people in public comment, if you can keep your comments to under a minute, we are actually going to set a timer just to give you a gentle reminder. And we do want to hear from everybody that took the time to come here.

So it's just a matter of respect for your other colleagues in the audience. So please begin.

Nothing is more important than freedom. California collects the genetic DNA of babies. Millions of babies born after 1983, their blood taken without parental consent. Scamming Medi-Cal and insurance for newborn screening tests. Inflating the actual cost to siphon millions to the biobank. It's budget trickery to fund genetics research. Selling to the military and private labs, just like Texas.

And it's illegal to high heavens. The Governor knows it. Epstein was into genetics too. I will bring California and Trader Trump to heal. Babies can't fight back. I can. I'm the firstborn daughter of a United States Marine and a former trial lawyer.

My name is Professor Julie Elizabeth Mumma in sum, steal our baby's genetic material, tax us for the privilege of it a whopping 100 and

I'm sorry to interrupt you, but ma'am, we're talking about the impacts of HR1 on Medi-Cal Enrollment and the state's implementation framework.

So if you don't have a comment on that, you're welcome to make public comment for items not on the agenda at the end of the hearing. So we're going to move to the next-

My comment was on the fraud and the comment on Epstein and the comment that there could be

So we're going to move to the next to the next Member of the public. I'll remind everyone that you are welcome to come at the end to make public comment for items not on the agenda.

Linda Way with Western Center on Law and Poverty. We appreciate the Department's implementation principles to automate to protect coverage and proactive outreach including text message campaign. We recommend the Department translate the application into threshold languages more quickly, ensure notices and other materials are used to test it.

Good afternoon.

Funding to trusted partners including the Health Consumer alliance to help people get and keep coverage and data dashboard to measure HR1 harm. Finally, we urge the state to reinstate key Medi-Cal renewal strategies or flexibilities to keep their Medi-Cal.

Ensuring that eligible people keep their Medi-Cal and are not cut off due to paperwork reasons. As acknowledged by the Department, manual renewal processing will result in higher disenrollment rates due to administrative burdens for the county as well as Medi-Cal Members. Thank you.

Good afternoon. Yasmine Peled on behalf of Justice in Aging, we thank DHCS for their work thus far in implementing these new requirements. However, we encourage DHCS to continue, to the maximum extent possible, implement policies that mitigate the loss of coverage, including the adoption of all federally allowable exemptions and exceptions.

We also encourage DHCS to track the effects of HR1 and all disenrollments in a data dashboard, as well as appropriately user testing all notices and outreach material.

We also encourage the Legislature to consider additional funding to the Health Consumer Alliance in order to provide legal assistance to individuals struggling with their enrollment or renewals due to the implementation of these policies. Thank you.

Thank you for holding this important hearing. I'm Talar Alexanian, manager of Legislative and Advocacy Affairs for AltaMed Health Services, the nation's largest federally qualified health center. We serve more than 600,000 patients annually across Southern California, many of which rely on Medi-Cal or covered California for access to care.

So we're deeply concerned about the new work verification requirements and six months eligibility renewals. These new requirements risk significant coverage loss among individuals who remain eligible but cannot navigate complex paperwork.

Community health centers are trusted partners in helping patients enroll and stay covered, but doing that work effectively requires meaningful investment in enrollment navigators, multilingual outreach and on the ground assistance to help patients complete these new requirements. We also agree with the FQHC representative from the Sacramento Native American health center.

The 2025 Budget Act eliminates the prospective payment system reimbursement for services provided to Medi-Cal patients with unsatisfactory immigration status and replacing it with much lower fee for service rates.

This change threatens the financial stability of community clinics, resulting in at least a $1.6 billion loss in FY 26/27 alone and could significantly undermine access to primary care and and data privacy for some of our state's most vulnerable populations. We look forward to working with you all in trying to address that and many of the other impacts. Thank you.

Kelly Brooks on behalf of the California Association of Public Hospitals and Health Systems, we represent 17 public health care systems, serving 3.7 million patients annually. We know from Arkansas that a quarter of enrollees lost coverage not because they were ineligible, but because of the paperwork. At California scale, this is a crisis.

People who lose coverage don't stop needing care, they delay it. They skip medications, miss follow up appointments and show up at our emergency room sicker and in crisis. That means longer stays, worse outcomes and higher costs borne by public hospital systems.

