Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services

Alright. Good morning. Welcome to budget subcommittee number three on health and human services. Hi. Some little young ones that we'll bore today for the next three and a half hours.

So our first portion of today's hearing is gonna be a follow-up conversation on the greater budget, panels around HR one impact. Following that, we're gonna stop for public comment based on just the HR one impacts and then continue with our agenda and then do public comment on the, remaining things on the agenda. Do public comment for that section. So it'll be two areas for public comment, one for HR one impacts, the second ones are the the rest things on the the other things on the agenda. All right.

Without further ado, if I can have all participants of my first panel come on up, please. This is where we're gonna be hearing a more in in-depth conversation on the overview of HR one and the impact on our our budget. We have our directors from both departments, LAO and the California, California Healthcare Foundation. Yeah, we could squeeze you in if you want. Where would you like to be? Do you need to be next to someone?

Yes. I do.

Okay. So we're gonna do a yeah. Sorry. It's okay. Everyone to the left. There you go. Okay. Before we get started, I know we have, Len here. Who's Len? Thank you so much for participating. You're not here on behalf of California Health Care for Notion. You just are an independent policy expert on this. Yeah. Just wanna clarify that. Perfect. Director, you may kick us off.

Good morning, care, and, committee staff. Michelle Baass, director of the Department of Health Care Medicare program. HR one was enacted, as you know, 07/04/2025 and imposes significant and devastating, requirements on the Medicaid program, including work and community engagement requirements, more frequent redeterminations of eligibility, reduced federal matching for certain populations, retroactive changes to coverage. The governor's budget, incorporates these requirements, in the caseload beginning in 26-27. With regard to the work and community engagement requirements, this provision requires most non exempt adults in the ACA, or the Affordable Care Act expansion population to meet work and community engagement standards to maintain medical eligibility.

The, estimated impact to general fund in 26-27 is a cost reduction of about a $102,400,000. Approximately 1,400,000 medical members, adults, upon full implementation, are projected to lose coverage. And for the budget year is, an estimated 233,000 individuals. In terms of the programmatic impact, we anticipate increased administrative workload for counties, higher risk of coverage gaps for vulnerable adults, and a potential, increase in Un Uninsured rates. With regard to the six month redetermination, again, this policy applies to the ACA adult expansion population and requires the redetermination of eligibility every six months instead of annually as it is today.

We estimate a cost reduction of about $74,000,000 general fund as a result of this in the budget year. Projected a loss of, coverage for about 289,000 individuals in the budget year, growing to about 400,000 upon full implementation. With regard to the provision with reduced Federal matching for emergency services for, unsatisfactory immigration status adults, this policy reduces the Federal matching rate from 90% to 50% for individuals who were previously covered under the ACA affordable care act expansion, but for their immigration status. Estimated cost of a $658,000,000 general fund in the budget year, growing to $872,000,000, in 29-30. HR one also amended, the the definition of who qualifies for Federally funded Medicaid, full scope Federally Fed Federally funded Medicaid.

This change goes into effect 10/01/2026. HR one narrows the definition of qualified noncitizens that remain eligible for federally funded Medi Cal. If the state were to provide, full scope coverage to this population, the projected, cost is $786,000,000 general fund in the budget year, growing to 1.5, $1,000,000,000 general fund ongoing. The governor's budget presumes, or proposes that the 200,000 individuals whose status will change will transition to restricted scope, Medi Cal as part of, the governor's budget. HR one also reduces retroactive coverage for Medi Cal.

Today, when an individual applies for Medi Cal, retroactive coverage could go back three months. Effective 01/01/2027, retroactive coverage is limited to one month for the ACA, optional expansion adults. Estimated cost reduction of $9,600,000 general fund in the budget year. There are also changes to state financing mechanisms or health care provider taxes and state directed payments. HR one and the related policies, restrict permissible structure and size of the health care related taxes, including our managed care organization tax and our health hospital quality assurance fee.

These changes really will will have a significant impact on the budget. And I know that there's a a a subcommittee hearing specifically on this topic in the future. The governor's budget assumes continued federal approval pursuant to the various transitions of the MCO tax through the end of the calendar year. So 12/31/2026. So that is what the budget assumed and we got quick, confirmation from the Federal Government that that is the case.

But these, these both of these, provider taxes and the HQAF are vital fundament, funding mechanisms for the Medi Cal program. With regard to actions taken to date and in the governor's January budget, we released an HR one implementation plan at the January. This outlines our strategy for implementing, particularly the eligibility and enrollment provisions of HR one outlining our policies, having links to our all county directors lever letters. Also acknowledging that we are still waiting future federal guidance particularly related to the work and community engagement, requirements. But the implementation, plan provides detailed guidance on how we plan to implement these changes, with the with the knowledge we have to date.

We had two all comer webinars at the February to review the implementation plan with our stakeholders. Over 2,000 individuals participated in these calls. As we've discussed previously in in, this committee, the guiding principles that we are using to really inform our implementation as we think about, implementing HR one is to automate to protect coverage, use state and federal and other data sources to verify eligibility whenever possible. We wanna reduce paperwork and the administrative burden for our members. Communicate with clarity and connection.

Deliver clear plain language information in all required languages, ensuring that our messages are culturally opo appropriate, and clear to members, families, and their caregivers. Simplify the renewal experience as we we are streamlining the Medi Cal renewal process with clear forms and simplified six month renewal steps to help keep members, enrolled. Educate and train those who serve medical members. Provide counties and or coverage ambassadors which were at about 7,000 to, now with training, practical tools and ongoing support to assist members effectively. Provide timely and transparent communication to our members, sharing updates through multiple channels so individuals have ample time to prepare for these upcoming, changes, and then streamlining processes and efficiency wherever possible.

The budget also includes up to $4,000,000 for our health enrollment navigators, to provide kind of that in clinic hands on assistance for member members with questions. And then, additional, $17,500,000 as part of a budget change proposal, which we'll go into in more detail detail later for an outreach campaign, for to to communicate with our members. We launched a text process, a text, text in February to really just start building awareness for the 4,600,000 members who would be it may be impacted by this. Just kind of this is more the information sharing them, directing them to resources. And then in the summer, we will take be launching more of a take action type of campaign.

With that, I, will happy to answer questions.

I'll go through with the panels first. Mhmm. Speakers.

Good morning. Jennifer Troia, director of the California Department of Social Services. As your agenda outlines, HR one makes extremely significant changes to federal funding and eligibility rules for CalFresh, which is California's implementation of the SNAP program. These changes will affect millions of Californians who rely on food assistance as a basic safety net. We have talked about this before and I will highlight again that we are approaching implementation with three commitments.

First, mitigating harm through timely decisions, guidance, and communications. Second, making evidence based data driven decisions. And third, maintaining transparency by engaging consistently with county partners and Californians who are recipients of the program. The governor's budget estimates that once HR one is fully implemented up to 553 individuals will lose CalFresh benefits. And by fiscal year 27-28 the annual reduction in benefits would reach $1,600,000,000. Those benefits are currently reflected in the federal budget.

Depending on the cost sharing, they may be partly related to the both the federal and state budgets in the out years. Consistent with your questions, I'm gonna focus today on two pieces. The expansion of the able-bodied adults without without dependence time limit rules and the department's work to improve CalFresh payment accuracy. I will just briefly mention though that the governor's budget does include funding to reflect the change as of 10/01/2026 to the administrative cost sharing between the Federal Government and the state government and counties. It's a reduction of the federal share from 50 to 25% and that it, means a $532,000,000 increase in our budget.

$383,000,000 of that is general fund. $150,000,000 is county funds. So first, focusing on the ABOD time limit. Under the federal rules, individuals who are identified as ABODs can receive CalFresh for only three months in a 36, 36 month period unless they qualify for an exemption, meet the worker community engagement requirements, or live in a county with a federal waiver. HR one keeps this structure, but significantly broadens who's subject to the time limit, and narrows who can be exempt from the time limit.

Specifically, HR one expands the ABOD age range to include adults up to age 64. Lowers the dependent child threshold from 18 to 14, and eliminates exemptions for people experiencing homelessness, former foster youth, and veterans. Exemptions remain for people with a child 14, people who are disabled or pregnant, those exempt from CalFresh work registration, those who are determined to be unfit for work, and that's a quote, and newly under HR one American Indians. HR one also significantly restricts the ability to qualify for waivers of these time limit rules. The waivers are now limited to counties with unemployment above 10%.

As a result, California has lost our statewide waiver and we now qualify for waivers in only seven counties. Statewide, there are about 2,700,000 Californians who are CalFresh recipients ages 18 to 64. Based on existing data, we estimate that roughly 1,800,000 of them or two thirds already qualify for exemptions. That leaves approximately 950,000 adults whose exemption status is unknown or who may become newly subject to the time limit. Of those, the governor's budget estimates that about a 110,000 will ultimately be determined exempt after screening.

About 179,000 will meet work or community engagement requirements. And approximately 665,000 may lose CalFresh eligibility at full implementation. California will begin implementing the time limit as of 06/01/2026. So we're a few months away. The federal rules that require exemption screening require those screenings to occur at application or recertification before the time limit can begin.

So most current recipients will be screened during their next regular recertification. So the implementation of the policy will essentially be staged over a twelve month period which also supports, the county workload being spread out. Our guidance emphasizes maximizing exemptions using available data. As I mentioned, we've already identified a significant number of people, almost two thirds who are exempt based on data we have. And we continue to look for additional data sources that we can use and rely on to for additional data sources that we can use and rely on to grow that number as much as possible.

Where data is not available, we are focused on conducting thorough screenings and engaging individuals who are not identified as exempt to help them connect with qualifying work or community engagement activities and to keep their benefits. We're expanding policy training, holding statewide part partner engagement sessions, maintaining regular coordination with DHCS and with other sister agencies and departments, creating toolkits, communications to support counties and clients through implementation. Finally, I'll note in response to your question that the CalFresh ABOD administrative funding is based on the estimated number of ABODs And the average time that counties reported needing to complete ABOD specific activities in a survey from a few years ago when we assessed the Cal for, CalFresh administrative funding methodology. So second item of focus is payment accuracy improvement, which, as we have discussed previously in, future years will have a significant impact on whether or not the state also has a percent of benefit cost share in the benefits which have historically been a 100% federally funded. As part of the 25-26 budget, the legislature approved one time investment of $20,000,000 general fund to improve CalFresh payment accuracy.

