Assembly Budget Subcommittee No. 7 on Accountability and Oversight

Shouldn't be hard. Good morning, everybody. I want to welcome all of you to the Assembly Budget Subcommitee on Accountability and Oversight. Today we're going to examine how many how new federal rules for Medi Cal and Calfresh may affect key state provisions that support Californians with significant behavioral health needs.

Through CalAim, California has reformed its health care system to better serve high needs populations. CalAim provides coordinated care for justice involved individuals, people with serious mental health conditions and those struggling with substance use disorders.

Similarly, the Care Court initiative seeks to connect individuals among living with schizophrenia who are involved in the court system with treatment and supportive services. Both initiatives are central to the state's broader strategy to prevent and reduce homelessness. However, they rely heavily on federal Medicaid funding to support ongoing services.

Starting on January 1, 2027 HR1 will require adults without dependents receiving health coverage to meet new work requirements. While the law includes exemptions that should apply to many individuals served by CalAim and care, important federal guidance is still pending.

As the implementation date approaches, there is real urgency and concern that individuals with complex behavioral health needs could fall through the cracks. Today's hearing will explore how prepared the state is for these new work rule changes and what steps are being taken to ensure eligible individuals can retain coverage and successfully demonstrate their exemptions.

I'd like to invite the panelists to come forward. We have Ryan Woolsey from the Ledge Analyst Office, Sabrina Adams from the Department of Finance, Natalie Griswold from the Department of Finance, Ying Zhen Wang, Department of Healthcare Services, Alexis Fernandez Garcia, Department of Social Services, and Trent Rohr from the San Francisco Human Services Agency.

Do we have enough seats for everybody? Looks like we have musical chairs and one seat to view. Yeah, somebody. Would one of the Lao folks sit at the end of the dais? We can have you up there. There we go. Let's make sure you have a microphone. There we go. Thank you all for being here.

Let's begin with Mr. Woolsey. Whenever you're ready.

Review this morning of the impacts of HR1 on able bodied adults without dependents and what those populations look like. I'll be speaking from a handout that hopefully you've received. If not, I do have some copies.

Everybody have a copy? Good. Perfect. Thanks.

Starting on page one. By way of background, Medi Cal is California's Medicaid program. It provides health care to more than 14 million low income people. That's about one third of the state and has total spending of nearly $200 billion annually.

CalFresh is the state's version of the Supplemental Nutrition Assistance Program, which provides food assistance to about five and a half million Californians. Most of those are also enrolled in Medi Cal and total spending in that program on the benefits is around 12 or 13 billion dollars a year.

the state level, Medi Cal is administered by the Department of Healthcare Services and CalFresh is overseen by the Department of Social Services, but the programs are administered locally by county health and human services agencies. Turning to page two, HR1 establishes and expands work requirements in both Medi Cal and calfresh.

Currently, Medi Cal has not had a work requirement as a condition of enrollment, but HR1 establishes one set to take effect in January 2027. CalFresh has had a three month time limit tied to a work requirement for certain enrollees, but until recently has had a statewide waiver from that requirement.

HR1 expands the requirement in CalFresh and it effectively ends the state's waiver and these changes are anticipated to begin in June 2026. At a high level, these work requirement changes apply to able bodied working age adults.

Certain adults are exempt, which we'll get into, such as those with certain challenges to working the required number of hours, such as disabilities or those caring for younger children. If you turn to page three, we have a table that describes the requirements in greater detail, starting with what the work requirement actually entails.

In Medi Cal, the requirement is 80 hours a month of work, education or Community Service, and in CalFresh roughly similar, it's 20 hours a week of work or participation in certain work programs which can include education or community service.

In terms of who's affected for Medi Cal, the requirement focuses on what is sometimes referred to as the ACA expansion population. These are the mostly childless adults age 19 to 64 who gained eligibility in Medi Cal as part of the Affordable Care Act in 2014.

In CalFresh, before considering any exemptions, the requirement applies to adults aged 18 to 64. Now, HR1 does have a number of exemptions in both programs from the requirement.

Going down the list, there's an opportunity for an exemption in both programs related to substance use disorders, disabling mental health disorders, significant physical, intellectual or developmental disabilities, other complex medical conditions. Pregnant individuals are exempt, as are those caring for dependent children under age 14.

And on that I'll note that's an important distinction because previously in CalFresh the requirement truly was for able bodied adults without dependent children, whereas now individuals with children older than 14 are subject to the requirement.

There's also an exemption for individuals caring with dependents with disabilities for high unemployment counties In Medi Cal only, there's an exemption for those recently released from incarceration and former foster youth. And in CalFresh you can also get an exemption if you're receiving unemployment compensation.

After accounting for all of those exemptions, the estimated number of people who will be subject to the requirement in Medi cal is about three and a half million people. And in CalFresh it's about 845,000 people.

The extent to which people will be disenrolled as a result of the requirement is subject to a lot of uncertainty, but estimates currently are that between 1 and 2 million people may be disenrolled from Medi cal and around 665,000 may be disenrolled from CalFresh.

I want to note that for individuals who do not receive an exemption, some will have a harder time complying with the requirement than others. For example, people who have been previously incarcerated may have barriers to employment.

They may not qualify for an exemption and that may make them more likely to lose their medi CAL and CalFresh due to the HR1 changes. Another population that is an example of this is the homeless population.

Turning to page 41 of the key impacts of the HR1 work requirements relates to the increased administrative burden that they place on Members in these programs, enrollees and the counties that administer the programs.

Research on the CalFresh work requirement or the SNAP work requirement in other states suggests that in General the requirement has not significantly increased employment, but it has resulted in disenrollments, including some individuals who may may in fact be complying with the requirement but are unable to demonstrate that and are then disenrolled.

And reviews of early implementation of Medicaid work requirements have had similar results. The extent to which disenrollment due to administrative burden happens in California is uncertain and it will depend on a number of things, including federal guidance that the state still hasn't received and the ability of counties to accurately and consistently provide exemptions where people qualify.

The state is currently taking steps to try to utilize existing information to automatically confer exemptions where it's possible. And these efforts are still underway.

As an example, the Department of Healthcare Services has estimated that about 40% of of individuals that are initially subject to the requirement will be able to be found either meeting the requirement or exempt without having to request additional information. And that concludes my comments. Happy to take any questions at the right time.

Thank you, Mr. Wilsey. Appreciate your presentation. We'll just keep going to the next panelist would be which is Sabrina Adams from the Department of Finance. Thank you.

Good morning. Sabrina Adams with the Department of Finance. We don't have any prepared remarks today, but happy to answer any questions at the appropriate time.

And same with Ms. Greaswell. Is she here? Natalie?

She's also with the Department of Finance. No prepared remarks at this time.

Okay, great. Perfect. Then we'll have Ying Chen Wang from the Department of Healthcare Services.

Good morning Chair Hart and Members of the Committee. My name is Yingzhen Wang. I'm the Deputy Director for Department of Healthcare Services leading a lot of the House Resolution 1 implementation as it relates to the eligibility provisions. So thank you for inviting me here today to share a little bit about DHCS's implementation plans.

So House Resolution 1 enacted on July 4th of 25 mandates new eligibility enrollment requirements for the Medicaid programs nationwide. California must comply with these federal changes which include community engagement and work reporting requirements for certain adults, changes to eligibility criteria for certain groups of non citizens, six month renewal requirements for specific groups and cost sharing provisions.

Firstly, wanting to share that in Medicaid abod.

I know in the Committee agenda reference that use that ABOD acronym and you will hear me throughout my remarks referencing that as work and community engagement for the Medicaid program and will be used interchangeably throughout the my remarks and also within my remarks also want to share that I'll be providing responses to the questions.

So under HR1, the work and community engagement provision which requires adults eligible as part of the new adult group which the LEO has shared in their handouts, individuals 19 through 64 in the Medicaid world making about below 138% of the federal poverty level beginning on January 1st of 2027 must comply with these work and community engagement requirements.

In the Governor's budget, we estimated that about 233Mi Cal Members will be losing coverage by June 1st of all 2027 and rising up to 1.4 million by June 1st of 2028.

In order for the Department to implement this, we are currently awaiting federal guidance which the Federal Government has stated in House Resolution 1 in federal law that they will have until June 1st of this year to provide guidance to all state Medicaid agencies.

However, we understand with the rigor of the provisions being introduced by House Resolution 1, we must act now. So on January 29th of this year the Department did release an implementation plan which outlines in detail the various eligibility provisions that will necessitate both policy, operational and system changes.

And that plan is meant to be iterative as we work work with our counties, with our stakeholders, with our tribal partners and our implementation partners as we get near all the various implementation timelines. No other state has really such a plan.

California is a leader in planning ahead for the changes and ensuring that we are ready as ready as we can be by January 1st of 2027.