We urge the Legislature to minimize procedural disenrollments and invest in the safety net systems that will absorb this impact. Finally, on behalf of the urban counties of California and the Boards of Supervisors of Ventura and Riverside, we similarly urge you to invest in Medi-Cal eligibility in public hospitals. Thank you.

Christine Smith with Health Access California Just wanted to appreciate the comments of many folks on the panel, but also the legislators that spoke. Specifically Assemblymember Chiavo. Without health insurance, people will live sicker and die younger, so there will be huge losses throughout the state.

We do appreciate the Department for all their work in coordinating, but also all their work to get stakeholder input on so many of these areas. We do urge the Legislature to minimize further loss of coverage and also utilize resources to track populations losing health care. Thank you.

Good afternoon. I'm Erin Evans on behalf of the County of Santa Clara. As the state and counties work together to mitigate the impacts of HR1, our community Members are at risk. In Santa Clara county alone, approximately 400,000 Medi-Cal enrollees will be affected by the eligibility and work requirements and we have approximately 80,000 Covered California enrollees.

The county seeks to preserve eligibility for all residents which will require new and increased eligibility work. We operate the second largest public hospital system in the state that offers comprehensive care locally as well as critical trauma, burn and rehabilitation center that serves our region of the state.

Once all changes are implemented, HR1 is estimated to cost the county $1 billion and so therefore we seek partnership with the state.

Even with the passage recent passage of Measure A within our county, we have a daunting $700 million budget gap and so we seek partnership to provide the $500 million referenced by the California Association of Public Hospitals. Excuse me, Preserve Medi-Cal enrollment as proposed by Assemblymember Chiavo and the County Welfare Directors Association.

We support the enrollment systems and technology upgrades that were referenced by the Department. And finally, we urge the Legislature to allocate significant new resources to counties to serve an expected increase in the uninsured populations. Thank you.

Thank you, Michelle Johnston, National Multiple Sclerosis Society I want to thank everyone in front, everyone in the back in this room who are trying to do their best to mitigate the harms of HR1.

Almost a quarter of California and 68,000 people living with multiple sclerosis are on Medi-Cal, and this allows them to have early diagnosis and consistent treatment of their disease. As you work through a series of difficult decisions, we urge you to use every flexibility possible to minimize the harm in California.

We recommend that you broadly define health related exemptions for parents and care partners, maximize the use of self attestation for exemptions and put simple accessible processes in place for those required to demonstrate compliance.

Over half of people living with MS experience cognitive symptoms such as brain fog which places them at greater risk of losing coverage due to administrative paperwork issues. Please adopt the lowest permissible cost sharing amounts and prevent providers from refusing services due to non payment.

Provide sufficient support for administration costs to ensure there are enough trained staff in every county to provide robust, accessible consumer assistance support, protect patient privacy and prioritize transparency of reporting on the outcomes of these changes. Thank you very much.

Good afternoon Chair and Members. Karen Stout here on behalf of the California Nurse-Midwives Association or CNMA. I'm here to express our deep concerns with HR1's impact on community health, particularly in Medi-Cal.

We are deeply concerned that both the federal changes and the Governor's proposed budget aligning with those federal directives will significantly impact California's most vulnerable populations. DHCS estimates that 1.8 million people will lose coverage, further exacerbating our existing health care access and maternity access crisis.

Certified nurse midwives attend 14% of births here in California and often fill the gap in OBGYN deserts. Medi-Cal is essential to both our patients and providers, creating a critical and necessary avenue for Californians, regardless of immigration status, to seek critical care.

As reproductive health and abortion care providers, current Medi-Cal rates are also critical to sustaining the midwifery workforce. Cuts to rates pose an existential threat to our ability to continue to attend hospital births and operating birthing centers, which are often people's only access point for maternal health care, especially as we see labor and delivery and other maternity wards close across the state.

We also want to express our concerns with the PPS cuts that the panelists mentioned earlier, which will also impact pregnant people and providers across the board. We urge you to continue to oppose these dangerous cuts and we appreciate you convening this hearing as well as the series of hearings today. Thank you.

Good afternoon, Madam Chair Members Dylan Elliott here today on behalf of the County of San Joaquin as well as the County Medical Services Program. With with respect to San Joaquin county, the county estimates that due to the ending of federal subsidies and increased eligibility requirements, they'll need roughly $72.3 million ongoing to address the costs associated with providing care to the significantly increased number of medically indigent adults.

This includes the operation of their continuum care in their public county hospital.