Under HR one, the state's payment error rate will determine whether the state shares in that, cost of benefits and what percent. So we're conducting both quantitative and qualitative analyses to understand the primary drivers of payment errors at a deep level. Early findings point to several key issues. Households not reporting income changes or not reporting them as extensively or accurately as needed. Inaccurate reporting of shelter expenses or counties not acting on available information in the case records.

While this work continues, we've already begun implementing some improvements that were clearly needed, including consent based income verification through a company called Truve, expanded use of the work number, which helps us to identify earnings across household members, and automation of a payment verification system to improve detection of unemployment and disability insurance income. As our analyses progress, we will prioritize among other solutions to help improve payment accuracy. In closing, I'll say the changes to CalFresh under HR one are far reaching and we expect them to have significant impacts on food security, health, and well-being for many Californians. We are fully committed to mitigating harm, to supporting counties, and to maintaining access to CalFresh wherever possible, while also preparing for the substantial impacts that we do still expect to see in the coming years.

Good morning. Will Owens with the legislative analyst office. So as you've heard already, HR one is expected to result in the disenrollment of a number of Californians from the Medi Cal program. And, many of these, individuals will likely not have access to other forms of insurance. So this will obviously, place, various pressures on other components of the, California's health care system.

And it's in this context that our office has been asked to present on 1991 realignment and county indigent health care programs. So I'll be speaking from a handout, which can also be found on our website. So my presentation will walk through at a high level, an overview of county's responsibilities with indigent care programs, how funding for these programs has changed over time, including with 1991 realignment, the current landscape of indigent care programs, and how they may be impacted by HR one. So first, counties have been responsible, for providing basic health care services to individuals with no other means of receiving care since the nineteen thirties, referred to as medically indigent individuals. This is found under welfare institutions code 17,000.

So the statute itself is fairly broad in defining what counties are responsible for, for caring for these individuals. But, the definition and kind of scope of this has been, defined by court decisions over time. So a couple of key components. First, that indigent care programs operate as programs largely of last resort. So individuals who are eligible for other health care programs would not be eligible or would not have to be served under indigent care programs.

Counties could also impose things like cost sharing for individuals who make above certain income thresholds. Counties are only required to but are not precluded from serving individuals with lawful resident status. And lastly, the programs themselves are only required to provide the basic care necessary to prevent serious harm, pain, or infection. So in effect, the minimum level of care required, by counties to serve indigent care programs is significantly less than what would be provided under Medi Cal. So on the funding for indigent care health programs, counties have always been primarily responsible for the cost of indigent care programs.

Though kind of beginning with the creation of the Medicaid program at the federal level, there has been some state support, to serve this population as well. However, in 1991, the legislature shifted a significant fiscal and programmatic responsibility for many of its health and human service programs, including indigent care programs from the state to the counties. This is what we refer to as 1991 realignment. So while county's responsibility for indigent care health remained largely the same, the funding structure for her for state support and how counties pay for that changed. So this shifted from state general fund support to counties receiving dedicated revenues, from a a portion of the sales tax and vehicle license fee to support engine care along with the other programs that got realigned.

So these revenues came to counties and through some complex formulas, they go to different kind of sub accounts that serve that provide different services and fund these different programs. We'll kind of be focusing on what's called the health sub account or health health care realignment funding. And counties were eligible to provide both public health services and county intergenerate care programs through this sub account. So this arrangement continued until around 2013, where in advance of the Affordable Care Act, the legislature passed AB 85. So what this did is obviously the ACA expanded coverage in Medi Cal.

So many of the individuals who were served by counties as uninsured gained insurance through Medi Cal and the ACA expansion. This had the effect of reduced dramatically reducing the number of individuals served by county indigent care programs resulting in potential savings for counties as they no longer had to, pay for the care for these individuals because they were seeking Medi Cal. So, what AB 85 did is it redirected a portion of county's health care realignment funding that was originally used for, indigent care to cover the, to offset state general fund cost for CalWORKs grants. And so you can see on page five of your handout a graph showing how the redirection has shifted funding over time. So counties, when, AB 85 was passed, they have two options for how they want that redirection to take place.

One is a kind of static amount, a static share of that health realignment funding gets redirected, via AB 85. The other kinda takes into account county health care costs and then depending on on kind of like a a formula there that gets a share of that redirected. So a couple different options and and that'll become important later. So the current landscape of county engine health care programs prior to the passage of ACA to kinda give you an idea of scope, there was an estimated about 850,000 individuals being served by county indigent care. So as more individuals have become, eligible for medical and caseload has declined, with both the ACA and other expansions the state has undergone, counties are estimating around 10,000 individuals are enrolled in indigent care currently.

So enrollment for indigent care can obviously counties have a lot of discretion, varies widely from county to county across the state. So many counties have broadened eligibility and the number of services offered by their indigent care program as case loads have declined over time. This would include things like increasing the income limit for individuals eligible for indigent care as well as providing access to certain specialty service above and beyond what is required under statute. So, as you have heard in this and other hearings, HR one will have a wide ranging impact, on on medical program. So, specifically, our office estimates that by 2030, nearly 2,000,000 individuals will be disenrolled from Medi Cal due to the new eligibility requirements.

This would effectively double the number of uninsured individuals if those individuals were unable to get coverage elsewhere. So many of these individuals may also have difficulty accessing other sources of coverage and therefore may seek care through county indigent health programs. So our office estimates that anywhere from potentially twenty to fifty percent of these newly uninsured individuals may enroll in county indigent health care programs to try to access services, which obviously would represent a significant increase across the state in the total number of individuals enrolled from around 10,000 to increases of anywhere from 400,000 to a million individuals. So following kind of going back to the redirection of AB 85, of health realignment funding, the counties have relied primarily on the remaining funding that they receive for this health realignment funding to support their public health services as well as any individuals who remain in county indigent care programs. So while counties are likely facing increasing cost for indigent care programs, the structure of the 8085 limits or in certain cases, precludes adjustments for cost increase to the indigent care program.

Effectively, this means that the realignment revenue is not necessarily responsive to increase in indigent care costs. So given that counties are using the majority of this realignment funding that's remaining to cover their public health responsibilities, counties are unlikely to have the resources required to meet the increased indigent health care costs without new or additional means of support. So counties have options to some options to mitigate cost increases for their indigent care program, as well as, seek potential, new revenue, but these have trade offs and limitations. So counties may choose to limit program eligibility and scope of their indigent care programs, ratcheting back, the services provided or eligibility to the kind of minimums required under statute and various court decisions. But that would represent, again, individuals covered under that program.

That kind of minimum program would have significantly less access to health care than they currently do under Medi Cal. Counties could also choose to utilize more of their health realignment funding for, in the increase in indigent care. But again, as counties primarily use this funding for public health services, that would put pressure on, the funding available for their public health, responsibilities. Lastly, counties may also choose to raise additional revenues, but kinda given requirements in the constitution, it makes it very difficult for counties to raise revenues that way without going to the voters and the general restrictions around increased revenues. With that, available to answer questions when the time comes.

Thanks, Will. Go ahead, sir.

Good morning. Len Finochio. I was contracted by the California Healthcare Foundation to write a paper on the issues that the state and counties will face. Many of which we'll discuss. And so I'll I'll reemphasize some of those and share some others.

There's a long history and evolution of state legislative action and county ordinances to create and operate programs to provide relief and support to the uninsured. The first act was in the early twentieth century, 1901, the California Pauper Act. And then statutory authority is in welfare and institutions code Section 17,000, first passed in 1937 and then amended in 1965 to its current language, giving counties primary responsibility for the uninsured. And the state and counties have a history of transferring responsibility for the uninsured programmatically or financially back and forth over several decades. In the decade before the Affordable Care Act, optional expansion of Medi Cal, California and its 58 counties had a confusing patchwork of programs to provide a range of services to the uninsured.

23 large counties continue to operate their medically indigent programs, though several have closed completely, including Los Angeles and Monterey Counties. The county medical service program remains operational for small and rural counties, of which there are 35. And many large county programs, while they remain operational with policies and provider contracts in place, they are largely dormant. Each large county's program is unique in its design and features. Eligibility requirements typically include household income, age, county residency, and ineligibility for Medi Cal or Medicare.

And while counties are not mandated to provide care for the undocumented, some counties do so. Benefits also vary widely ranging from primary care and preventive services only to extensive benefits including hospital inpatient care, pharmacy, behavioral health, and even dental services. County indigent programs, it should be mentioned, are not is not comprehensive insurance. The county medical services program for the 35 small counties, its eligibility requirements, benefits, and other program features are standardized across all those 35 counties. And since Congress passed the Affordable Care Act in 2010, the percentage of Californians without health insurance has dropped dramatically.

These changes led to dramatic growth in coverage for Californians with lower incomes. Medi Cal Enrollment has grown from 8,400,000 in 2013 to just under 15,000,000 today. And covered California insures 2,000,000 people. Leading up to the expansion of Medi Cal in 2014, 54 counties participated in the low income health program, which is a part of the 2010 bridge to reform 1115 demonstration waiver. County LIHP programs, as they were called, provided a core set of benefits to some 650 uninsured, 650,000 uninsured Californians who then transitioned into Medi Cal in January 2014.

These LIHP programs did not include undocumented Californians. Since 2014, California has made a commitment to achieving universal coverage. The legislature and governor have systematically expanded Medi Cal to all eligible Californians regardless of immigration status. This move this has moved many uninsured Californians, as Will mentioned, out of county indigent programs and into Medi Cal. Starting in 2016, Medi Cal has expanded to all eligible Californians in four age groups up until 20- 2024.

The total number of Californians with unsatisfactory immigration status covered by Medi Cal across all age groups is 2,200,000. And how will coverage losses impact counties? So UC Berkeley and UCLA project a total of nearly 3,000,000 medical enrollees will lose coverage due to HR one restrictions by 2028. Just in LA alone, that's 1,100,000 folks will lose Medi Cal Coverage. Many of these newly uninsured will seek care with county indigent programs, and their costs for care will shift from state and the Federal Government to counties.

In addition, community health centers will lose revenue as patients move off Medi Cal and onto a sliding fee scale. Hospitals will see emergency department use increase along with increases in uncompensated care as Medi Cal revenues decline. The California State Association of Counties estimated the number of people and cost to provide health care through indigent care programs to individuals who lose Medi Cal due to HR one restrictions. The anticipated enrollment ranges from 417,000 to 1,300,000, and the anticipated cost between 2 and $5,500,000,000 per year. And how are counties preparing?