And our goal as alternative outlined in the implementation plan is to really minimize the disruption on the Medi Cal applicants as well as Members and maintain coverage continuity as we navigate the various provisions.

We also have familiarized our implementation partners and the General public with all comer webinars webinars that the Department has put together in federal February to share as a resource because we understand digital platforms are important here.

As we are pushing out the various policy provisions, we're really doubling down on the outreach to our community and our critical implementation partners to minimize loss.

So as discussed, we are utilizing various coverage principles in order to implement this and one is to educate and train Medi Cal Members and providing our counties and our coverage ambassadors and these are individuals community partners who share information, help medical Members navigate through coverage with training, practical tools and ongoing support to assist Members.

If you effectively again streamlining processes and efficiencies throughout the plan and throughout my remarks, you'll hear the reference to the term ex parte which is the the biggest tool to help us in terms of gathering all data sources in the background so that we're minimizing the administrative burden on our Members and applicants up front. HR1?

S eligibility provisions does introduce quite a few of different pieces to how we do Medicaid eligibility today. So we are in the process of leveraging available electronic data sources to get more real time income such as gig economy data so that we can meet the various income compliance pieces necessitating an eligibility determination.

Also looking at other tools such as educational databases that reflect student enrollment because is one of the exemptions identified in HR1 that we're still working through and in terms of streamlining the determinations. Given that the CalFresh program also has a version of work requirements called ABOD for California, we have an integrated eligibility system known as CalSols.

So we have an ability to use the information available in either systems in the background to the extent it's appropriate for the program and apply it as needed.

So currently we are still in conversations with Department of Social Services as we are still gathering the various data sources available, but the intent is to really streamline the processes in the background so that we are minimizing the disruption for the Member who may have both programs. The agenda also asked a lot about the CALAIMAN Care program.

So in House Resolution 1, there is an exemption called medical frailty, which identifies five subcategories, including serious mental illness, as one of them.

And currently what we're trying to do internally within the Department is do an analysis and identifying the various types of codes, ICD10 codes, diagnosis codes that map back to the various categories of the medical frailty framework.

We understand that many of the population serve in CalAim, specifically the enhanced care, means management and community support populations of focus also overlap with the population serve under the CARE Act.

And also these populations, because a lot of them are Medi Cal members, they will be the medical frailty exemption that we are working through will more than likely apply to them.

So the framework does include a range of of codes that we have reviewed internally from a clinical perspective and we have also shared and has been reviewed by Clinicians in National Medical Associations. So that process is underway as we're working through the various definitions of the framework in terms of outreach for these populations.

So in the Governor's proposed budget, the Department did propose $17.5 million for an outreach campaign. And that is a required element of HR1 that all states Medicaid agencies implementing work and community engagement requirements have that in place by October 1st of this year.

So the Department has learned quite a few lessons from the continuous Coverage Unwinding campaign, which is the as we were coming out of the Covid 19 pandemic, there was a need for us to redetermined all individuals enrolled in Medi Cal.

And we had a very similar outreach campaign where we had a vendor to assist us from a tactical perspective and making sure we're targeting the right groups and the messaging is correct. So the proposal seeks dollars to do that.

And at the same time, given that that is going through the budget process, we have started text messaging campaigns to individuals that are potentially subject to the work requirements.

We have started that in February of this year and this will be a continuous process until we go through and get through the implementation and also very specific General noticing will be sent out.

We're partnering with California Healthcare foundation who's a assisting us with a lot of the usability and user testing of the messages so that we can make sure it's culturally relevant. It actually speaks to a call to action for the Members.

And within the people that are involved in the focus testing are a mixture of people from various medical demographic caregivers, individuals who have identified with a disability.

They're also involved in kind of the review view and the user testing component and also sharing that as part of the outreach effort, just so that we are prepared strategically, the implementation plan identifies two phases for the Department. So all the tools I referenced will be kind of complementary to this approach.

So phase one is awareness and preparation. So that begins February of this year and we are anticipating that to continue through September, September, August, time frame of this year.

And then in phase two, the message that we will be sending out to individuals will shift slightly to a tone of call to action because you know, we want to make sure folks understand that there is changes coming up. It will impact you, but there's action that you need to do in order for you to meet this.

So all this to say that this is iterative, but we have certain tools in place at this time to at least start the process. And in closing, wanting to share that we will continue to use the available tools.

So for the CARE act in particular, I know we just released our annual report for this in July of 2025 and it's an annual requirement under state law for us to report on the impacted populations. So we'll continue to kind of report on that now that with the HR1 provisions overlaid. Secondly the ECM and community supports.

We currently have a dashboard on the DHCS website which is dynamic and you could track based on the county of interest. And so we'll continue to make sure those pieces are reported.

But in terms of the eligibility aspect, since the populations being served by these initiatives are also medi cal Members, we will have in spring of 2027 adding to the eligibility dashboard that the Department currently puts that's available on the DHCS website, a very specific section that will report on work requirements.

Today the eligibility dashboard is online and you could kind of look at various toggle between different counties, age group language, primary language and race and ethnicity. So we will add that on as part of the reporting on HR1 once the initiatives are live. So thank you for your time today and happy to take any questions.

Thank you, Ms. Wong. Appreciate your report. That was very helpful. Next we have Alexis Fernandez Garcia from the Department of Social Services.

All right, thank you. Good morning again. My name is Alexis Fernandez Garcia and I serve as the Deputy Director of the Family Engagement and Empowerment Division at the California Department of Social Services which oversees the CalFresh program here in California. Thank you for the opportunity to discuss the impacts of HR1.

I will focus my remarks today on the time limit for Able Bodied Adults Without Dependence or ABODs.

You'll hear me refer to that acronym throughout my testimony as well as how the Department is approaching implementation and as my colleague mentioned, there are many other components of HR1 that we're also working through, but today we'll focus on this topic.

Let me just start by recognizing that CalFresh benefits provide an essential safety net to millions of Californians supporting the overall health and well being of eligible recipients. It is our aim to protect benefits for Californians as much as possible given the circumstances of implementation related to H R1.

We are approaching implementation with three core commitments mitigating harm through timely decisions, guidance and communication making evidence based data driven decisions and maintaining transparency by engaging with our county partners and those with lived experience the CalFresh time limit rules have been in place since 1996 Welfare reform states have historically been able to implement waivers of the rules for areas with high unemployment.

As such, California has not implemented the time limit at scale since before the 2008 economic recession. The rules were also suspended nationally during the pandemic.

The time limit rules limit calf eligibility to three months in any 36 month period unless an individual is exempt, meeting the work and community engagement requirements or living in an area with a waiver due to high unemployment.

HR1 keeps the basic structure of federal time limit rules but significantly expands who is subject to them and reduces who qualifies for an exemption. For example, HR1 expands the age range from age 54 to 64 and lowers the dependent child threshold from 18 to 14.

It also eliminates exemptions that were in place prior for people experiencing homelessness, former foster youth and veterans. Exemptions remain available for people who have a dependent child under the age of 14 in the home who are disabled, pregnant, or exempt from what is called a work registration.

It's a separate rule, but if you're exempt from that rule, then you're also exempt from the time limit as well as people who are determined. And this is the federal term unfit for work and that is defined in regulations and a newly added exemption category for people who identify as American Indian.

Of note, HR1 also changed the criteria for states to qualify for a waiver of the time limit, limiting waivers to areas with unemployment above 10% to make this tangible.

For California, this has resulted in the loss of our state statewide waiver and only being eligible for a waiver in seven counties Alpine, Colusa, Imperial, Merced, Monterey, Plumas, and Tulare, and that is through the fall of 2026.

As a result, more Californians will be subject to the time limit and at risk of losing CalFresh benefits unless they are exempt or meet those work and community engagement requirements. I'm going to Talk a little bit about the numbers here in California. Currently we serve about 2.7 million adults age 18 to 64 on CalFresh.

That is a statewide number. Based on what we already know from our data, about 1.8 million of those recipients between the age of 18 to 64 or 2/3 are already expected to be exempt. And and this is based on administrative data that is already available to us.

For example, we know that roughly 880,000 of these adults live in a household with a child under 14 and therefore we can establish an exemption based on that information being available to us.

This leaves approximately 950,000 adults, or about 17% of our total caseload, whose exemption status is else unknown at this time or who may be subject to the time limit because of HR1. That's about 600,000 additional people compared to if we had run the same estimate under the pre HR1 rules.

Based on our initial budget estimates, we anticipate that of these 950,000 individuals, about 110,000 will be determined exempt based on new information that can be collected by an eligibility worker during the interview process. And we also estimate that about 180,000 or so would be able to meet the work or community engagement requirements.

And we make that estimate today based on the earnings income earnings information we see in our system indicating that they are already engaged in work. California will begin implementing the time limit on June 1, 2026.