With respect to the County Medical Services Program, which for those who don't know, serves 35 rural counties in the state by providing coverage to those who do not qualify for Medi-Cal. Using pre Affordable Care act data, the County Medical Services Program projects that roughly 41,000 low income adults will seek CMSP services, representing roughly a third of those that would otherwise be eligible.

The cost to provide care for those individuals is $311 million per year. If all 100% or 140, excuse me, 124,000 individuals were to seek those services, the cost would be $943 million per year to CMSP.

As such, and trying to use the 1/3 estimate, as I mentioned, consistent with pre ACA data, CMSP is seeking $300 million to be appropriated in fiscal year 27/28. We appreciate your consideration this matter. Thank you.

Good afternoon. Thank you, Chair and Committee Members. My name is Dr. Seciah Aquino, Executive Director of the Latino Coalition for Healthy California. Latinos make up 40% of the population in California and half of all Medi-Cal enrollees are Latino.

These budget discussions directly impact current and future Latino Health. California must prioritize restoring full scope Medi-Cal access to all California taxpayers regardless of immigration status, including eliminating the freeze preventing some Californians from enrolling into Medi-Cal.

Additionally, we ask that the State reject subjecting state funded populations to new burdensome federal eligibility requirements like work requirements and provide health access to humanitarian populations set to lose care on October 1st. Thank you.

Good afternoon, Chair and Members Olga Shilo on behalf of the California Association of Health Plans. On behalf of our 41 member plans and the 28 million Californians that they collectively represent, we appreciate the legislatures and the Committee's efforts to keep health care access at the forefront of these discussions here and we would like to, you know, emphasize that CAHP remains committed to working closely with stakeholders to maintain affordable coverage and care, support strong enrollment and protect the progress California has made in expanding access to affordable healthcare.

Thank you for this conversation.

Good afternoon. Katie Layton on behalf of the Children's Specialty Care Coalition. While the new eligibility requirements under HR1 do not specifically apply to children, we are concerned about the potential coverage losses for youth 19 to 21 in the California Children's Services Program, which provides care to the state's most medically vulnerable children and youth.

Acknowledging that the lack of federal guidance makes decision making difficult, we hope to see those enrolled in CCS as well as those transitioning out of the program at age 21 exempted from work requirements under the medical frailty definition and would also request strong consideration be given to exempting parents of caregivers of CCS children older than 13, given the heavy demands of caring for a medically fragile child.

We thank the Legislature and DHCS for the planning and outreach that is underway and as providers, we also look forward to helping communicate key information to patients and their families. Thank you.

Good afternoon, Madam Chair and Members Jack Anderson with CHEAC representing our local health departments throughout the state. Individuals who lose health coverage as a result of the HR1 policy changes, particularly those who are determined ineligible due to the work requirements, may turn to county indigent care programs, which in many counties are administered by our local health departments.

It is important to note that the state previously redirected 1991 health realignment funds and slowed the rate at which those revenues could grow, leaving counties without resources to serve this population returning to county indigent programs.

CSAC, along with our county organizations, estimate that the cost of providing care to this population could range from $2 billion to $5.5 billion. We respectfully request that the Legislature and the Administration partner with counties to ensure that we can meet this mandated responsibility to provide care to this population. Thank you.

Good afternoon Chair and Members, Beth Malinowski with SEIU California. I really want to second the remarks of my consumer allies around the work we can be doing together and the work DHS is already doing to make sure we're mitigating as much harm as possible and hopefully do everything we can to lower that number of individuals who lose coverage as a Result of HR1.

Want to speak specifically to some of the comments made around county readiness.

Want to appreciate the champion that we have Assemblymember Chiavo and championing our county eligibility workforce in particular as relates to Medi-Cal. As was noted, our counties do need more support so SEIU is standing with CWDA and supporting a $230 million ask that was referenced earlier to support our county eligibility workforce relates to HR1 medical implementation.

Additionally, as you heard from my colleagues at CAPH, we know that folks will continue to get sick, will continue to need care regardless if they have coverage or not.

And for that reason really looking to partner with all of you and making sure for the first time since I think 2005 we see a major investment in our public hospitals, but we see really a down payment of $500 million to support those public hospitals.

And lastly, wanted to really second the comments that my colleague from CHEAC just made recognizing the state of care programs today in California. They need support, they need attention so they can be what we need them to be. Once again, thank you.

Good afternoon. Thank you so much for having this important conversation. My name is Alexis Heaton and I'm with California Coverage and Health Initiatives. I work with over 30 nonprofit community based organizations, First Fives and County organizations.