While most indigent care programs are dormant with little enrollment and have dismantled or significantly reduced their service delivery infrastructure, including provider contracts, many are beginning to, begin their planning process for what is ahead. Boards of supervisors, their program leaders, and CMSP governing board will have to assess the implications of increasing numbers of uninsured on the following. Their requirement, their eligibility requirements, notably household income and ages. Benefits to provide, either limited, moderate, or extensive, or perhaps maintaining a Medi Cal benefit structure. And they will have to assess how to provide services addressing the social determinants of health that Medi Cal currently provides through its CalAIM initiatives.

Counties will also have to consider including those who are undocumented, revisiting provider contracts and reimbursement rates, leveraging existing Medi Cal provider networks, adding new FTEs to staff their expanding programs, and impacts on other county staff programs and infrastructure, and new ordinances to adapt their program features. I have not done a methodological assessment of county preparedness, but I have a few county actions to share, and I know you'll hear from counties later in another panel. In December, the Sacramento Department of Health Services presented to the Board of Supervisors the estimates of enrollment and costs using different income eligibility thresholds to prepare them to take future action. In San Luis Obispo County, the board is being asked to choose between three structural paths for their MIA program or medically indigent program. It could transition to the county medical services program for small counties.

It could leverage the county's Medicare Medi Cal managed care plan administered by Sen Cal or continue its current program with some adaptations. The Placer County Board of Supervisors has proposed to the CMSP governing board that it join that program. And I'll finish with the issues that I raised in the paper that I wrote that all of us have to consider as we go forward. Issue one, what values and goals should frame the discussions and decision making? Should every income eligible uninsured Californian, regardless of immigration status, receive full scope medical coverage?

Or would a more limited set of benefits suffice? How do the state and counties assure equity in the delivery, delivery of services across a patchwork of county programs? Issue two, how should these healthcare services be governed? Should sec, section 17,000 of the welfare and institutions code be amended to address the shared responsibility for the medically indigent between the state and counties? Issue three, how should a program for this population be structured?

Should it be modeled on a program with standardized features such as CMSP or the pre ACA low income health program? And how should Medi Cal managed the Medi Cal managed care infrastructure and provider networks be leveraged to continue delivering and organizing care? Issue four, how will establishing or adapting programs for the uninsured minimize negative impacts on those who transition out of Medi Cal? How can continuity of care be guaranteed, particularly for the most vulnerable? And issue five, how should these health care services be financed?

Will this be yet another traditional realignment of limited state resources to counties? Or should it be something more innovative such as requiring employer financial participation?

That's it.

Great. You ended on my favorite topic. Okay. Let's, let's get into it. I'll start with you, Will. Do does all do all counties receive funding for indigent care?

Yes. All counties receive, a health realignment revenue, in which they use that funding for indigent care or public health. Is that kind of what that bucket of money can be used for?

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

I'd have to get back to you on some of the specifics of the pre nine or the post '91 realignment. But from my understanding, most not all counties operated indigent care in some capacity.

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

No. Counties are required to provide indigent care.

It's up to them if they wanna use it from this fund or not?

They are eligible to use it from this fund or this fund can only be used for indigent care or public health services. Counties can also choose to supplement that with additional resources if they want. But following again the ACA and the expansion, then case load for indigent care population for a case for indigent care population has dropped dramatically with some counties having no enrollment today. And and in other cases, because of the case was so low, counties ended up expanding the who is eligible for indigent care programs as well as the services offered.

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

Yes. So the as I mentioned, the the statute is actually fairly broad and not very specific and it's been over court decisions over many years in which kind of what is required for counties to provide under engine care has kind of been refined a little bit. But even then, it's it is a little a little nebulous. It's not strictly defined but it's very much seen the level of service required is much lower than what is offered by Medi Cal, for example.

So there is scenarios where one county could have the ability to restrict it so drastically that there's only a small population that'd be eligible for it?

Potentially.

And what would be the difference between that and EMTALA? Does anyone like

I think EMTALA is a responsibility on the hospitals and so hospitals have to provide that care and they may not get reimbursed.

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

The the it's just the people showing up at the hospital. And so the hospital has to provide that care and that that it could be kind of the way a person gets the services they need.

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

So the funding for 1991 realignment is a portion of sales tax and vehicle license fee. So as that revenue grows, it flows through the different buckets. So it increases over time generally. And so what you see with AB 85 following 2013 is both a portion of the kinda not to get into too many details of the funding flows of realignment, but a portion of the amount that counties get as what you'd consider like a base amount, as well as a portion of what's growth, which is above the revenue received above what was they received the prior year. That is being redirected to offset state general fund cost and CalWORKs grants.

So if you look at the graph in effect, while the total amount for absent AB 85 has grown over time, That that kind of growth is much lower for the health realignment, the health sub account with the AB 85 redirection because it not only again shrinks the amount that counties get every year, but also limits the amount of revenue growth that then can be used for indigent care programs.

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

Yeah. So counties, as I mentioned are they're able to use that health sub account, that health realignment funding, for both indigent care and public health services. So, as county's, indigent care, responsibilities or rather their caseload has declined, their their amount of funds they need to spend on indigent care programs has also declined. So that remaining amount that's in the health sub account would then be used for public health.

Okay. Both of you shared numbers. I'm trying to find if about 2,200,000 people are gonna lose Medi Cal. But indigent care will maybe only jump to 1,000,000. Where the other 1,200,000?

So obviously, when it comes to, projecting the number of individuals disenrolled and and from Medi Cal under HR one's highly uncertain. There's a lot a lot of variabilities in there, you know, including the state's efforts to exempt individuals from those requirements from those eligibility requirements. Right? So there's some uncertainty there. A second layer of uncertainty is how many of these individuals will then receive care accounting indigent health care programs.

What's a little tricky is that because it's a program of last resort, if individuals are eligible for Medi Cal, they would be ineligible for county indigent care programs. And so what that in effect means is if individuals lose coverage due to something like, what we'd consider administrative burden, not filling paperwork correctly, dropping off that way, but they are otherwise eligible, counties would not necessarily be required to serve them under indigent care. So it's not and the individuals who may be also drop off from Medi Cal for any of the other eligibility requirement reasons could be a somewhat healthier population. Maybe they don't necessarily seek care for with counties for indigent care. And again, county indigent care isn't necessarily like a, like a health insurance coverage piece.

A lot of counties have maybe, for example, like time limited benefits where an individual experiences a medical incident, they go to seek indigent care, they're deemed eligible for a period of a few months while they receive treatment, and then are no longer enrolled in county indigent care. So there's a lot of kind of uncertainty in moving parts when it comes to the number of individuals enrolled in any one time for county care programs. And I think that maybe where some of the numbers can get a little difficult to pinpoint.

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

Alexis Fernandez Garcia with the Department of Social Services. So, the exemptions that are available are not specific to age. They would be available to everyone between the ages of 18 and 64. Those are, if, helpful to repeat them, that the person is a parent or primary caregiver of a dependent child under age 14, that they are pregnant. That they self identify as American Indian or Alaska Native. They are exempt from a separate set of rules called CalFresh work registration.

I thought the, the American native Indian was no longer an exempt. It's a new addition under HR one.

So it was the one new exemption category under HR one. Got it. Whereas, it mostly eliminated other exemption categories. So exempt under these rules called work registration. And there's a whole list there, but they're very similar. Okay. If you're

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

Well, they could qualify for any.

More, more than likely. More common. More common. Yeah.

Medically certified as physically or mentally unfit to work, even if that is temporary. So you could have a permanent disability, or you could have something like, an application or receipt receipt of a temporary or permanent disability benefit, you could be what we call obviously unfit for work. And so that is dependent on an eligibility worker's assessment that you are facing barriers that would keep you from working. So things like the experience of chronic homelessness, having struggles with drug or alcohol, experiencing domestic violence. Other kind of temporary I mean, this is a common example we talk about.

Like, the worker would see that someone's arm is broken, And so would say, hey, you are eligible for this temporary exemption based on my assessment as an eligibility worker. The second is that you could be determined physically or mentally unfit to work, in quotes, by a medical or other personnel deemed appropriate. So a social worker, a medical professional. This overlaps often with, the conversations we have around the term medical frailty on the, Medi Cal side. So that's the the list. I'll just

If because some senior before, sorry director. Some seniors don't wait to what is it? A 64, 65 to claim, their social security. They do it at 62. Mhmm. So you have the two year gap. Would that exempt them if they start collecting their social?

Not at a disability benefit.

It's only in disability. Not even So you're like, hey, I retired. I no longer have this my static income. They have to now proves 80 hours of volunteer or something. Yes. Correct.

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

So if 62 year olds are like I'm tapping out three years early. They're on CalFresh. They now are gonna be limited to three months within a 36 month period.

Unless they meet those other exemption criteria.

If they don't mean anything else. And I will just add that we saw a disproportionate of the total people now having their benefits at risk under HR one, we saw a disproportionate increase in that age group because they are less likely to have a child in the home 14. And so that is a large portion of the people who are newly subject to the rule under HR one.

I know this is gonna be part of a later conversation in today's hearing. But I'd like to ask it now. In that age group, how does that then impact, the CalFresh minimum pilot we had that impacts older seniors? Are some of those now gonna stop getting that increase or

So, there is the minimum nutrition benefit pilot program. And that is tied to another group of people in the elderly simplified application project, which has been, in place for several years and played a key role in the number of older adults that we've served and their retention. So they've stayed on the program for a very long time. They now are subject to the time limit. What is unique about that population is they have very long certification periods, up to three years.

And so when their certification period comes up, which could be anywhere from one month after June 1 to 35 months after June 1. At that time, we will first offer them an exemption screening and do everything we can to explore possible exemptions. If that is not something they're eligible for, then we would keep them on the elderly simplified application, but have to apply the time limit rules. The minimum nutrition benefit pilot will not last that full 36 months. So some may lose connection to the pilot, others may not because they won't have that exemption screening until much further out.

If someone's three year verification lands within the next six months, that's where? Yeah. Okay. For both departments, can you talk to me how we're gonna capture those on domestic work? House cleaners, childcare workers from our med account and CalFresh. They pay get paid cash. Mhmm. How do you

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

Oh, no. You

Right.

A sworn statement that you

My own affidavit.

My I'm self attesting.

Okay.