This timeline for implementation reflects what is required to align policy, update the state's eligibility system and train county eligibility staff to implement these rules at scale. In my remarks I mentioned it's been quite a while since we've implemented these rules here in the state of California, particularly at this scale.

And so that time really is necessary to make sure the workforce is prepared to do so accurately. Because federal rules require that exemption screening occur at either application or recertification before we can actually make someone subject to the time limit. Existing recipients will be screened at their next recertification.

So what this means is most screenings for an exemption from the time limit will take place naturally over a 12 month period, which also helps manage county workload. The Department's time limit policy guidance emphasizes a three step approach to implementation.

First is to identify an individual as an abod, accurately ensuring that the rule is only applied to relevant CalFresh recipients. Second is to screen for exemptions when data is not already available in the system. And we will do our best to make sure as much data is available as possible.

This will look like a discussion between an recipient and an eligibility worker to ensure all possible exemptions are explored and can be supported by submission of additional information if needed. Many exemptions can be verified via client statement.

Third, for those who are not exempt to engage and offer support connecting to a qualifying work or community engagement activity, this may include a referral to a service like an education and training program, maybe one that's already available within the county such as CalFresh and Employment, the CalFresh Employment and Training program, connection to volunteer opportunities, or an option called workfare, which counties are exploring in terms of the feasibility of implementation to mitigate harm and support consistent statewide implementation.

We are, as my colleague mentioned, maximizing exemptions by using data already available in our systems whenever possible and exploring additional opportunities to do that as well.

As I described a timeline that reflects what is required to implement the rules accurately, consistently and in line with federal requirements, while recognizing that time is needed to automate systems, train county staff and communicate changes to impacted individuals.

We've also launched a statewide Partner Engagement Series, county office hours, attendance, expanded policy training and support all to support consistent implementation statewide and carry out that three part vision. We are regularly engaging with the Department of Healthcare Services to our line our policy and operations when possible.

There are some challenges from a policy perspective where alignment is not totally possible given the federal rules, but we're going to do our best to make that work and invisible to the client.

To further support counties and clients, CDSS is developing a outreach toolkit with client tested messaging and we talked a little bit about the alignment with the Department of Health Care Services who will have similar requirements.

We know many people receive both CalFresh and Medi Cal so that is essential a county resource toolkit to support consistent exemption screening and easier connections to qualifying activities.

We are also preparing to help individuals meet requirements where needed, expanding CalFresh employment and training and providing technical assistance to counties who may not currently be offering it but are interested exploring what I refer to as workfare programs outside of employment and training, working with our own agency, the Health and Human Services Agency and the labor and Workforce Development Agency to strengthen cross system workforce connections.

We are currently designing some local pilots to identify those best practices and I will just end my remarks by saying that even with these efforts it is critical to acknowledge that we expect many Californians may lose access to CalFresh and face increased food insecurity and greater difficulty meeting basic needs.

We will do our best to mitigate that harm, but we recognize the corresponding impacts on their health and well being.

Thank you Ms. Fernandez Garcia, that was really helpful. Appreciate it. Next we'll have Mr. Rohr from the San Francisco Human Services Agency.

Thank you. Good morning, Chair Hart and Members of the Committee. I'm Trent Rohr, the Executive Director of the San Francisco Human Services Agency, which is a position I've held for the last 25 years. My colleagues at the state did a nice job laying out the provisions of HR1 potential impact statewide.

And I think we share the goals of maintaining coverage both for Medi Cal and for CalFresh given the constraints under HR1.

But what I want to talk about today is sort of the implementation challenges at the county level, what it's going to take for us to implement the provisions of HR1, the benefits of keeping people on Medi Cal related to the topic of the hearing, and some suggestions for the Committee.

Because the hearings focused on the impact of HR1 work rules on California's behavioral health and criminal justice programs, my testimony is to largely focus on Medi Cal rather than CalFresh.

However, I do want to note that some of the same Medi Cal eligibility challenges that I'm going to talk about really also apply to the 1 million or so CalFresh recipients who will require county eligibility support to identify exemptions or help them support meet the work requirements.

Over the past decade, San Francisco has made measurable, sustained progress in expanding access to safety net programs. During the Affordable Care act rollout in 2014, my agency enrolled more than 100,000 low income residents onto Medi Cal. Most of them were receiving health insurance for the first time in their lives.

Our CalFresh caseload has increased by over 125% since 2018, and we now reach almost 90% of the eligible individuals in San Francisco providing monthly nutrition support for more than 112,000 people. These outcomes reflect years of coordinated state and county investment in our human services eligibility workforce, in automation, in community partnerships, and in outreach strategies.

HR1's work requirements jeopardize this progress. From a technical standpoint. The policy introduces new administrative layers that disproportionately affect individuals who already have the highest barriers to compliance. People with serious mental illness, substance use disorders, and those experiencing homelessness.

These individuals are at the core of California's behavioral health and criminal justice strategies through calaim through the Behavioral Health Services act and the CARE Act. All of these interventions and strategies depend on Medi Cal coverage as the foundation for service delivery in San Francisco. We've operationalized these initiatives with measurable results.

I'll give you a couple of examples through the Just Home Project. In partnership with a community based organization, we use Medi Cal Dollars to not only help House 19 justice involved youth, but also to provide ongoing enhanced care management specifically designed to prevent recidivism and protect their housing stability.

For justice involved Medi Cal enrollees who are at risk of homelessness, their medi Cal coverage allows them to access the housing trio, which we call it the housing trio of navigation, security deposits, rental deposits and tenancy sustaining services.

Another example we are we're preparing to launch a recuperative care model under CALAIM for high acuity adults who are currently living in supportive housing. These are formerly homeless adults. This model is designed to reduce hospital utilization by delivering clinical support directly where the clients live in their housing.

And this is an approach that's backed by cost effective effectiveness research and consistent with federal Medicaid expectations for community based care. Keeping our most vulnerable connected to the full array of services and supports available through CALAIM and these other initiatives hinges on retaining Medi Cal coverage for these clients.

To accomplish this, we must ensure that county human services eligibility staff can effectively screen for and and verify client exemptions from the work requirements, which almost all of the individuals served under these programs will certainly qualify for.

While robust and discerning exemption screenings are among our most effective strategies for maximizing Medi Cal program retention, counties certainly San Francisco and my colleagues in the 57 other counties face many challenges to performing this additional work.

Foremost among these challenges is that counties are currently not adequately funded to implement the state's guidance around the exemptions, especially when it comes to effective screening and exemption verification among individuals with complex behavioral health needs and people experiencing homelessness. These are populations that I'm sure you know are typically very hard to reach.

Although DHCS and was pointed out earlier is doing a lot of work on data matching to provide auto exemptions and auto verifications for medical recipients from these work requirements.

The clients that I'm talking about tend to be outside the grasp of several of these data systems that will be used to auto exempt them, which means that the majority of them will require county eligibility staff to directly engage with them to assess and verify their eligibility for the exemptions.

In fact, DHCS estimates that about 60% of MEDI CAL enrollees subject to the work requirements that's about 2.8 million people statewide will not be auto exempt and will not be auto verified. This is a critical operational issue.

The populations most affected, particularly unhoused individuals, are not reliably represented in administrative data sets used for automation, including employment records, federal disability systems, and some specialty mental health specialty mental health claims. The data bears this out about 83% of people experiencing homelessness in California are covered by Medi Cal.

Yet only about 52% report having a regular site for care. And although 82% of homeless report experiencing serious mental illness at some point, only about 24% are actually receiving mental health treatment that would appear in the specialty mental health claims systems.

This means that the state's most promising pathway for automation, which is claims based identification of medically frail individuals or will systematically miss a large share of this target population. Equally significant, and as was pointed out, homelessness alone does not qualify someone for an exemption.

Under the federal rules, county eligibility staff must establish co occurring clinical or functional conditions that would exempt them. But because Medi Cal the Medi Cal eligibility process has no interview requirement. HR1 introduces an entirely new business process for counties.

Proactive outreach screening for clinical and functional limitations, documentation follow up and documentation verification for individuals with behavioral health needs. These processes will certainly require repeated contact attempts, tailored engagement strategies and coordination across housing and health providers. At the same time, 80% of San Francisco applications arrive online and I think this number is consistent statewide.

And many of these applications that we get online are incomplete. The additional eligibility factors under HR1 will increase the number of applications and renewals that require our manual follow up. And because ex parte automation rates, this is sort of automatic, renewal rates for Medi cal remain about 40%.

The new six month renewal cycle under HR1 will double the frequency of manual touchpoints for a very large portion of our caseload. This will generate new noticing requirements for clients, certainly higher call volumes to our service centers, increased walk ins in our lobbies and confusion.

These are patterns that are documented documented in the other states that implemented these work requirements under Medicaid for counties, it will it will generate sustained workload growth and screening, reviewing documentation, assessing exemption criteria and taking action on non compliant cases. Without additional staffing, the results are going to be predictable.