We ask the Legislature to stand firm against any further cuts that would impact undocumented populations impacted by last year's state budget cuts specifically and do not include the harmful work requirements the state funded populations.

We also urge the Legislature to push back on any harmful Trump cuts and support the 200,000 lawfully present immigrants who are being kicked out of full scope Medi-Cal by the Trump Administration in emergency situations. Thank you so much.

Madam Chair Members Jean Hurst here today on behalf of the University of California. UC Academic Health Centers are a cornerstone of California's healthcare safety net. As designated public hospitals, they provide high quality care regardless of insurance status or ability to pay.

Additionally, they serve as referral centers for hospitals and clinics across the state to ensure access to California's most common complex and life saving care including cancer, burn, transplant and trauma services. In 2024/25 UC cared for patients from 99% of the state zip codes.

UC's academic health centers are the second largest provider of Medi-Cal inpatient services statewide. With 1.8 million Californians projected to lose Medi-Cal coverage. Our academic health centers are bracing for patients with worse health outcomes and increased uncompensated care costs for UC's hospitals and clinics. It is not just Medi-Cal recipients who will be impacted.

The impacts will be felt by all the patients we serve, including patients with commercial coverage. As our already overflowing emergency departments become even fuller and it becomes harder to accept transfer patients, we urge the Legislature to minimize procedural disenrollment and invest in the safety net system. Thank you.

And actually we'll just pause for a second if I could ask the Members on the dais to take their conversation elsewhere since just to respect our members of the general public and as a reminder, you have one minute and we are talking about HR1 and the impacts of HR1 on Medi-Cal enrollment and the state's implementation framework.

If you're here specifically to speak about undocumented individuals or immigration, we do have that panel coming up next. So if you could save those comments for that panel. Thank you.

Thank you, Madam Chair. Members Dennis Cuevas-Romero with the California Primary Care Association, statewide association that represents community health centers and clinics. Really just want to appreciate the conversation about reducing harm and making sure we do everything we can to streamline processes to make sure people in the state remain covered.

Also just want to flag the appreciation of the conversation on health enrollment navigators. That's going to be critically important to make sure folks are remain covered. Do want to just highlight it's our understanding there's no General Fund Dollars currently allocated for health enrollment navigators.

CPCA is working with DHCS to try to secure private foundations so we can get a federal match. So we really appreciate the ongoing conversation and that's going to be very important. Thank you.

Good afternoon Chair Addis, Members. Trent Murphy with the California Association of Alcohol and Drug Program Executives. We represent substance use disorder treatment providers across the state of California. First, I want to acknowledge and thank DHCS for their thoughtful work on the implementation strategy, relying on automation and data matches before requiring member verification.

From a provider perspective, that approach is really critical to reducing that procedural disenrollment we're all really concerned about and easing the burden on counties and providers. Our primary concern we hear from treatment providers is administrative churn.

Many individuals served by substance use disorder treatment programs may qualify for exemptions such as medical frailty or participation in substance use disorder treatment programs but may face challenges navigating reporting and verification requirements. So one area we believe the state could be especially successful is leveraging the ECM providers.

Like we talked about earlier in the Committee, these providers often have the most trusted relationships with patients and can help ensure members understand requirements and maintain coverage. But they need resources to be successful. Thank you.

Good evening Madam Chair and Members of the Committee. Alexis Rodriguez with the County Welfare Directors Association. I wanted to thank Assemblymember Chiavo for highlighting that counties are the frontline administrators of Medi-Cal who will implement HR1 work requirements and the six month redeterminations.

As the agenda laid out, nearly 5 million expansion adults will be forced to comply and that 2.8 million, 60% of that population cannot be automatically verified and will need a county worker to do that work. Without intervention, 1.4 million will disenroll mostly due to paperwork barriers, not ineligibility.

So we are requesting 231 million General Fund in 2026-27 growing in financial years 27 to 28 for counties as an upstream investment to support exemption screening verifications and more of that work. So I wanted to thank Assemblymember Chavo for her leadership and Assembly Member Stefani for highlighting this need.

We appreciate the excellent staff resources that underscore how resources for county eligibility workers is critical to maximize coverage retention and appreciate DHCS's commitment to work with us. This funding is about preventing.

If you could wrap up. That's been a minute. Thank you. Thank you. We'll move to the next person. Thank you.