I I I might need a little bit more than that. So I'm a house cleaner. Mhmm. I clean four different homes. I so gotta pile all that income together. I need an affidavit from the homeowner of all

Essentially.

That I clean this and this is the amount I get if I get paid cash. Okay.

And if I can add one of the things that we're doing in our payment accuracy efforts, is, creating a the new a new tool. I mentioned it. It's a company called Trove. And it allows for an easing of the income verification. So with consent of the participant, we can actually, access temporarily for the purposes of verification their bank account records that, provide that on a much more reliable basis so that it's not if you don't have a payroll system, so we use like the work number where there are payroll systems to verify employment.

But if you're not working through a payroll system and we are trying to verify regular income that you receive, we can do that better through your bank account. So for folks who give us consent to access their bank accounts, we can then hand them a statement that says, this is what it looks like you are regularly earning. Does this look correct? If it does, you sign that and that's what verifies your income. So we hope that will be a significant improvement.

How Are you applying that same approach to the UIS population?

It's across the board.

That's correct. That that self app

On the bank that is that?

Is the same across all populations.

For the UIS population though, you have even more, you know, banks. You know, like, I don't wanna be on the record for anything. It's all cash. It's in a shoebox under my bed. And then, I mean, those people and then the homeless. I thought I brought this up last time. Can you share a little bit more about how we're also tracking for I think that's gonna be the largest population that's gonna fall off.

So under HR one, we mentioned in our, talking points that, the exemption that existed prior related to people who were experiencing homelessness no longer exists. Under that exemption, just that experience and the information in the file that you are homeless would have qualified you for an exemption. After HR one, it's a little bit more complex. What we have to do is consider the barriers to employment and to work that the experience of homelessness has created for the individual. So under that category of obvious unfitness to work and the process by which the eligibility worker makes that determination, they will have to engage in a discussion with the person to explore whether the experience of homelessness is what is keeping them from work.

If we can, make that determination documented in the case record, there is no verification that would be needed, then the worker can apply that exemption. So while there are some restrictions under HR one, we still have some flexibility that existed prior, to explore that with the person.

Okay. And that would apply for both?

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

So the goal really is to make sure that, these individuals have, you know, the touches and the assistance with getting their medical frailty captured as part of their application. And then also ideally through the billing and service data that we can get through care provided to them that we can then use automatically to exempt them.

Okay.

If I could just add for a moment as we were talking about earlier trying to maximize I think DHCS refers to it as ex parte. We're talking about using existing data wherever possible to identify exemptions. We are also having very collaborative conversations about how to do that as much as possible in a bidirectional way. So there is, under HR one, if someone is exempt from CalFresh or CalWORKs work requirements, they are exempt from the medical requirements. It does not work the same in the other direction under HR one.

However, to the extent that DHCS has data that has identified medical frailty that may very well overlap with the unfitness to work criteria in CalFresh. And so we will try

to in the middle of this also? Yeah.

We will be using DDS data for sure.

And just to kind of double click on that. So if Cal's, if CalFresh determines that a person is not eligible or does not need to meet the work requirements, we use that. So including that homeless determination.

You should double work on that. Yeah. Okay. Going back to the UIS population and the application of the work requirements. Specifically in the undocumented within the UIS population. They would have to certify that they are working with an attestation.

So the the attestation would allow them to certify that they have an an income above the minimum income level, which doesn't necessarily mean working per se. But it enables us to exempt them or that they are satisfying any of the other community engagement requirements such as education or community service. They can self attest that way.

Not to exempt them. It's the worker requirements.

Okay.

That's for compliance. Yeah.

Just that they meet the requirement.

Yeah. So is there gonna be Is there a scenario like they Do they have to submit like where they work or anything like that?

It's that they have income.

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

Correct. The the affidavit bit is really, kind of a a checkbox type of document. Okay.

On MCO tax director, that's a lot of lost revenue post November post December which I'm glad we got those extra six months. Are there any creative ways in supplement or

So so we are working through that right now. Thinking about, what are the options? What are, you know, avenues to, you know. I think we've talked about before net revenue to the medical program as a result of MC over the last few years has been about $7,000,000,000 under HR one and prop 35 really that goes down to $6,000,000.

And so significant loss in revenue. And we are, working through options, and kind of trying to think creatively for sure.

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

So it's a little difficult to say that based on kind of research that's been done in other states where they've had kind of similar work requirements. It's kinda it's very difficult to kinda parse out the difference between administrative burden disenrollments and disenrollments from individuals who just do not meet the work requirements, period. It's kinda hard to in our estimates, we we try to account for that somewhat, but I would have to say it's it's pretty highly uncertain to be able to distinguish the the two of those and not a lot of great data is available on that.

Okay. Yeah. I have not seen good data on that yet either.

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

So the the big issue with the eligibility requirements that are being acted is they'll likely have an outsized impact on the ACA expansion population, which is, you know, is 90% covered by the Federal Government. So for every individual who is eligible for Medi Cal and ACA that gets disenrolled, it has a minor savings to the state, right, in terms of lower general fund cost. But then, obviously, 90% of that individual's cost of care is being saved by the Federal Government. So we released our assessment of the the Medi Cal analysis and we kind of talk a little bit about that overall disenrollment effect and I would flag as well in a report that we released last year. We kind of dug into a little bit more some of the knock on effects that you've kind of heard about in this hearing and previous hearings in two other areas of the California health care sector, whether it's hospitals, counties, clinics.

Basically, any any provider or entity that receives reimbursement for medical for individuals would likely be impacted financially by this disenrollment.

On the CalFresh side, we estimate the total reduction in benefits. It went in 2728 to be $1,600,000,000. As I mentioned before though, the benefits are currently a 100% federally funded and then in the future it depends on our payment error rate. On the administrative funding side, there are, some savings to the state for the disenrollment of individuals. But the total administrative funding is about $3,000,000,000 a year from all fund sources versus the benefits which are about $13,000,000,000 a year.

And we have some numbers too. This does not include the changes in the state financing mechanisms. But in terms of the eligibility and enrollment changes that we've talked about in the budget year, a loss of about $832,000,000 in federal dollars and growing to about $13,000,000,000 in out years. But then there is additional dollars on top of that related to the state financing mechanisms that we we're really not able to quantify at this point.

Okay. And I brought this briefly up in the bigger budget hearing around a lot of these it's creating savings for the state. So we're we work against each other if we get people back on because then we don't have those savings. Anything more you can share of like the fire under our bums to still be able to do this knowing that we removed the savings and further increase the structural deficit. What's the incentive for departments?

I would say on the CalFresh side, I mean, we are extremely committed to make people maintaining benefits for the benefit of the safety net, for the food security, for the well-being of Californians. That's why we're here. That's why we do these jobs, and we're deeply committed to it. And we know that our county partners on the ground are as well. So I think that sort of moral commitment is very real, and not to be underestimated.

And then again, I would emphasize on the fiscal side two things. One is that the, administrative costs are very small in comparison to the benefit costs for the CalFresh program. And there is a significant economic benefit to California of receiving those benefits. So the tax receipts we get from the groceries that are bought, the multiplier effect is profound and well documented. So we have an overall financial incentive to receive that very high federal match for the benefits regardless of any more much smaller changes in the administrative funding.

And then the final thing I'll mention is that because it is an entitlement program, the budget does adjust with the caseload adjustments. So those administrative costs, I know our county colleagues, often have concern about the timing of those adjustments in terms of their planning for staffing. But to the extent that the caseload comes in higher, we do fund that higher caseload in terms of the admin. So at at the end of the day, we wanna get as many people who are eligible continuing to be enrolled, and we will fund the administrative funding.

And similarly, we share the moral commitment. We work at the Department of Healthcare Services. And so while we recognize that reduced caseload does represent savings to the budget, we are taking every step we can to mitigate harm to our members as a result of the changes in HR 1.

So one illustrative example where I think the state budget and the moral commitment align really is work requirements because they particularly impact the Affordable Care Act expansion population, which has a 90% federal match rate. The estimates that you heard today about the 2.2 million members expected to lose coverage as a result of HR 1.

We're actively working to try to do better and bring those numbers down. I think the medical frailty exemption in the work requirements policy was still in development when the governor's budget was released. So we hope to be able to share those updated numbers through May Revise, which should show ideally less disenrollment.

What that means is that there's, you know, while there would be some more General Fund expenditures for those members that we're retaining coverage for, that also brings significant amounts of federal funding as well, which on the balance helps offset some of the impact to county indigent medical care programs.

And I'll just add that of those being disenrolled, they are gonna end up in their county system mostly episodically at first. And they're entering this patch work of different systems across the counties in terms of eligibility, benefits, funding, and so on. And so there's an enormous equity issue of what they will receive after they lose their Medi-Cal benefits depending on where they live.

And then just to kind of wrap things up. Yes, there is like a, there is a slight state savings for individuals disenrolled. But as stated, there are other costs within HR 1 for the state, namely around provider taxes that result in a net increase in state costs due to the effects of HR 1. And then any individuals while disenrolled from the Medi-Cal program, they would, you know, they would still require health care in certain settings and that would increase cost throughout the rest of the system as well.

And a good segue into my last question as we're teeing up panel two. I'd love to if the department would give their response before we hear from the counties. There's no additional funding for counties and increased load that they're about to have while this indigent care has continued to flow down and the other revenues depending on those two funds fluctuate and could increase.

It's a lot more they're gonna be doing. And I think I asked this question also, you know, Director Stephenshaw mentioned about the guidance and support. I'd love to give you an opportunity to share your perspective on this before we hear from counties. On your stance on like, do you, do you believe that they're ready to go, they have the support needed with all these changes? Yeah.

So I'll say a few things and then, Alexis, please feel free to add. So first I will say I do wanna clarify that we do provide funding related to the implementation of the ABAWD time limit. I think the counties are disagreeing with us about the amount of that funding. So we assume that it takes a certain amount of time to screen individuals.

They believe it will take longer. So we are having those meetings and conversations but and continuing to sort of unpack those details together with them. And if there are any updates, we would provide them in the May Revision. So I just want to provide that clarity. Second, I want to just acknowledge that this is an enormous lift.

We, it's been many, many years since we've implemented the ABAWD time limit, much less implemented it on a statewide basis and for people who are experiencing this level of vulnerability. So we are doing a lot to work with the counties in preparation in terms of the guidance we're releasing, the work groups with community members and with counties, the communications we're planning.