There will be significant coverage loss not because clients are ineligible, but because the county eligibility infrastructure cannot meet the federal administrative burden. The coverage loss among medically frail high acuity groups has significant downstream impacts. Increase increases in uncompensated care, psychiatric emergencies, jail, cycling and homelessness.

All of these undermining calaim's cost containment goals and local behavioral health stabilization efforts. To be clear, we embrace the automated system solutions and we're actively working locally and with our state partners on implementation in real time.

But because we already know that the majority of medical recipients cannot be retained through these ex parte automated means, and given the stakes are high and the tight timeframes that the Federal Government is putting upon us.

We urge the Legislature to have a comprehensive plan that includes not only the automation but support for the human workload to serve this very challenging population. For these reasons, the County Welfare Directors association urges the Legislature to take two actions.

The first is to release the $20 million in General funds in the 2025 Budget act to support county Administration of the CalFresh ABOD requirements so we can start the eligibility work now. And I have talked a lot about Medi Cal, but it's important to Note that about 90% of our CalFresh recipients are also getting Medi Cal.

And so starting this eligibility work now, Preparing for the June 1st ABOD implementation in CalFresh will help us get a head start on the Medi Cal work.

And the second ask is to support the CWDA proposed $373 million General Fund augmentation in 26-27 to stabilize and expand the county eligibility workforce needed to operationalize HR1 in both Medi Cal and CalFresh. These are targeted necessary investments to preserve statewide progress in behavioral health reform, homelessness reduction and justice system diversion. HR1 implementation is an administrative challenge.

It's not a policy choice. And the only scalable strategy to mitigate harm is ensuring that counties have the capacity to conduct accurate, timely exemption screening at the volume that's required. Thanks for your time. Appreciate, appreciate it and welcome your questions.

Thank you, Mr. Roy. That was very helpful to understand exactly what counties are facing to supplement the work that's going on at the state level to keep people enrolled. Next, we'll have questions from colleagues, Members of the Committee. Anybody want to have a question similar.

Thank you, Chair Hart, for covering this incredibly important topic. And to each of the panelists, really appreciate your expertise. And I think this is the third hearing I've been in this week, including from our esteemed health policy chair, who held a hearing on this yesterday.

I held a hearing in the budget sub one that Ms. Bonta sits in on that and I on her health policy Committee.

I'd say since we got back to session, we've had five or six, easily five or six hearings on this topic, which I think says to the people of California how important this is and how vital it is that we're able to navigate what is happening with HR1, which I really have referred to as a sledgehammer to, to California's ability to continue care for the 94% of people that were previously insured in California.

We've always aimed for health care for all, really, and we've gotten very, very close to that. So I want to appreciate your work. And when I think about these work requirements, I think of this as red tape from the Federal Government.

It's just layers and layers of red tape that our Federal Government has said they have wanted to cut red tape, make life easier for Americans, make life easier for regular working people, and yet are putting tremendous barriers in front of us and so really respect the folks doing the work.

One of the questions that I have is about the money for outreach. And we talked about this a little bit in our hearing yesterday. The 17.5 and the 4 million. Anyway, we heard a very robust plan in our hearing on Monday. Excuse me, about how outreach was going to happen in the two different phases of outreach.

But we had MICOP at the hearing, and I know Chair Hart knows MICOP very well because they really come out of his district. But when they came to the hearing, they said digital is fine and good, but the human aspect of outreach is unmeasurable in terms of the good that it can do.

They really talked about the importance of promotores, of human health navigators, of multilingual folks that can go direct to the workplace. I mentioned in that hearing that I thought it would be important to be talking with employers and that the departments are working with employers in terms of doing this outreach.

I'm just wondering if you can elaborate a little bit on your spending plan. Digital versus human, how that's all going to come together to make sure that we're meeting people not where we think they're at, but where they tell us they're at.

Thank you. Assemblymember Addis I think in General the 17.5 billion budget requests is. I think we've took the comments that we've received on Monday and I think we're taking that back in terms of kind of integrating that in our thinking.

You know, if this budget request is to be approved, these will be the important features we will be requesting in terms of an actual plan for the Department. And I think we will be emphasizing that human touch. I don't think we are misaligned in that sense.

I think we've learned through the COVID-19 pandemic coming out from that, that person-to-person connection, meeting the person where they are, is super important. And I think the information we shared on Monday is.

I think we were just kind of taking what we've learned through the unwinding campaign in terms of the certain metrics and things we are going to measure. But I think the human touch we could definitely integrate should the budget request is approved and request a more kind of tactical kind of approach to this.

Thank you for that. I had a couple more questions and maybe this is for DOF and if you covered it already before I got here, if you don't mind repeating. But you know we've heard a lot from the counties and your testimony so important and we've heard a lot about how important this is.

Yet no money in the budget really for counties to be able to navigate and just you know, what's the, what's the thinking there to talk about how important this is and how sensitive and empathetic and all that we want to be but yet not have money in the budget.

Happy to take that question Assemblymember Addis so I think the Department does recognize there will be an increased administrative workload on the counties really from all aspects.

And I think in our DHCS public budget highlights we actually do mention that just given kind of where the timelines were at the time of the preparation of the various documents and and numbers. We didn't have adequate federal guidance at that time to put anything into the governor's budget.

But I think we've acknowledged we're working with the County Welfare Directors Association and actually we're having another follow-up with them this week to discuss the added costs for the counties and working something towards this spring.

So I think we're probably publicly have acknowledged that in our budget highlights and we will continue working in conversation with them given that federal guidance is coming to us piecemeal. And I think it's very important for us to at least make sure we're assisting and providing the necessary guidance and dollars to support our counties.

And I would just encourage. We've had a lot of conversation and I know this, we've had the public conversation. I also know that the Legislature has been working with the governor's office, but about not having major surprises at May Revise, about really having an open and collaborative process.

So, you know, I think the counties are asking for somewhere around 660 million. It would be, in my opinion, problematic for us to get to May Revise and then all of a sudden we have huge surprises one way or the other. Right.

And so we really want to be working together to make sure that those funds, that we understand what the proposal for those funds is and that it doesn't stay nebulous up until the last moment. And I don't know if you had anything else. You look like you maybe had a comment to make.

I do. Thank you. Thanks. It was with respect to your outreach question and what we have found at the county level that we do do texting directly to clients, we do outreach through electronic means. But the most effective is direct engagement with targeted outreach in neighborhoods with specific client groups in partnership with community based organizations.

An example of sort of the interest at the community based organization level. In HR1, we hold quarterly what we call Benefits 101, which are webinars that we open to citywide. And we had, because of the technology, we only were allowed 1000 participants and we exceeded that immediately. And there were about 700 who couldn't get in.

So 1700 people were interested in hearing more about HR1, how they can inform their clients. These are Spanish-speaking recipients in the Mission. These are Chinese American recipients on the west side of town and in Chinatown. We're doing language-specific work. But, but the interest is there. And the questions were always how can we participate?

How can we help our clients? And the best way of course, is for us to inform them, you know, what are the requirements, how are we implementing them, how can they, you know, touch us via, you know, electronically phone, lobby, etc. But that's how you do outreach at the same time. That's also very expensive and time-consuming.

You know, we have, as I said, we have over 100,000 MediCal recipients, where these, these requirements will fall to over 35,000 calf risk recipients. The scale of that, you know, and we're sort of a medium-sized county, right. The scale of that statewide is it's, it's mind-blowing really.

And so to be effective and if we're really going to use outreach as a tool Those are the types of things we need to be doing.

I want to appreciate that. And I just, I hope that as those plans are developing, you're working closely with, you know, closely with the counties, closely with the community groups that know best how to do, how to do that outreach.

And then my final question was you mentioned, and I apologize, I don't remember who, but one of you mentioned Monterey County. And if you could say again, somebody, when you were presenting, mentioned Monterey County. If you don't mind saying again what you were referring to.

Yes, sorry that I couldn't hear you, but that was me. I mentioned Monterey County in context of being one of seven counties who qualifies for an exemption, a waiver of the time limit rules through fall 2026.

So those seven counties have an unemployment rate per the federal regulations that is high enough to waive the rule, meaning we do not need to implement it in those counties that goes through fall of 2026.

At that point, we have to look at the data again under the federal parameters and determine if they're eligible for a continuing waiver, if other counties may be eligible, or if they lose that waiver. When you're not under a waiver, you do have to implement the rules.

Got it. Okay. And then, sorry, Chair, just one last question. I know that the Federal Government is supposed to or is required to issue implementation by June 1, 2026. Implementation guidance. I think we have learned that this Federal Government can be very erratic and follow through or not follow through on a variety of different promises that are made.

And so there's seven months really to get ready. What's the contingency if guidance isn't complete? It seems right now a lot of the things coming out of the Federal Government are just very confusing and hard to know if we're able to comply and how. So what's the contingency plan?