Evening. Well, E.J. Aguayo, on behalf of California Pace association which advances the program of all inclusive care for the elderly, like to thank DHCS for exempting PACE participants as medically frail from the work requirements. Also want to offer our willingness to help support any of the electronic verification enhancement efforts.

Also, on behalf of Vision y Compromiso, we need to make sure promotores are included in all aspects of education around eligibility and re enrollments. As trusted leaders in the community, we look forward to engaging the Legislature and Governor in partnership to keep Californians covered. Thank you.

Hello Chair and Members. My name is Laura Muther with the Lutheran Office of Public Policy and we are a Member of the End Child Poverty California Coalition. We urge our Legislature to adequately support the county eligibility workforce as they are a lifeline for California households.

County eligibility workers will need every resource available to them to ensure they are the first line of defense against reducing and mitigating the harms of the HR1. Thank you

Thank you, Chair and Members, Natalie Pita, on behalf of the California Academy of Family Physicians, representing over 11,000 family docs, residents and medical students across the state. Oh, sorry. Primary care is the foundation of our health care system. Family physicians provide comprehensive, continuous care that keeps patients healthy and prevents costly ER visits and hospitalizations.

CAFP believes health care is a human right and that health coverage should be universal. We urge the legislator to make decisions that maintain and expand coverage for as many Californians as possible, including improving eligibility and enrollment systems and increasing state investment in our social safety net.

When someone gets sick or injured, they will seek care somewhere in our health care system. Strong primary care ensures that that care happens in the right place. CAFP urges the legislator to prioritize primary care as the cornerstone of California's health system. Thank you, and we look forward to continuing conversations about how California can best respond to HR1.

My name is Randy Hicks and I live in Sacramento county here, and I'm with California for Disability Rights. But I'm not going to speak for California Disability Rights. I'm going to speak for me. Why is Medi-Cal important to me?

Because without Medi-Cal, I couldn't get my physician, I couldn't get my drugs, I couldn't get my services. Without Medi-Cal, drugs are very expensive. I saw how much it costs $45 a bottle if I didn't have Medi-Cal and that coverage, okay, it's important to me because this program helps me be able to be independent.

When you have fibromyalgia, you have everything going wrong with you and you have to take five to six pills and you have to take pills to go to sleep, you have to take pills for the pain, you have to take pills for everything.

And so I figured how much that's going to cost me, that would cost me nearly $300. If you want psychiatry services without Medi-Cal, $160 an hour. This is why this is important. If I lose Medi-Cal and IHSS or my case Medi-Cal, I couldn't get out of the house.

And think about that, how many people do you know can't get out of the house because they don't have their drugs? So I please push back against Trump's harmful cuts and support 200,000 lawfully presented immigrants who are being kicked out of Full scope Medi-Cal because they're going to have the same issues I'm going to have.

And please say no to new cuts or new hurdles. Instead, raise revenues to backfill the cuts to Medicaid and save essential programs. Thank you for listening

Good afternoon, Chair and Members. Omar Altamimi, here with the California Pan-Ethnic Health Network. First on the working community engagement requirements and biannual renewals: these will procedurally penalize their most vulnerable communities, increasing the number of barriers to accessing care.

As a result, individuals who would otherwise qualify for care might be dropped due to procedural issues rather than their eligibility for coverage. We urge the Legislature to to approve every flexibility available to prevent loss of coverage.

CPEN is generally supportive of DHCS's plan to conduct outreach efforts with effective community health navigators and CHWPRs but more needs to be done. Counties must work with CBOs to ensure outreach enrollment is culturally and linguistically responsive and people are not losing coverage due to lack of translated notices or in language help.

We urge DHCS to provide clear guidance for health plans and contracted CHWPRs and providers on how to quickly and effectively Bill for services tied to outreach enrollment. And finally, we urge DHCS not to apply work requirements universally on all Medi-Cal beneficiaries, including immigrants who may not be authorized to work.

Additional HCAI funding for CHWPR services is instrumental here in ensuring eligible communities get the assistance they need to stay covered. Thank you.

Hello, my name is Mar Velez with the Latino Coalition for Healthy California. As was noted, these cuts to Medi-Cal, including HR1 will disproportionately impact Latino and Indigenous communities who make up over half of all Medi-Cal recipients. LCHC appreciates the investments in outreach strategies, including CHW promotoras.

That is why we encourage DHCS to provide utilization data on the CHWPR Medi-Cal benefits so we can further leverage community health workers in the implementation of HR1.

We also request to reject subjecting state funded populations to new burdensome federal eligibility requirements like work requirements and provide health access to humanitarian populations set to lose care on October 1st. Thank you.