It is an all hands on deck on our part and on the county's part to prepare, but I also don't wanna underestimate that it is very difficult to feel ready. I will also emphasize that we are implementing, as of June 1, because that is the time it takes to automate the implementation.

And I will acknowledge that many other states have gone before us in implementation and that we have taken the time that we believe is necessary to implement on a consistent basis and with the automation that is required. And then also acknowledge that the, as I was describing, most individuals will receive that screening over a twelve month period. So it does also give us some time as we ramp up to full implementation.

And Director, to that, the first point you mentioned, has someone from the state gone to different counties and done that to like, how did we get to that number?

We have not really been implementing the ABAWD time limit in a really long time. So it is hard to say. But a few years ago, we did a reassessment of the CalFresh administrative funding that was required by the legislature. It resulted in a significant increase in CalFresh administrative funding. And one of the things that we did in that process was survey the counties on the time it takes to complete certain tasks.

That included screening for ABAWD time limit for individuals who are eligible. Though again, the counties were not implementing at the time in significant, in any significant portion. So I think part of what they are expressing and you'll probably hear from them is that they believe that that survey is not as recent or as helpful as it could be in identifying the workload for this implementation.

That said, the rules of the ABAWD time limit itself have not changed. It's who it applies to that is dramatically changed. And given that, we are asking them to conduct thorough screenings to try to really dig in and identify as many exemptions as possible and that process is admittedly complex. So I think that's some of what they're pointing out to us.

Thank you.

In terms of county readiness, I think we're using a lot of the lessons that we learned through the public health emergency unwinding redetermination process and the, you know, the significant engagement. I think we visited every single county during that process to really, on the ground, hear how things were going and plan to do that again as part of HR 1 implementation.

As we noted in the governor's budget, we did not have a proposal to fund county admin in governor's budget, but we are working with them and really, as Tyler noted, continuing to refine our numbers in terms of how many individuals may be automatically exempted or, you know, we can use the data to satisfy kind of meeting the work requirements.

And so continuing to refine our numbers, continuing to talk to the counties about what this new workload is and what it might take. And so those conversations are ongoing. And then in terms of county readiness for indigent care, this is, there's a lot transitioning.

There are a lot of changes in the Medi-Cal space, not only because of HR 1, but because of some of the 2025 budget actions as well. And so continue to work on that with our counties. I know it's a broader conversation beyond the Department of Health Care Services and just what does county indigent health mean, and given the state's fiscal constraints in the out years, how to think about that as well.

Doctor, I'm gonna give you the last words here. You provided some options that counties can look at or will be looking at. I don't know if any of, in any of your work, there can be an assumption on what you anticipate maybe in a what counties most likely would be doing?

What they will be doing or what I would like them to do?

You can give me both.

I mean, I think it would be the status quo. So they each have their programs, they do it differently, they have the money that they have. And so it's gonna be dispatch work across the state except for those 35 in rural North. I would like to see a standardized program administered in a standardized way perhaps between the state and the counties with a standard benefit package.

Where you use the Medi-Cal Managed Care network of providers to organize and deliver the services. So if you are in Medi-Cal now, you lose your enrollment, you move on to a county uninsured program that looks largely like Medi-Cal. I know that's really dreaming big, but that would be ideal and address some of the equity issues that I raised in my paper.

Thank you so much. I appreciate y'all. Alright, moving on to panel two. We're now gonna hear from the county programs. Our, we were mindful to ensure we got large counties, small counties, rural counties, geographically diverse counties to get a diverse perspective of how this will impact all types of counties.

So we're gonna start with LA County. We have two speakers from LA County, and then we'll go to Santa Clara, and then we'll go to Tulare County, and then end with San Bernardino, San Bernardino. Hi, Director. Yeah.

Good afternoon, Chair Menjivar. I'm Jackie Contreras... Oh. Is it on? Okay. Good afternoon, Chair Menjivar. I'm Jackie Contreras, the Director of the Los Angeles County Department of Public Social Services. We proudly serve the largest county in California, and we are committed to keeping our fellow Angelenos connected to food assistance and health care coverage.

If we cannot, we will see an unsettling increase in the kind of outcomes we are all dedicated to mitigating. The starkest example of setbacks would occur around homelessness, which could reach new heights in LA County because more people would be forced to choose between paying for food over rent. And because the resources currently available through Medi-Cal Managed Care would be inaccessible to many who would lose coverage.

Without the release of the $20 million for CalFresh eligibility in the current year, and the CWDA requested $373 million investment for CalFresh and Medi-Cal eligibility workers in this budget, we will bear witness to significant distress as a consequence of inaction, a painful setback for the progress we have collectively made.

Moreover, the unmitigated impacts of HR 1 will be disproportionately felt by LA County residents. By example, we represent 32% of all Medi-Cal enrollees statewide who will require manual verification or exemption, and you heard earlier from the departments how involved that process is.

More than a quarter of a million CalFresh recipients will now be subject to work requirements, including 81,000 unhoused individuals in LA alone. And 32% of all statewide humanitarian immigrants and refugees who will lose their CalFresh imminently reside in LA County.

All this considered, we are taking a whole of government approach to harm prevention in the face of these devastating impacts, launching an intergovernmental implementation effort in close coordination with county departments, community based partners, school districts and municipalities, and the private and philanthropic sectors, as well as those we serve.

Our Keep Your Benefits online outreach campaign has already generated over 8.6 million views. We are expanding on existing partnerships with local managed care plans to support outreach to shared members as well as to help identify and develop work and community engagement opportunities.

We are also working closely with the CalSAWS consortium to improve identification of migrant and seasonal farm workers and prioritize program updates to student attendance screens to better capture qualifying hours. To support compliance with work requirements for those not exempt.

We are developing a centralized user friendly portal and application platform that connects Medi-Cal and CalFresh customers to work, volunteer, and community engagement opportunities in real time and reduces the paper chase for participants and county staff alike.

Leveraging technology is a key aspect of our approach, and it is not a panacea. To navigate and manage these new changes, it is essential that we invest in our county eligibility workforce. We have approximately 6,800 eligibility workers that are highly skilled and committed, and they will need ongoing training and support to implement these new complex provisions.

They will also need help. With the massive workload increase, we estimate that an additional 750 eligibility workers will be needed. Given it takes up to nine months to hire and train an eligibility worker, we already are behind. I urge the administration to release the 20 million to support counties to implement the CalFresh changes that are just ten weeks away.

And please support the 373 million investment CWDA is advocating for to add more CalFresh and Medi-Cal eligibility workers in this budget to keep those we serve connected to life saving benefits. I wanna thank you for your leadership and partnership. It is critical in helping us find effective, compassionate pathways forward to effectively and equitably serve our neighbors across California.

Chair Menjivar and Members of the Subcommittee, thank you so much for holding this hearing. My name is Jorge Orozco, and I am the CEO of Los Angeles General Medical Center. Today, I wanna speak to what HR 1 means for Los Angeles County's safety net.

LA Health Services is one of the largest public health systems in the country. We operate four of the county's busiest hospitals, a network of health centers, two of the region's level one trauma centers, and our 911 and emergency services, and provide care in some of the most medically vulnerable communities in Los Angeles County.

We are the first stop for major emergencies in this county. When there are mass casualty events, serious trauma, or a public health emergency, our system is there. Each year, we provide more than 2.2 million patient visits, and about 80% of our patients rely on Medi-Cal. I want to emphasize this point. More than 80% of our patients rely on Medi-Cal. That is the highest percentage of any hospital system in California.

Therefore, the impact of HR 1 is disproportionately felt by LA Health Services. We are facing an unprecedented challenge. The costs of healthcare are shifting without a clear answer of who is expected to take on these costs. We expect 660,000 people in Los Angeles County will lose Medi-Cal, but they will not stop needing healthcare. They will still come to our emergency rooms for everything from routine illness to life threatening conditions.

And safety net hospital systems like ours will be forced to absorb those costs. The greatest harm will fall on working class, working poor, senior, unhoused, and other vulnerable Californians who are already most at risk and have fewer resources and options for care.

That pressure will not stay contained within our system. When our emergency rooms are full, every other emergency room in the county, including private and nonprofits, will also feel the strain of overcrowding. This is not a problem for LA Health Services. This is a problem for the entire healthcare system in Los Angeles County.

Our patients' needs have not changed and they will not change. The costs are simply being shifted downward from the federal level to the state to the counties to the safety net healthcare systems like ours. We are already doing everything we can to operate more efficiently, reduce our costs, to protect patient care. But we cannot absorb a shift of this magnitude on our own.

We are projecting a federal revenue loss of more than $700 million a year, and a deficit of $2 billion by 2028. To put it plainly and directly as possible, we are in trouble. We need your help to protect Medi-Cal coverage and to use every tool available, including multi year state general fund appropriations directed at public healthcare systems.

We need your help to save our safety net and prevent deeper instability across the region's healthcare system. Because when the safety net is weakened, the consequences reach far beyond our hospitals and clinics, and will impact the 10 million people that call LA County home. Thank you.

Good afternoon, Chair Menjivar, honorable Members of the Committee. Thank you for inviting us. My name is James Williams. I'm the County Executive for the County of Santa Clara. As you've heard from my colleagues from LA County and you'll hear from the rest of us, HR 1 poses an unprecedented crisis for access to health care and food for Californians.

And we need deep partnership with the state, which is why we're grateful you're holding this hearing and grateful for the leadership of the legislature in response. Santa Clara County is home to nearly 2 million residents. We're the largest county in Northern California. And even in our county, admittedly one of the wealthier parts of the state, one in four residents, over 465,000 individuals rely on Medi-Cal for access to health care, and 133,000 of our residents rely on CalFresh for access to food.

Our county operates Santa Clara Valley Healthcare, which is the largest public healthcare delivery system per capita in the state, the largest in Northern California. We have four hospitals and 15 clinics, two trauma centers, one of only three comprehensive burn centers between Los Angeles and the Oregon border.

And we are the single largest provider of healthcare services, both for Medi-Cal beneficiaries, but also for Medicare beneficiaries in Santa Clara County. Medi-Cal is our single largest revenue source for our healthcare delivery system. And HR 1 is projected to result in over $1 billion a year in lost revenue to our healthcare system. We are facing this crisis head on. In Santa Clara County, we have moved swiftly in response.

Our community brought forward Measure A, an emergency sales tax measure, which received overwhelming public support. It is the most we can legally do in asking our local voters for revenue support. And though critically needed, the 330 million that Measure A will bring in, and it was overwhelmingly passed by our electorate, doesn't even make up one third of this revenue loss.