Yeah, so the way we understand the timelines are short and I think in various federal conversations, I think we have pretty. I think all the states that are implementing work and community engagement requirements have stated that there will be very little room for states to pivot.

However, that being said, we know it requires significant time for us to get the policy and operational components ready.

So we have actually started a lot of the system programming in the background leveraging, you know, our interpretation of what's in The House Resolution 1 federal law, our lot of associations, policy associations nationally, who have provided lots of interpretations as well as our own understanding of the expertise. So a lot of this is currently in the works.

At this time. And we have configured and designed the system so that it's configurable, meaning that there's an ability for us to turn on and off the functionality. And there are certain parts where we know, given that there's still a lack of federal guidance, we have an ability to modify and tweak.

However, that being said, we could only plan for what we know. But at this time, I think we are and have designed the programming so that as we're nearing June, we have an ability to kind of assess if we need to make significant tweaks versus minor tweaks.

And again, the contingency is the technology from a configurability perspective for us to do so, given how we have advanced our technology for some time now. Yeah.

And one of the reasons I asked the question is the, you know, the last thing we want to do is harm people before we have to, honestly.

And I know that California, and I'm sure our Health Policy chair may have this question, but, you know, California has actually, the Governor has proposed putting policies in place that actually harm people before we need to, that are leaning into components of what we believe is HR1 that we actually don't have to lean into.

And I would hate to see us do that on the back end as well, assuming that there's going to be some kind of rule or regulation or whatever it is and putting things in place that remove people from being able to get the help that they need.

Come to find out that that thing didn't roll out the way we thought. Right. So just to be ready but do the least harm while we have the opportunity.

Yeah, absolutely. I think we share the same principle. Thank you. Thank you.

Thank you. Assemblymember Addis, questions from other Assembly Member Sharpe Collins.

One of them was going back to the document that was issued. I just wanted to make sure that this question was answered because I wanted to get clarification on how do individuals demonstrate a disabling mental health disorder or a substance abuse issue. I just felt that I missed that particular piece.

I want to know if someone can elaborate on that.

Okay. I will start with some of the details related to CalFresh and then I'll hand it over to speak specifically to health care. So under federal rules, a mental health disorder or a substance abuse issue would fall under an exemption category that is called medically certified as physically or mentally unfit for work.

And so within that category, we include people who are receiving or who have applied for temporary or permanent public or private disability benefits. We include people who are obviously physically or mentally unfit to work. I'll talk a little bit more about that in just a minute.

What that means who are determined physically or mentally unfit by a medical personnel. And indicators of what an obvious unfitness might include are things like chronic homelessness or struggling with drugs or alcohol or being possibly a victim of domestic abuse.

So those indicators aren't exemptions in and of themselves, but as a state, we've put out guidance encouraging counties to explore those indicators and understand how the. Let's use the example of struggling with drugs or alcohol and contributes to an inability to work.

If the eligibility worker, through the exemption screening process, determines that someone has a challenge with drug or alcohol, is a victim of domestic abuse, is homeless, and that condition creates a barrier to work, they are able to document that in the case record and grant the exemption.

And so really, the essential component here is the exemption screening, the discussion between the eligibility worker and the individual, and really good case documentation. If those pieces are in place, we can grant the exemption. We don't necessarily need additional documentation.

You don't need to show me, for example, that you're going to AA every week, 20 hours a week. That is not necessary. It can be verified based on the client's statement and the criteria that we've laid out for the category that I refer to as obvious. This is where we do have some flexibility as a state.

If the EW, through that discussion or observation, if the interview is happening in person, sees or hears of these barriers, they have to just document them in the case record and they can establish that exemption. So really, that's where the exemption screening comes into play.

So still having that particular process and knowing that we have administrative burden, you know, of being able to have enough people eligible to do that. So we're a lot of people still going to be missed.

That's right. So we will try to maximize administrative data to the extent we can. You can imagine, for example, that there might be some data related to someone receiving a service for a mental health condition or a struggle with drugs or alcohol, while protecting client privacy and navigating some of the nuances there.

If it were available, we could use that data. But we recognize, as Director Chor mentioned, that that may not be available for everyone. And so, yes, those are the individuals where the exemption screening really is the opportunity to have the discussion and establish the exemption.

Okay. And then also, as we continue to talk about the streamlining, and I'm just wondering, because I didn't hear anything pertaining to working with the institutions, such as universities and so forth, for college students that could be impacted by this.

So I'm just wondering from a previous hearing it was brought up, but I'm just highlighting in this hearing it would be nice to hear a little bit more about that. Do you have anything about your relationship or partnerships with universities to ensure students don't fall through the cracks?

Yeah, no, absolutely. We actually are meeting with the UCs this week and actually have made connections with the CSUs and the community colleges as well. We know it was also brought up in our Medicaid Member Advisory Council. And there's students being represented as they're receiving MediCal.

And those brought up that, you know, outreach targeting like student associations will be critical. So we're talking with a lot of our education partners.

One, I think to obtain, think of creative ways to obtain student enrollment information since it's one of the exemptions for this and secondly, looking at what opportunities there may be for us to partner with them on outreach. So the Department is working with them in partnership. Yeah.

Thanks for the opportunity. Just your question about the exemption process from the perspective of the eligibility worker who's doing the assessment.

Very often with this population, given the nature of the relationship with the eligibility worker, they are often reluctant to disclose if they may have a mental illness or a substance use disorder and therefore would be required to do work participation activity.

But then when the individual is placed in, whether it's training or work for some sort of placement, that mental illness or that substance use disorder reveals itself through the actions of the individual in that placement. That would then come back to us. Person would then fail out, would not be compliant.

But it's then on us to sort of have that discussion again. And it's just I wanted to mention that because it illustrates sort of the extensive work that's required in order to grant that exception when people don't want to reveal very personal information to their, to their caseworker.

One more thing, noting that both MediCal and CalFresh are requiring either the 80 hour a month of work or 20 hours weekly of work to qualify for the programs. But as of now, going back to CalWorks, if you're working 100 hours, you lose your qualification. And so how would this be balanced within casework?

And what will happen for those individuals caught between confusing work requirements? And I'm asking that because I'm looking at, I do have a Bill that's doing this work to cut the outdated requirements.

So my Bill is 1755 and I just haven't heard that part being discussed because if this Bill passes, obviously, it won't be an urgency clause right now, but that's still another time frame for it to be implemented. So people will be impacted with that work requirement. Have that been thought about, discussed, and what's the game plan?

So I want to just acknowledge that you are highlighting the complexity of these rules across programs.

And so you are correct that we also have people receiving CalFresh and MediCal who are on CalWorks, which is our cash support program for families with children who are looking to engage in work and careers and get on the pathway to economic mobility.

And under the Federal Rules for CalFresh, if you are already receiving CalWorks or TANF, you're not a ABOD, so you are actually exempt from the rule entirely. And so you would follow the rules related to CalWorks.

So to the extent we made any changes related to how eligibility is determined or how welfare to work benefits and services are maintained, those would happen in the CalWorks side, and the individual would not be subject to the CalFresh rules, and I believe not subject to the MediCal rules. As a TANF recipient, either.

That's correct. That's correct.

Thank you, Assembly Member. Appreciate your questions. Assemblymember Bonta.

Thank you. And yes, we have been diving deep into this space for quite a while.

One of the things that came up in the roundtables that we did over the interim as we were kind of preparing for the impacts of HR1 was a pretty consistent longing from the counties around having more guidance and communication and consistency from the state so that we could avoid the situation that there would be kind of a differential application from depending on which county that you were in rounds fulfilling the work requirements or determining the exemptions.

Can you all speak to how you are making sure that there's greater consistency across the, across the counties? And I want to just give an example that you just offered. If you know what is up to the discretion of the county, what is the requirement of the Federal Government?

What is our requirement in the example that you gave where somebody could be attending AA meetings as the qualifying evidence or a determination by the county worker? You know, there's a lot of gray area there and, and counties are very significantly resourced differently to be able to support that.

So what, what proactive steps are we taking to create more consistency?

Sure, I can start to speaking to the approach we've taken on the calfresh side.

So we received all the federal guidance we expect to receive at the end of 2025 or in the fall and we issued our kind of comprehensive guidance that guided automation in the system and kind of the launch of our planning process on December 31, right at the end of the year that triggered then the kind of six month pre implementation phase.

So in addition to that guidance, I can speak a little bit to what we have underway. We will be issuing a follow up Q and A document that reflects questions we've received from counties. We will also then use that to inform what we call our ABOD handbook.

It is something that we've had in place for years now, but has been revised. This is a roughly 70 page document where all the guidance is located in one place so that counties don't have to look back to past letters.