Hello Chair and Assembly Members. Thank you for convening today with the California Rural Indian Health Board representing 70 federally recognized tribes and 20 tribal health systems. As California responds to Federal changes under HR1, we encourage the state to ensure that federal protections for American Indian Alaskan Native people remain clearly visible in California's plans moving forward.

Tribal health is grounded in federal and trust responsibility and state policies should continue to reflect the unique relationship. However, these protections do not apply to our tribal health programs. Many of our tribal health programs rely on Medicaid for additional funding.

So with that being said, for tribal health programs, these losses threaten staffing and service delivery and we serve lots of the rural areas across California, so we encourage the state to advocate against these work requirements and anything that would harm service delivery. Thank you.

Good afternoon Madam Chair and Members. Danielle Bradley with the California State Association of Counties representing all 58 counties in California. HR1 represents a fundamental shift of fiscal responsibility from the Federal Government to state and counties for safety net programs.

And you know, increased medical work eligibility is one of the key components driving costs for HR1 implementation in counties. The introduction of work requirements along with six month eligibility redeterminations will make it more challenging for individuals to keep their healthcare coverage. Counties are the ones performing the critical work that is needed to help certify exemptions, support timely processing of more frequent redeterminations and perform essential outreach, follow up and connections to resources.

CSAC is supportive of investments to address this increased county workload which will help maximize the number of individuals who can retain their life saving coverage, secure additional federal funding and prevent increased costs in other parts of our health system. Thank you.

Good afternoon Madam Chair and Members. Michelle Rubalcava with Nielsen Merksamer I'm here on behalf of San Diego County, Contra Costa County, Lake County, Imperial County and Yolo County. I forgot, but I want to align my comments with those colleagues that have come before me from UCC and CSAC.

But to tell you that we do appreciate the conversations that you're having right now to try and find solutions to try to minimize the harm to some of these vulnerable communities.

I would urge you to really consider bringing counties to the table so that we can be your partner when you're vetting potential solutions so that we can help you understand how they will be operationalized at the county level. Thank you.

Hello Assembly Members. Thank you so much for holding this hearing. My name is Jessica Lehman. I'm a Member of Canary Resistance, a statewide disability organizing group and a Member of the LTSS for All Coalition. Long Term Services and supports for all our communities are under attack in so many ways, especially immigrants, trans people and people with disabilities.

Many people with disabilities get Medi-Cal not under the Medi-Cal Aged and Disabled Program, but under Medi-Cal expansion. Many people have disabilities that aren't going to qualify as exemptions for work requirements either because they're not yet diagnosed, they might be mental health disabilities, many other types of disabilities, and there's many caregivers, right?

Actually, the person who came and got me out of bed this morning helped me get ready so that I could be here so that I can do my job and live my life, depends on Medi-Cal and is currently looking for a job. Right?

And so I think about what will happen to all of these people and what will happen to me if I lose the people that are allowing me to live my life. So I really want to ask you to backfill the cuts to Medi-Cal that are from the Federal Government. We know that you're losing money. We know it's going to take more money to do the critical outreach, and you have to come up with new revenues to facilitate.

I hate to interrupt, but if you could wrap up.

Yes. Thank you so much for doing the right thing for Californians in the midst of this really horrendous time. Oops. I'm gonna come around.

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 impediment my whole life. Because of that, people do not always understand me when I talk. That is why I use AAC (Augmentative and Alternative communication). AAC gives me a voice.

It allows me to share my thoughts, my ideas, and my story. Today, I also work as an AAC mentor. I help other people with disabilities learn to use communication devices so they can express themselves too. When someone says something for the very first time, like "I love you", or "I did it", it is life changing.

None of this would be possible without Medicaid and the support I receive through my regional center. These services help with my personal care and provide the equipment I rely on every day, like my wheelchair and my AAC device. These supports are not extras. They are the reason I can live independently, work and give back to my community.

Medicaid is more than a program. It is dignity. It is independence. And for people like me, it is our voice. Please protect Medicaid and protect the lives of people with disabilities. Thank you.

Thank you. Hello, my name is Connie Barker. I am an IHSS provider. I am also a Member of SEIU 2015. Although I do not speak for SEIU 2015, today I will associate myself with the previous remarks of the SEIU representative. I am also Medi-Medi, as is my spouse who is my major client.

And I just want to tell you that recently we did lose our medical because of not getting paperwork done because she was in the hospital.