We're already moving swiftly given the revenue impacts that we already face as a healthcare system to increase efficiencies, to take actions. And this mid year, our Board of Supervisors adopted 200 million in ongoing reductions, including the deletion of hundreds of positions in our healthcare system to maintain a balanced budget.

And so we need deep partnership with the state. We're not coming asking for a handout. We're coming in seeking partnership and asking the state, even though it cannot eliminate the devastation being brought by HR 1, to work collectively with counties to mitigate not exacerbate those impacts.

We urge the legislature to move swiftly in three key areas. The first, which was I know the focus of a lot of discussion in panel one this morning, is to preserve enrollment in Medi-Cal and CalFresh. And the committee heard about just how much federal funding is at stake with preservation of enrollment.

The work rule requirements and more frequent eligibility redeterminations are gonna impose huge numbers of coverage loss. We are very concerned about that, and we're also concerned that the state is exacerbating that harm with the changes that have already been made and the changes that are proposed to be made to the state only Medi-Cal program, which just in our community alone provides access to healthcare for over 70,000 individuals.

We support Senator Durazo's SB 1422 to end the enrollment freeze on state only Medi-Cal and restore full scope coverage. We're grateful that the state agencies as you heard today are moving forward with as much as possible automation. We urge that to continue swiftly, but that is not going to be sufficient.

We know that for many of these populations, there will need to be hand holding. And that means resources and support on the ground at the county level with eligibility workers and employment counselors and others to help people navigate through these work rule requirements. We are doing our end of things. Our departments are working collaboratively, much like in LA County.

Our parks department, for example, partnering with our social services agency on ensuring access to volunteer and other opportunities. We have partnered with our labor unions, including specifically SEIU, on changes in how we do our work with our eligibility workforce very collaboratively to be ready for and to move forward with these extraordinary changes being brought by HR 1.

But we also need the legislature to support the California the County Welfare Directors Associations ask for $373 million in General Fund augmentation to support all 58 counties in the resources that we need to keep people enrolled. Second, the state has to account for the unique and critical role that the public hospital system plays.

Public hospitals are only 6% of California's hospitals, but we operate 50% of the trauma and burn centers and train more than 50% of the physicians in California. Public hospital systems serve 80% of the state's population. These systems provide backbone healthcare services, obviously to Medi-Cal beneficiaries, as you heard from my colleagues in LA County.

But these are critical services that are provided and available to all Californians and that form the backbone of access to healthcare for all Californians. There are a number of specific cuts in HR 1 that uniquely and specifically devastate hospital systems like ours that disproportionately rely on Medi-Cal funding.

And we need partnership with the state to mitigate those impacts. And that's why at a very, very minimum, we support the California Public Hospital Association's request for parity with private hospitals in not having the state force counties to pay the state match for inpatient hospital stays for Medi-Cal.

But the reality is even more partnership will be needed to ensure that these community and state wide public hospital resources remain available for Californians. And then finally, you heard about the relationship between the state and counties on indigent care.

Yes, counties have this obligation under Section 17,000 of the Welfare and Institutions Code. The reality is post Proposition 13, which was one key piece that was left off of, I very much agree with the LAO analysis that was presented this morning.

But one key data point on that timeline that was missing was the passage of Prop 13. That is how counties became dependent on a fiscal relationship with the state and unable to, on their own, raise adequate revenue to support obligations like Section 17,000 that existed since the 1930s.

We rely on that state funding to support public health, to support indigent care, and we will have to revisit what that relationship looks like. And let me share one sobering stat. Before the Affordable Care Act expansion in our county, over 20% of our patients were uninsured.

Post expansion, it's about 2.5%. So the state was right in revisiting the fiscal relationship for indigent care with the Affordable Care Act expansion. Now sadly, we're gonna see much of that progress lost and that will again require revisiting the fiscal relationship between the state and counties to ensure continued access to care. So we're grateful for your leadership and your support.

We urge you and your colleagues to recognize this crisis for what it is and to act with the urgency necessary given the timelines. You heard about nine months to hire an eligibility worker, that's true. The timelines to put the things in place to try to mitigate these harms on Californians. Thank you so much.

We have representatives from three different areas with Ventura County, San Francisco, and LA. We're gonna start with Ventura County.

Hi. Good afternoon. My name is Christopher Steven Balma. I'm a proud member of SEIU Local 721 and I'm, I'm a client lead for eligibility worker from Ventura County. I've been with this—I've been in this field since 2019.

I'm one of 13,455 eligibility workers across the state represented by SEIU who help people apply for and keep benefits that help, that help them keep their families, keep their dignity, keep their life opportunities, and in many cases, keep them alive. Today, I'll be talking to you about HR 1 and its impact on our SEIU brothers and sisters across the state, the communities they proudly serve, and the leadership we need from the legislature and the Newsom administration. In my job, we handle renewals of benefits, but we also process any changes that might have happened between the renewal deadlines, like if someone finds a new job or someone moves out of the home. Additionally, we, we work face to face with clients who come into the office without an appointment.

Even though we've known HR 1 was coming, there's no way for us to prepare for the cripplingly long waits our clients will experience as we try and navigate the many new requirements and exemptions. Our clients are actively in a crisis, and my side currently has my supervisor and I overseeing a unit of six eligibility workers. And we will each contact up to 10 to 15 clients in each eight hour shift. Many cases are for what we call non-needy caretaker relatives. That's when a relative of a child is requesting aid for a child because their parent isn't present for any reason.

For example, in Ventura County, we've had a lot of children whose parents have been detained by ICE or deported, so, another adult needs assistance to supplement the additional needs of these children they are caring for. Some of these relatives who have stepped up are seniors and don't have health insurance from work. So, we will often screen them for Medi Cal as well as CalFresh. The best way for us to continue to provide the quality, client-centered services we need, we need to, is to have solid training.

But training takes away from our work. And since we already are short staffed and overwhelmed and since Ventura County currently has a hiring freeze, I don't see a clear way through the, through this without people falling through the cracks. I chose this career because I myself am a child of immigrant parents and a native of Ventura County. I'm here today thanks to the programs like these. I know what it's like to need them and I know what it's to succeed in life because of them.

I'll never forget my mom's desperation as she tried to meet all the requirements for the programs she needed to be able to make sure we didn't go hungry. And she was doing everything right. The process was just really confusing to her. I remember she would go to her appointments with a grocery bag full of all the papers from the last year just to make sure that she had whatever they needed. And so, that experience made me want to be the person helping on the other end, making the process as easy as possible.

If I can speak for my Ventura County colleagues and clients, we are scared for our communities and for ourselves as workers. While our clients may receive notification on changes of their eligibility and what they need to do, in many cases, these notifications are not language accessible for them, or they are unhoused and may not be able to rely on getting the information they need when they need it. So, my colleagues and I will have a major workload increases on both Medi Cal and the CalFresh side. And in many cases, we may see our workload double or even triple.

As of right now, we have only been trained on the screening of a bot and work registration requirements. Nobody has been trained in the actual follow-up needed for people that are required to be enrolled in these programs, or the requirements themselves. So, in short, meeting our clients' needs will take time and it'll take training. Right now, there's no plan for how we're going to bridge that gap between where we are now and where we will be with the HR 1 requirements. We must be properly resourced for this to work.

Lives depend on it. Communities depend on it. And communities depend on us, the workers. I'm so scared of what it could mean if California doesn't fight the harm caused by the HR 1 cuts and our brothers and sisters and kids go hungry. Every lawmaker in the state should be as scared as I am.

We can't just shift the cost onto their counties. There's just no way that they can handle this burden alone, and we will all pay the price, even the wealthiest Californians, if our systems fail. We must work to implement HR 1 in a way that does the least harm possible and keeps the most folks enrolled in coverage while supporting us, the workers. We love doing our job, but it hurts to know that if we are not prepared, families will be impacted and lives will be impacted. Thank you for the opportunity to share with you and we hope to work with you moving forward. Thank you.

And members of the subcommittee, thank you so much for holding this hearing. My name is Tangerine Brigham, and I'm the Chief Operating and Strategy Officer for the San Francisco Health Network, which is part of the San Francisco Department of Public Health. I want to build on what my colleagues described from the county perspective by talking about some of the specific financial architecture that underlines the funding for public hospital systems, because it's very important to understand how we're funded to understand the devastating nature that HR 1 will cause us. You know, public hospitals are located in 15 of our 58 counties, where more than 80% of California residents live.

And despite being only 6% of the hospitals in the state, we serve more than 10% of all Californians. In San Francisco, we are the only level one trauma center. In addition to being the level one trauma center providing not only inpatient services, but specialty services, we provide primary care services in several clinics. We have a skilled nursing facility. We serve a number of individuals who have medical complexity, particularly the homeless, street medicine.

We provide jail health services in addition to behavioral health services. So, we are critical to ensuring the health of a very vulnerable population. You know, our patients are predominantly on Medi-Cal and or other public forms of insurance very similar to my colleague that you heard in Santa Clara. Those patients are also predominantly people of color, that being either African American, Asian Pacific Islander, or Latinx. And it's important to recognize that public hospital systems not only are important safety net providers, but we are not like other hospitals.

We serve a higher concentration of Medi-Cal uninsured patients, people experiencing homelessness, and as I said a moment ago, individuals with complex behavioral health needs, and certainly, undocumented individuals. And that is a fundamental mission. We believe in that mission, but there is a cost to that mission, and revenues are needed to support that mission. And if that cost is not, underwritten by equal portion at the state and the federal level, we have, what we have today is a funding shift—a funding shift that transfers those costs to localities and public hospital systems, such as San Francisco's.

I suspect you know this well, but Medi-Cal is designed to be a partnership between the state and the Federal Government, where they, just like the public hospital systems, we're getting matching funds, but those matching funds, as you've heard throughout this hearing today, are going to be reduced. And similar to HR 1, the reductions in state directed funding that help pay public hospital systems to provide services to this population that I just described. We're going to receive—oh, that's lovely. I like your mommy too.

We'll receive funding that compensates us. It's really important because we get very low base rates in our Medi-Cal program. And these payments are critical and integral to ensuring that we're closer to covering our cost. Our public hospital systems, these funds are not marginal. These funds are not sort of icing on the cake.