We've also hosted a monthly county operations meeting series where counties have given us their feedback, engaged in policy decision making, operational conversations. It is what is informed the guidance, the Q and A and whatnot. We have monthly office hours available to them. And we've also hosted a series of webinar trainings that will continue past June 1st.

As we look toward the implementation date and it's underway, we have a couple of teams and structures in place to support counties in consistent implementation. We have a technical assistance team that we are in the process of expanding with an investment from the Legislature. So these are consultants, if you will, who go out in counties.

They're assigned to a particular number or a region, they offer resources, they respond to resource requests. They have, I mean it's online series of tools that are available. They do trainings, they go on the ground, they do business, process, re engineering, whatever, whatever counties really need.

And we also have two other teams, our management evaluation team, which is an oversight team but really focused on program access. And they are building out again with an investment from the Legislature, a component into those reviews. And we do about 45 of them a year related to the time limit.

And so we will not only look for compliance with federal rules, but as the name suggests, program access. That is what these reviews are about. We go into lobbies, we talk to clients, we call into call centers, we talk to staff.

And so really as we move forward with implementation, working very closely with the counties to understand what their needs are and to respond with resources, guidance and tools that are implemented statewide to get to that consistency and encourage all counties to try to align as not try to align as closely as possible to our approach as the state.

I wonder about the fact that there are going to be. We've also been consistently told that counties are going to need to expand their eligibility workforce threefold 3x5x10x from what they currently have.

Given the complexities, do you all feel like we are treating this and the dynamic nature of this in the same way that we treated COVID 19 pandemic? How often was the state engaging with county offices?

Yeah. On I can pandemic, daily. Yeah. And I think for us, we're actually leveraging a lot of that engagement model. Assemblymember Bonta, we are actually on our end on the DHCS. And every two weeks, very similar to kind of the COVID sequence.

We are meeting with our counties, doing really deep trainings, refreshers, looking through guidance together, walking them through. And these are the actual program managers and their staff that are actually on the ground implementing the policies.

And also as the months, I think in the next two months, we will be looking to be restarting some of our regular meetings with the county directors so that we could actually start preparing. And for us, the difficulty on the medical side is we don't have a lot of federal guidance to guide us at this time.

But I think in terms of the engagement cadence and the material, we're looking to really model that practice from the COVID 19 era.

Yeah, I continually hear that we don't have the federal guidance. And I understand how that is incredibly problematic. And that is the fault of this Administration that people have heard me say this many times. We know why that is happening.

It is happening to be able to cause people who are the most vulnerable to not have the health care and the food security support that they deserve. We know the animus associated with that.

I am wanting us to be in a position, though, to fight fire with fire in terms of the infrastructure that we need to be able to set up in order to be able to receive those that federal guidance when it comes.

So the content might be more specific as we get closer to that date, but it is our responsibility right now to make sure that we're setting up the infrastructure to be able to do that. I am concerned that we are 200 and I don't have my glasses on 96 days away from the day from.

From the date of this hearing where these requirements go into place and the time lag between us being able to fund and commit to funding counties at the level they need to in order to be able to have the eligibility workers to do this.

You know, you'll snap your fingers and people show up for work and get trained for that job.

And the timing between when we will make a decisive decision to move forward, funds to be able to support that and when these will go into effect because once people are off, they will be off and lost to us in the system and it will be very hard to get people back on.

I would love to in the many more hearings we will have on this hear from the various departments around how we are actually building the infrastructure and whether there is a significant time lag and gap that we are not actually tuning into. With the urgency that I believe that we need to I'll let the county speak to.

I'm glad you brought that up, Assemblymember Bonta. Let me highlight what it takes to bring an eligibility worker on.

Since you mentioned that the time tight constraints we're operating under and you're you're spot on our estimate on the on based on the increase in workload and to implement HR1 in the most compassionate manner possible to retain maximize the number of people who retain benefits.

We estimate we need 178 additional staff about 90 on the eligibility side and then the remainder on the employment services side because we don't want this to be a a make work sort of environment for for our recipients. We want this to be a real for those who avail themselves of the work opportunities.

We want them to receive real training, real job placement coaching, etc. So we have sort of these two components. We don't yet have the funding for it. We're you know county fiscal constraints are what they are and so we're eagerly awaiting the state's decision on this in the state budget which adds to that time constraint.

So say we're trying to hire 50 eligibility staff posting it civil service list exam say three months to hire. Then it's a six month induction training into the eligibility world learning CALSA system learning all the rules.

In addition to retraining the existing 600 or so eligibility staff we have on the new provisions of HR1 not yet receiving the full guidance from the feds. So we are under extremely tight timeframes.

The notion that we're training say 50 to 100 new eligibility staff in addition to 600 existing strains our resources beyond belief and there is no way we'll be fully trained up by January 1st. Fortunately, it is a phased implementation. It's not all Medi-Cal recipients on day one.

But we are significantly under the gun in terms of time constraints given the budgetary process in Sacramento.

Yeah and I am very fearful about the consequences of that. Clearly out of sync time frame. If you're telling us that it takes nine months to be able to bring somebody on board from the time that you.

Right. Nine months from the time they're hired to the time they can actually work with a client. Right.

Yeah. That's probably being quick. Yeah. Two hour budget chair who I love dearly and thank you for doing the incredible work that you are doing. Assemblymember Addis, certainly, this goes to Dr. Jackson as well, who's not present us, moving with urgency and potentially early action should be something that we are thinking about as it relates to this.

I also am curious about and we heard about this as well about the level of, or I should say the lack of trust that there is in government right now and in particular among our immigrant community members. People have been living in the shadows.

They are certainly staying in the shadows right now as we are forced to reckon with the incredible attacks on our immigrant communities in this moment in time. That is something that is certainly intensified exponentially in this moment in time than it was during.

I'll go back to the other crisis that we had, public health crisis that we had during the COVID 19 pandemic. And I've not really heard in the five hearings we've had already on this how we are as a state factoring in that very different reality.

We talk kind of just Assemblymember Addis brought up the promotores, the health navigators. Those are very consequential and perhaps deserve kind of a heavier weighting. There's a very robust community based organization network out there already that is working with our immigrant communities.

One of the things that came up for us was that they have challenges being able to kind of integrate or be qualified as CBOs to receive the kind of data integrated or be included in the data integration that would potentially allow them to be activated in a way that they are poised to do, but that we are limited to be able to do right now?

So has there been any focus on how we are going to maximize our community based organizations that are the trusted organizations for many right now in making sure that they are situated to be able to really push forward with this kind of eligibility work.

So again I'll start with some details on the CalFresh side and then hand it over to my colleagues. So unfortunately, in parallel to changes related to the time limit, HR1 also introduces significant restrictions restrictions on CalFresh eligibility for lawfully present non citizens.

So beginning April 1st we will be required to implement limitations on who will be eligible for CalFresh and that primarily impacts humanitarian immigrants such as parolees, refugees, asylees and so on. And so April 1st forward at existing households, regularly scheduled recertifications. So over 12 months we will have to implement those rules.

And now there are certain people who remain eligible, primarily lawfully present residents, Cuban, Haitian immigrants and a small group of immigrants under what is called a compact of free association agreements. And the state funded California Food Assistance Program for lawfully present noncitizens who've been here for less than five years remains in place.

And so we still continue to work with our existing network of CBO partners, about 160 of them across the state through our formal CalFresh outreach program to get the word out about those changes to ensure that people who remain eligible know that so that they're not self selecting out of the program unnecessarily recognizing that there may be other reasons someone would want to do that, that network does include community based organizations with multilingual capacity or that you know, specifically serve certain ethnic communities in across California.

And so that remains in place to compound the challenge, their reimbursement funding from the feds will be reduced under HR1 from 50% to 25%. So I also want to recognize that even that existing network which has played such a key role in providing that one on one support, the application assistance is under pressure as well.

I didn't really hear a. I heard a description of the challenge. I didn't hear what we were going to do in response to a recognition of that challenge.

zero, I am. I'm sorry. Let me add that that network is doing targeted outreach to those communities as part of the coordinated campaign work that we discussed through philanthropic support with DHCs. Our client messaging research and the campaigns are both related to the ABOD time limit and the changes for noncitizens in CalFresh.

So we do have outreach campaigns in development and underway for those changes. They're two parallel changes at the same time, I think on the Medi Cal side.

Assemblymember Bonta, I think you may be referring to the ability for CBOs to see certain data elements in the Benefits Cal portal.

And I think the state does recognize with the introduction of kind of the new privacy rules, there is still a manual process for CBOs to be provisioned to allow them to go in and actually see certain client information. And the automation is currently kind of in the prioritization process.

However, I think specifically now that we have kind of the added kind of policy complexity with HR1 similar to how we had the Health Enrollment Navigators in the past. The plan is, you know, should the Legislature approve the budget requests for the Clinic Navigators, there will be all the kind of the privacy agreement signed.

So it will allow the Department to actually share the needed information to the CBOs directly. Very similar to how we've carried out the initiative a few years ago. So they can actually have more targeted outreach. Yeah, we understand that there is concerns in the community given the current kind of climate, both at the federal and state level.

And so as we were kind of thinking through how we're going to kind of implement the Clinic Navigators program, which more than likely we will have CBO participants similar to last time. It will be a requirement for them to you in terms of populations of focus for them to have very tailored messaging and assistance for this group.

But this is the initial thinking of the Department at this time.

And see my other comments about infrastructure development. Absolutely critical piece of the infrastructure. And so I am curious about when in the workflow or project pipeline that particular aspect is intended to in terms of the privacy MOU agreements when that is going to be a couple of things I think we will definitely follow up with you.

I don't have that in front of me in terms of the automation time timeline in the county system for the release of information. We can definitely follow up with you on that. We know it'll complement kind of the process for the HR1 work.

But I think just wanting to know, I think just in terms we understand from kind of the work, there's a pretty complex automation required for this to occur and we will have to make some choices from the implementation of the policies in the system. I think, however, that being said, we will take that back and follow up.

Yeah, I think also in terms of resource allocation, if we know that there's a decrease in the amount of reimbursement that they're getting through federal resources and we are making very tough decisions about where we're applying our infrastructure dollars to be able to support HR1.

If I had to give my dollar to a human at a CBO who's going to who is a frontliner and a bot to be able to send out two text messages, I know where my money, where I'd want my money to go.

I Sally, remember if I could give you an example of something we did in San Francisco when the as you know, the deadline for certain immigrants who have undocumented status to get on medi cal was December 31st of last year of 2025, we partnered with the Latino Task Force to do Medi Cal pop ups in the community through the entire of December.

This to your point about bots and technology and everything else, nothing can replace having county eligibility staff partnering, sitting at the same table with staff from community based organizations that are trusted in the Latino community in the Mission in San Francisco to break down that right, that mistrust. This is naturally among those communities.

And we enrolled literally 275 people in nine different pop ups because we were there on site. It's eligibility staff at the county level. It's that workforce and investment in that workforce that's going to move the needle on these populations. With all due respect, the bots and the technology, it helps.

But nothing replaces that direct contact in the community.

And then just my last question is a bit of also a reflection on what we heard over the last during our roundtables that we did across the state, there was some discussion around the overlap in the eligibility requirements for Medi Cal and calfresh and also the exemption requirements for Medi Cal and calfresh.

And at that time, which was only a couple months ago, there was still a lack of clarity around whether we could essentially use the lowest common denominator in terms of what the eligibility or exemption requirement would be. Is that something that has been worked out and is known?

Because when we were talking to people several months ago, it was still not known.

Yeah. So I can start. And Alexis, feel free to chime in. So I think at this time we have a more sophisticated understanding and the departments have actually worked, worked to do like a cross, like a matrix, an updated cross matrix based upon the exemption criteria for both CalFresh and Medi Cal.

I think in General, I think we recognize there's a different federal definition of certain exemptions, but I think in General we have an idea how to map the exemptions between the two programs. And given that we do, luckily for California, we share the system with our CalFresh partners.

We can leverage in a bidirectional way in the system in terms of the exemptions data, whether it's from the CalFresh application or the CalFresh recertification or from the Medi Cal Renewal Application, we have an ability in the system to be able to use it so that we're number one minimizing the additional paperwork and also the work necessary to kind of do do kind of the manual review.

However, it's not 100% just because of the difference in the federal rules. We can never align 100%. But I think we have done a more sophisticated mapping given that we now have a much more concrete understanding of certain pieces of HR1. But again, we don't have the full thing yet.

But I think we have a sophisticated understanding at this time.

zero, I will agree. I can make one example concrete to illustrate the work that we're doing. So Yunja mentioned that there's a category on the Medi Cal side related to medical frailty. We are working through an analysis to map that back to the CalFresh category, which I mentioned, which is certified as medically or physically unfit to work.

If we could get information from Medi Cal about the medical frailty, the worker identifies that and then the system maps it back to the corresponding CalFresh exemption, we can grant that exemption without additional engagement with the client.

So that's just one example of the type of work we're doing to take the information that they've used to process the application, map it back, and then to the extent possible, build that into the system's logic so that that one on one engagement doesn't have to happen.

And just finally, I wanted to thank Assemblymember Sharp Collins for the legislation that you are bringing Forward related to CalWorks eligibility. I think this exchange that you all had kind of certainly cemented the reality that we have the ability to ensure greater numbers of both eligibility for medi cal and CalFresh and also exemptions from these worker requirements.

If we pull on the levers that we do have around the other California based system. So if we keep more people enrolled in CalWORKS more consistently then it will allow them to be able to be exempt from the work requirements as they've been outlined.

And, and I think we should look for a lot more brilliant ideas like that in the Legislature.

Thank you Assembly or bosses. Those are great questions and leads me to a question about. Did you have another one? Please do, go right ahead.

I'm so sorry, I have one more because I know that we were talking about the exemptions and when you look at CalFresh that goes back into the.

From the incarcerated population and the one thing that I'm missing within the conversation is whether or not there is any coordinated outreach to individuals who are formerly incarcerated or any conversation with CDCR or any other entity in regards to, you know, in regards to the lack of services, knowing that individuals have 90 days for Medi Cal qualifications but there's no protections for accountfresh.

So I mean is there any coordinated efforts with, with the individuals or CDC or any other group in regards to making sure that folks know that their access to their social safety networks is, you know, is going to be impacted even further?

I mean they're already getting out, they already have some barriers against them already and this is just another layer. So just wondering is there any efforts?

Yeah, so thank you for your question. We've actually started the engagement with CDCR already.

We've actually gone and given the teams that are working with the incarcerated population that has Medi Cal or kind of in the pre release justice involved kind of initiative, certain presentations already and I think just to say on the Medi Cal side, on the health side, we have an ability to track these individuals using the coding in our system to number one to exempt them whether it be at application or in the renewal process.

And also if for some reason because given I think there's like a time limit for the incarceration exemption more than likely, I think because of the enhanced care management kind of care coordination, that group is also one of the populations of focus which as we were developing our analysis on whether those conditions meet the Medi Cal or the Medicaid medical frailty framework, it more than likely aligns.

So all to say, I think we have options in terms of looking at their exemptions and we have also kind of shared that with CDCR in our engagement with them and we, we know they're an important partner implementation partner and we'll continue to engage.

That was a great question. I thank my colleagues for all the really excellent questions and for the panelists for their great summary of the daunting challenge that we have. And the most important question I have is to meet this moment right Now. There is $20 million in the current General Fund that needs to be released.

Mr. Rohr spoke to that and we have a great sense of urgency around this panel. What is the status of that $20 million General Fund allocation has to be released by the Department of Finance to make it accessible, right?

Noel Falkadi, Department of Finance Yes. You're speaking to. There's a provision in the Budget ACT to release 20 million General Fund for to support the training for the able bodied adults without dependence rules. On the CalFresh side, the Administration is currently evaluating a plan and understands the urgency and hopes to have an update soon.

Well, it sounds like there is a plan. We had a lot of testimony about how extensive it is and how comprehensive it is and it sounds like it needs resources to be effective. And so I'm not sure what I'm hearing you have a plan and I'm hearing you're contemplating that plan. Let's what's the disconnect there?

And Mr. Rohr is nodding his head saying we need the money.

So there is a plan for the implementation of the abod rules. The 20 million is a, at the time of the Budget act, the ABOD guidance, the federal guidance was not released. So it was put in there to give the state greater flexibility.

And I think the purpose of the 20 million is and the kind of the structure of how to use that is separate from the ongoing rules implementation. And that's, that's what's currently being looked at by the Administration.

So the $20 million is being held back in anticipation of the federal guidance needing to be changed or something.

The 20 million would be additional above what is in the 2025 Budget act and it would. Sorry, Sorry. The intention is to, to support the counties in the implementation.

Hello. With the Department of Finance. So understand the committee's interest around the $20 million. As my colleague was. zero, sorry, I'll get a little closer. Lourdes Morales with the Department of Finance. Understand the committee's interest around the $20 million.

As my colleague was noting, the intention of those dollars when it was adopted as part of the 25 Budget act was as a contingency as the federal guidance was not available at that time around how HR1 would be implemented specifically around the ABOD provisions. We know that that guidance is now available and there's interest.

So we are evaluating and hope to have an Update for the Legislature soon.

How soon?

We understand the urgency sort of are working very quickly.

Okay. Well, urgency is probably not the right word to use the timelines that we talked about. I think the ABOD rules are going to be implemented by CalFresh in 79 days and so work has to be done. We need to get this money out there in the field.

The counties don't have the resources to do this work and we're facing catastrophic consequences. We've had long hearing that described all that. So I can't in enough, strong enough words emphasize the urgency of getting that $20 million going as fast as possible.