They are more than 40% of our net revenue. So, reduction in HR 1 funding really impacts us dramatically. It's really the difference between us being able to achieve our mission and not achieve our mission. What we know is that fully funded HR 1 one will result in a more than $3,400,000,000 annual loss to California public hospitals. In San Francisco, almost 250,000 residents rely on Medi Cal.

We project 25,000 to 50,000 of those individuals will lose coverage by the 2027. That's a 12 to 23% reduction. And of those, about 8 to 16,000 are being served by the San Francisco Department of Public Health. So, that's the people impact, and I think it's really important to understand that as we're talking about the numbers.

But going back to the financial implication for San Francisco Department of Public Health, by fiscal year '27-'28, there will be a $315,000,000 reduction in revenue that comes from both a reduction in direct funding, as a result of HR 1 and an increase in the number of uninsured because individuals will have lost their Medi-Cal coverage. That 315,000,000 we anticipate will actually increase to 400,000,000 by the time HR 1 is fully implemented. So, what are we doing to address this? You know, we have not waited for this fiscal crisis. We have always attempted to be efficient.

We recognize that it's our responsibility as public stewards of the purse to ensure that not only are we maximizing revenues, but we're ensuring that we have a very cost efficient—effective—system. So, we've done a lot of things from reducing our cost of registry, to improving our supply chain, to reductions in avoidable utilization by prescribing, for example, long-acting antibiotics that make it easier for individuals to really not be admitted. And if they are admitted, to reduce their stay, so that we're reducing our hospitalization rates for individuals who really could be cared for, outside of a hospital setting. I understand that there was some interest in our indigent care programs.

So, I wanted to give a sense of the indigent care programs that we have in San Francisco. We have two. We have a sliding scale program that we've had in existence, quite frankly, to meet section 17,000 as you heard earlier in the first panel. We also have a program called Healthy San Francisco that was implemented in 2006 that we're fortunate still exists. That program was not a—was a lift like every other indigent care program that you previously heard about, at this hearing.

That program is critical. One of our concerns is a program which we created in advance of the Affordable Care Act, which we saw enrollment decrease as a result of the Affordable Care Act, will now increase. And with that increase will be increased cost—cost that certainly we did not budget for. Our program provides a comprehensive scope of services from primary care to inpatient services.

It covers individuals irrespective of their immigration status. But even though San Francisco may be perceived as a county with unlimited, unlimited funds, that is not the case. We had not anticipated to go backwards by having an increase in the number of uninsured in our community. That will be a cost to our system and a cost, quite frankly, that we cannot fully cover without increased funding from the state. So, in conclusion, I really want to ensure that the subcommittee recognizes that public hospitals are unique, and they have a very clear and defined role as part of a critical safety net system within California.

And that safety net system cannot be destabilized. And that the we really need to ensure that we are prepared for the future to be available for our population. And so, we're asking the legislature really con—quite frankly—to hold the line on Medi Cal coverage and to use every available tool that's in your arsenal including the multiyear state general fund appropriations directed for public hospitals, to support indigent care programs and certainly, to support our county eligibility workers as you've heard, today and certainly on this panel, to address what is a structural deficit in long term funding, for public hospitals, in California. Thank you.

Thank you so much.

Good afternoon. And thank you, chair Caroline Menjivar, for giving us the opportunity to testify today. My name is Corine Sanchez. I'm the President and CEO of El Proyecto del Barrio in the San Fernando Valley and San Gabriel Valley in Los Angeles County. We have operated for over 56 years in our community.

I'm here today on behalf of other community clinics, health centers, and more importantly, our patients, our community. I'm a founder of CPCA, California Primary Care Association and a current board member on the board of CPCA. Okay. What, what is our role? Community health centers are the backbone of California's primary care safety net.

Across the state of California, we provide primary care, specialty care, such as pediatrics, OB/GYN, mental health services, services, and HIV services. So, statewide, health centers operate nearly 2,300 clinic sites throughout the state of California. Health centers serve more than 6,200,000 Californians each year, including nearly one third of all Medi-Cal patients. Healthcare centers deliver nearly fifty percent of primary care visits for Medi Cal patients in California. Health centers serve approximately forty percent patients with limited English proficiency culturally and linguistically high-quality care that aligns with our patients' values, goals, and preferences.

Community health centers are nonprofit organizations, and are federally designated to be mission driven, and serve all patients regardless of their insurance status or ability to pay. That means whether someone has Medi-Cal, private insurance, or nothing, they can walk in our doors and receive care. Health center's ability and capacity to serve our community is built on a specific financing model called PPS, prospective payment system. PPS is a fairly well-established, cost-based reimbursement model, designed to ensure that physicians and other medical providers are paid at a rate that encompass and represent the overall cost in delivering comprehensive care to our high need, high complex patients.

PPS is a financial foundation that ensures that community health centers are effective, operationally, and sustainable. How can these coverage losses relate to the HR 1 and the UIS community? The threat we are facing is not one single cut; it is a compounding cascade of losses hitting community health centers simultaneously. And nowhere will be found more acutely than in our immigrant rich communities like Los Angeles and organizations like El Prieto, located in economically and culturally diverse communities.

First, the state of California 2025 Budget Act eliminated, eliminated, PPS reimbursement for individuals with UIS status, which is a significant population LA County. And this will commence 07/01/2026. Four months. That represents an estimated 1,000,000,000 annual reduction in community health centers, revenues statewide. It means that instead of being paid at a cost-based PPS rate for serving patients, we will be paid at a much significantly lower rate that will not cover true costs.

Senator Menjivar's district, where we are, and other clinics located statewide are gonna lose approximately 36.6 million in actual reimbursement with this policy alone. Second, we will be the h—second, we will be impacted by HR 1, and push millions in California's out of Medi-Cal because of work requirements and redeterminations. And these eligibility restrictions, as we've heard from today's panelists, will have a negative effect on our community. When you layer these together, health centers are projected to lose at least 1.6 billion in '26-'27 alone. And that figures to grow, exponentially in subsequent years.

When we lose Medi-Cal members to HR 1 and we also lose our PPS reimbursement for our UIS population, we lose the financial stability that supports our entire clinic system safety net. The compounding effect is severe. Declining enrollment, increasing uncompensated care, and reduced reimbursement, hitting us all at once. And there is an added risk requiring clinics to separately track our population.

It is a bill by immigration status, introduces serious data privacy vulnerabilities at precisely the moment when federal enforcement agencies have been pushing Medicaid data sharing with immigration authorities. This puts our patients and staff at risk. And quite frankly, ICE and other government entities have put fear and deterrent to our community clinics. Third question you ask, how are we managing the potentially surge of uncompensated care, particularly in areas like to see sharp increases in uninsured. Even as coverage declines, our doors stay open.

When someone loses Medi Cal, they do not lose the need for care; they lose their coverage and they show up at our community health centers as self-pay patients, often with sliding fee schedules, application, and which is a nominal fee, nominal fee, which does not cover, of course, our costs. We continue to serve them, but we lose a payment for reimbursement for these services.

Community health centers across state are already managing converging pressures. Rising costs in our workforce, as we all know in SB 525. There's workforce shortages involving our medical providers and mid-level staffs.

Increasing demand for services, particularly behavioral health with amplified fear and stress with ICE and other immigration motions in our community. Growing number of uninsured or underinsured patients without stable reimbursement and operate—operational—decisions become very painful. We are slowing or freezing hiring physicians and mid-level providers, nurses, and more particularly behavioral health providers, which are low in availability. We are reducing our clinic hours to our community.

And in most severe scenarios, reducing services, merging, or closing clinical sites. What are the policy changes we're asking of this committee? Protect PPS reimbursement. The legislature must reverse elimination of PPS for state-only medical populations, or, at a minimum, delay implementation for one fiscal year. To allow time for us to work together, and I mean us, the community and the state, on solutions that reduce costs without weakening the primary system that millions of Californians depend on.

Reducing reimbursement, number two, for primary care providers that deliver nearly 50% of all medical primary care visits will destroy the safety net infrastructure. Two priority, maintain a statewide uniform coverage solution. We stand statewide with advocates, as I stated earlier, under CPCA, in calling for full restoration of Medi-Cal services for UIS communities and a reversal of the harmful policy included in the current year's budget.

If full scope Medi-Cal coverage for all income eligible Californians is not fiscally feasible in the near term, the state is—must produce a comprehensive unified statewide alternative, not a county by county, patchwork solution. Any alternative co—coverage solution—must follow a standardized net of essential health care benefits, using existing administrative infrastructure, protect the patient, patient's privacy, provide fair and adequate reimbursement for our providers and staff, and maintain flexibility to return to full scope Medi-Cal if fiscal conditions improve.

Number three priority I ask of this committee, ensure fair and adequate reimbursement for community health centers. Whatever coverage model the state pursues, it pursues, it must include cost-based fair reimbursement for FQHCs and RHCs. There is no alternative solution that works if health centers are not paid adequately to provide the much needed care. Failure to act responsibly is real and the costs are high. They show up in emergency departments, hospitals, county systems, as stated earlier.

Maybe one day.

They show worse health outcomes—excuse me—more advanced disease and more expensive care. The safety net can absorb a great deal, but it cannot absorb the level of just disruption without significant, lasting damage. This committee has an opportunity to send a clear message.

California will not balance its budget on the backs of our most vulnerable populations and residents. I urge you to—I urge you to protect PPS, invest in statewide coverage solution, and ensure the community health centers have resources to continue to do the work we do, keeping California's safety net intact. I thank you doctor—Senator Menjivar.

And I'm available to answer any questions. I have my CEO, CFO, Ricardo Ornelas, present if there's any more specific, financial related questions of the committee.

This job has made me question, maybe I need a doctorate in public health to help, so, maybe one. Mr. Palma, I'd like to start with you. You're a lead four so I can imagine that you've been doing this for a little while.

How long does it take you or a lead one—I don't know if that's a position, but I'm just assuming if there's four—to, to send people up to confirm they're eligible? We're—the state is assuming that it takes 79 minutes. 79 minutes. Have you timed yourself and your colleagues lately?

Yeah. So.

For ABAWD. Yes.

So, for my team, 79 minutes sounds about right as the average. Very often, some interviews or recertification will take more than that. It'll go into, like, the hour and a half, an hour and a 45 minute range. But very often, if we have, like, an ESAP and elderly disabled household and they have a lot of the information already on file, like if they're receiving social security and Medicare, we can verify all that electronically. It'll sometimes be like in the fifty-minute range.

Okay. And then you talked a lot about training. What additional training is needed for you all to be ready for all the HR 1 impacts?