Thank you for being here to hear that and take that back to the Administration. And I suspect the, the request from Mr. Rohr about through the counties about additional $373 million. Is that the right number that you said, Mr. Rohr? Yes, in next year's budget is prime. Is of utmost importance too.

So I hear you.

I hope that Governor and the team are looking at those numbers as well and you know, would urge us to take action, early action to make sure that that funding is available to provide the continuity services.

All the amazing, you know, technological things that you're doing with the data screening to make sure people are exempt and retain their eligibility is really valuable and impressive.

But the hands on the ground community based organization work do the outreach that we've been working on for 10 years to develop systems to get, you know, CalFresh enrollment up to the 90% plus rate in San Francisco. I know it's not the case everywhere else. We have a lot of work to do.

And as Assemblymember Addis mentioned, you know, 94% of people in California being covered with insurance, you know, all of these things are at risk going dramatically backwards. And the state is in charge of trying to mitigate that as much as possible. This is our job. So thank you.

Yes. And sort of share that concern as well. I can indicate that we sort of met with CWDA this week. We will continue to have conversations with them, do understand their request.

We were also recently at the Sacramento county offices speaking to eligibility workers sort of learning about, you know, their day to day that the challenges they're anticipating and how they're rising to the moment. So we absolutely will consider that as we move forward.

The other sort of broader discussion on all these, as you all sort of understand, is the overall fiscal condition of the state as we sort of work to sort of manage and address this moment while also tackling the broader condition.

Yes. Of the state. We have a crisis today. But I do know as a former county supervisor, there is no way counties have the resources necessary to do this work. This is 10x the current status of funding and the state has a role and responsibility to help make this work. So thank you.

Any other questions or comments from colleagues? All right. Well, with that I think we're going to conclude this portion of the hearing. We have a number of people here in the public who'd like to speak, I'm sure, and we want to hear from you.

So please take this opportunity to tell the story that you want us to hear in as brief a fashion as you possibly can. It's important for the panelists, I think, to hear as well the community organizations that are on the ground in the field trying to solve this problem. Thank you. Come on up.

Good morning. Linda Way with Western center on Law and Poverty. Appreciate today's hearing and the focus on those who would most be who have the most to lose due to work requirements, including those who have behavioral health conditions, experiencing homelessness, those involved in the carceral system as well as the working poor.

We know that ample evidence shows that work requirements do not increase employment or wages. And so we do appreciate the administration's effort to protect coverage and targeted outreach.

We do urge the Administration and Legislature to not amplify federal harms by being more severe than HR1 demands by not applying work requirements to state funded immigrant populations who already will have difficulty both legal and logistical improving compliance even if they are working. We also urge reinstating, renewal, streamlining strategies that keep eligible people covered.

We also urge funding to trusted partners including the Health Consumer alliance that provides legal aid support to people to keep, maintain and actually access health coverage as well as a data dashboard to measure HR harm as well as adequate county staffing for these changes.

We urge the state backfill federal cuts by funding carrot benefits to ensure people keep their food benefits as well as we really think the time demands that the state step up and reverse the crude redistribution of wealth that HR1 gifted billionaires on the backs of low income Californians through progressive revenue solutions.

Thank you, thank you, thank you Mr.

Chair and Members. I'm Erin Evans on behalf of the county of Santa Clara. As the state and counties grapple with the impacts of HR1, we're highly concerned with the work requirements imposed on this new abode population. These new, excuse me, these are new barriers for vulnerable populations including justice involved and behavioral health clients.

Inevitably, these changes will harm our community Members and force difficult decisions between paying for rent or paying for food, paying for food or medication. At the end of the day, it's another attempt to reduce the number of people on CalFresh Medical and other services as folks lose benefits.

Funding and stability of county programs also weakens As a result of all of the changes of HR1 being implemented, the county of Santa Clara is at risk of losing a billion dollars annually.

Even with the passage of a local sales tax measure and $200 million in mid year cuts already made this year, the county anticipates a huge shortfall. We're seeking to partner with the state in a number of different ways.

You've had a very robust conversation this morning about all of the new eligibility work that is crucial that counties like ours will be taking on. And so to that end we strongly supporting eligibility work through the technological solutions that the Administration identified this morning as well as the funding requested by the County Welfare Directors Association.

We also support funding for public hospitals and county indigent programs as the same folks may lose medi cal coverage. Thanks.

Thank you.

Good morning Mr. Chair and Members. Tiffany White with SEIU California representing over 750,000 employees in particular here today on behalf of our eligibility workers. We had a robust conversation today and I appreciate you Mr. Chair for the discussion. And we just want to underscore the importance of our eligibility workers.

We've seen time and time again that our eligibility workers step up in a time of need to ensure that folks are stay enrolled and receiving services. This is just like the aca. It's like Covid. Our folks are the ones that are the backbone of our county to ensure that consumers are receiving their services.

So just appreciate the conversation, underscore the need to have a robust workforce to address these needs. We all know that folks are going to be in dire need not only on the CalFresh side, but that will lead to other things. As we all know the downstream effects of individuals losing their resources.

So underscore the need for eligibility and of course would like to uplift the utmost importance of getting that $20 million down to our counties.

Not only to help train and support the workforce that's currently there and to maintain the workforce currently there, but to also encourage and get new folks into the door so that we can help our communities. Thank you so much.

Thank you Ms. White. Appreciate you emphasizing the importance of eligibility workers. They are the front line of this effort. Thank you.

Kelly Brooks on behalf of the Urban Counties of California and the California association of Public Hospitals and Health Systems. We really appreciate you holding this hearing today and really diving in on the nitty gritty of the kinds of eligibility work that's going to be done both on the medical side and the calfresh side.

I think one of the things I would just underscore is that in many counties they have not had to do work requirements for the CalFresh population since pre the Great Recession, so 20 years and we've never had work requirements on the medical side. This is a vast change to the work that we do locally.

All of the resources that we're talking about are going to be so important to make sure people continue to have access to food and health care. I cannot underscore what a massive change this is and the kinds of training.

I think Mr. Rohrer did a great job talking about how long it takes to hire someone, get through the process and have them ready to speak to people one on one. This is just a massive change. Also just want to support the we're going to Counties are need funding for public hospitals and for county indigent programs.

Thank you again for having this hearing today.

Thank you. Thank you Mr. Chair Members Brendan McCarthy, on behalf of the California State Association of Counties appreciate the robust discussion about the need to invest in the county workforce to keep as many people as possible enrolled in CalFresh and Medi Cal with respect to the behavioral health issues that were discussed and addressed in the agenda.

Folks who do lose their Medi Cal may come to the counties for care. Under the Welfare and institution code section 17,000 obligations, counties are required to provide health care to individuals. But it is subsistence level care. It is not comprehensive, it does not mandate the coverage of behavioral health services.

And historically counties did not provide that through their indigent care programs. Despite the fact that these are such barebone programs, we still estimate that the cost to cover the people we anticipate losing Medi Cal to be somewhere between two and five and a half billion dollars per year.

All the funding that's previously supported those intelligent care programs was redirected for other purposes. So counties don't have funds to reestablish those programs. County behavioral health departments do provide care to folks who are not enrolled in Medi California but are mandated to do so only to the extent resources are available.

With the growth in cost of providing specialty mental health plus new initiatives like care and other activities, the pressure on those existing realignment funds is great and there's very limited resources to provide additional services to folks who seek care from the county.

So counties stand ready to provide services, but we need new revenues resources from the state to do so. We look forward to partnering with the Legislature and the Administration to make sure that that we provide the best care possible to folks who are going to lose their medi cal coverage. Thank you.

Thank you.

Hello. Michelle Givens with the County Health Executives Association of California representing local health departments throughout the state. Appreciate the dialogue here today. Want to echo the comments of my colleagues that came before me around indigent care programs.

It would also just amplify what Assemblymember Addis said around needing to engage with the Department and the Administration early to know what the plan is. These county indigent care programs are not easy to stand up overnight.

It's going to take an investment of infrastructure in a number of those counties, whether it's hiring the workforce or hiring or procuring IT systems, but getting our county systems ready to take on the population that could potentially return. That's going to take several months.

And we the time is the clock is ticking and we really need to know where we're going to land there. We are happy to engage on what that looks like. Also whether the state is looking at alternatives to maintain people in coverage.

But we do need to have a more robust dialogue and we also would encourage that to not be a surprise at the May revision as well. So thank you for your time and attention on this.

Thank you very much for coming today. Well, I think that concludes our hearing. I want to thank the amazing budget team staff that made this possible, Christian Griffith and Patrick Le and Nicole Vasquez.

It's really appreciate all of your work and thank you, Assemblymember Bonta, for being here for the whole hearing and my other colleagues who were able to come and contribute to this conversation. We have a lot of work to do, so have a great day.