So, a lot of the trainings that we would need would just be from the ground up. Preferably, the trainings would be held in person in a classroom setting. That way, people are able to ask all the questions that they need and things that arise. Often, we will receive like electronic trainings through like a PowerPoint or like a system.

That's by PowerPoint.

Yeah. Exactly. We—with the changes that are happening so soon, we really need to make the changes and the trainings happen as soon as possible. Just turning the switch on, like, the eligibility requirements for our clients for the work registration and the ABAWD. A lot of people need to be informed on what the follow-up is gonna be.

And even on a workers point of view, it's not just starting to do those requirements. It's actually training them on, like, what notices we need to send out, when we need to send them out, like, what the follow ups are, what the actual requirements for each individual person is. Very often when we start screening them for exemptions, you kind of open a can of worms. So, for example, like if someone meets an exemption for a student, then you need to screen them for the student exemptions to see if they're even eligible to the CalFresh program.

And then you can, like, work your way down to see if they're part of, like, the other, like, the student requirements. But yeah. So, sorry. The training will take a lot of information that these changes are gonna are going to affect and hopefully get everybody on the same page.

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

Surprisingly not. I don't feel like people are as informed as you would expect of those changes that are happening. Okay. Like even internally on, at the county level, I don't think people are aware of who's gonna be doing this enforcement and the ABOT follow-up. As of right now, I believe it would be the actual CBS workers, but there hasn't been given any guidance or any training.

Yes. The client benefit specialist. We haven't been given any guidance or follow-up on who would be doing that kind of work. As of right now, we do have, like, employment services workers doing, like, the welfare to work program, like the WEX programs, and all those other things that they have mentioned. But that is a completely different requirement and field. People just assume the other workers would be doing it as of now.

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

So, the amount of workload that we're doing right now is very, very tight. Because of the hiring freeze that we currently have and all the changes that are happening, we're starting to take on more and more of a workload. We—a lot of the changes that we're doing is kind of preemptive, kinda like trying to avoid the fiscal penalties that we've talked about today. We're starting to, like, review cases, renewals. We're doing them both before authorization and post authorization.

But that also goes into the amount of workload that each client benefit specialist is doing because they have to take time to go back and review the—those cases that are returned with any changes that might happen. And, as it is, we're really, really tight and we're currently working on—I believe we got notice of people that are already being like demoted and transferred because of the budget.

Oh, wow. Okay. Thank you.

Corine, with the removal of PPS, are clinics gonna stop seeing the UIS population?

No. No. We will continue, and we're meeting regularly to determine how we're gonna approach that in different clinic models within the clinic.

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

We're merging services right now because we're federally qualified. We are—have a mandate to deliver all services to anybody who walks in our doors. So, we have to figure out merging clinics with one another, delivering particular specialties at certain clinics. We're thinking creative operationally how we're gonna address that.

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

Well, sliding fee, which really can be like zero. Not very much. The maximum is $40 but doesn't cover costs. Other than that, we're pretty much eating those costs prime, previously.

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

Well, there's multiple hits, as you're well aware. But the UIS definitely is the biggest at this time because many of us are serving probably more UIS than we know because we, by federal guidelines, cannot ask if they are documented. So, it's kind of like the unknown that's gonna be a, a big hit on the system totally.

Okay. Thank you. Miss Brigham?

Yes.

I said it right. Okay.

Just like the Mormon.

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

It's okay. It's okay.

Sorry.

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

Yes. Public hospitals could do that. I, I think the challenge, quite frankly, is what happens to those patients and where do they ultimately come in for care. They may come into care in the emergency room and being cared for in a much more expensive setting when, in fact, a hospital has been forced to either close a service or reduce access by closing or scaling back on hours or days of the week. There are many ways in which hospitals try to, as much as possible, preserve services within the funding that's available.

But certainly, there are the options to really make difficult, hard decisions around the prioritization of what services are available given the limited funding.

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

It unfortunately seems to get worse and worse, quite frankly, based on policies coming from the Federal Government. We have projected sort of our losses as a result of HR 1. But, you know, we are all in the situation of these being estimates. And those estimates could, in fact, be conservative. In fact, the resulting revenue loss could be higher based on other changes that may come down the pike based on either federal or state policy.

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

It potentially could. There's something called graduate medical education. If there are reductions in GME, that certainly could reduce the number of slots that are available. We are critical to the pipeline of health professionals and anything that jeopardizes that will ultimately jeopardize access to care.

Thank you, you, you three. I appreciate you coming and adding to the conversation. Thank you. Alright. Time for public comment on the three panels. Only on the, the HR 1 impacts. And if there's any little one that's gonna be providing a comment, please bring them to the front of the line. It's a long day, y'all, so I have to limit to no more than a minute, please.

Okay. No. She's gonna be here with me. Yeah. Good afternoon, chair and members. My name is Quinn Chung. I'm a registered nurse, and I'm also a parent leader with Parent Voice of San Francisco. We align our comments with the Reimagined CalWorks Coalition. I'm speaking today in support of friends and community members who rely on CalWorks, Medi-Cal, and CalFresh to survive. These programs are not extras.

They are lifelines. They help parents stay stable, keep their children healthy, and avoid falling deeper in poverty. If families lose access to these supports, the impact would be devastating. It means more people going hungry, more untreated health conditions, and more families pushed to the brink of homelessness. In a state as wealthy as California, no family should have to face that reality.

I might be one of those families if I can get back into the work, workforce. I've been a full time stay at home mom, and I'm trying to go back into nursing. And I applied for a position at Laguna Honda Hospital in San Francisco, and I was told that, there was, like, a 100 applicants, over a 100 applicants to be exact, like 150 applicants, and they're only hiring two people because, of the budget cut to the Department of Public Health. We are asking you to find progressive revenue solutions and not balance the budget on the backs of our families.

Please protect CalWorks, Medi-Cal, and CalFresh. Our families are counting on you. Thank you.

Thank you.

Okay. I had to write down what I was gonna say. Okay. Good afternoon. My name is Ella Fernandez and I'm with Parent Voices in San Francisco, and I'm here to speak, what's going to happen with the kids if Medi Cal and CalFresh is cut. Some children are dealing with mental behavioral problems. This is why we're asking to please to find another progressive revenue options and not balance the budget on our families.

Thank you so much.

Thank you.

Hello, chair members and members. My name is Betsy Ponce. I'm here with Parent Voices San Francisco chapter to speak with what I'm going through personally. I have a five-year-old granddaughter who, with disabilities, who loses her Medi Cal due to the IHSS. Her mom is her worker, the provider.

She is the client. And because she gets so many hours due to her disability, my daughter loses her Medi Cal because she makes too much. But then the baby loses the IHSS, which means my daughter loses her job. It's a vicious cycle. Without Medi Cal, she doesn't get her Golden Gate Regional Services, her OT, her occupational therapy, physical therapy, her ABA, her speech and language.

And it's very confusing for my daughter to understand how to apply to be the exempt under the new stuff or how to even go there. And for her to provide outside medical, it's almost 550 a month for outside medical just for the baby, not the dental, not anything else. The second part is.

Really quickly, ma'am.

Okay. I tried to be her worker. I was on SSI. I researched it. I got cut off last January from SSI food stamps and county food because just going back to work. So, the budget, everything there, it's.

Thank you.

I'm to, you know, please protect all these services.

Hi. My name is Maria Story. I'm organizer of Mayor Boyse in San Francisco. Thirty years ago, when my children were still young, I was also on TANF. And for my family, that was a lifeline.

And for many families, it's a stop gap measure. Nobody gets rich on a $700 a month grant. And California has the highest cost of living in the country. And in San Francisco, our grant is not even enough to pay for rent. So, considering the skyrocketing cost of groceries, gas, and basic necessities, families and CalWORKs cannot afford to lose a single dollar of their cash assistance.

With inflation going off the charts, there should be a cost of living adjustment so families can keep afloat and not be drowned in debts and desperation.

Thank you. I'm gonna ask any comments on CalWORKs to wait till the end of the hearing. Right now, we're on CalFresh and Medi Cal HR 1 impacts.

Okay. So, I just want to add at the end that we should not keep balancing the budget on the backs of our children and families and make sure to look for other sources of revenue. We saw the upward increase in in wealth and we, we need to have a temporary revenue taken from, from our billionaire.

Thank you. Next to the computer.

Hello. My name is Christine O'Keefe, and I live with cerebral palsy. Thank you for giving me the chance to speak.

Hello. My name is Christine O'Keefe, and I live with cerebral palsy. Thank you for giving me the chance to speak today. I have had a speech impairment my whole life, and people do not always understand me when I talk. That is why I use AAC, augmentative and alternative communication. AAC helps me share my thoughts, express myself, and be part of conversations that matter. I also work as an AAC mentor, helping other people with disabilities learn to use communication devices so they can express themselves too.

Seeing someone say something important for the first time on their device is incredibly powerful. The life I have today is possible because of Medicaid and services from my regional center. They provide personal care support and equipment like my wheelchair and my EEC device, which allow me to live independently and do my job. These supports are not luxuries. They are essential. Medicaid means dignity, independence, and having a voice. When you protect Medicaid, you protect the lives and futures of people with disabilities. Thank you.

Thank you for coming.

Hi. Good afternoon, everybody. My name is Mary Jimenez, and I'm coming from you from Yolo County. I'm here with empower well, empower poverty children. I'm sorry. My brain is just completely smashed. I am a nursing mother with two little ones. And it's been quite quite a couple of hours here. So I'm here talking about how important CalFresh and Medi-Cal is. For me, currently, it's amazing help that me and my partner partner were like, well, we're actually getting help.

And we were amazed when we were get we're starting to get support. And I could just imagine how much that would impact families that are not able to receive anything or health care. My it's mind blowing to me that we're even having conversation about cuts. My encouragement for y'all is that at a state level, that we remember that we are California and that we can, even though our nation or our current administration is telling us that we can't. We say we can't.

And when they tell us to Thank you. Go down, you know, we go up. Thank you.

Thank you so much. Thank you. Yeah.

My name is Monique Harris, and my group is Hand in Hand. I've had Medi-Cal since I was born, and if I did not have Medi-Cal and attending care, I could not take care of myself. In 1989, I had my son, and it was fear again. I was in my son.

In 1989, I had my son in again without, Medi-Cal and I wouldn't be able to, do this. Please support us. Please support us.

Thank you for coming, Ma'am.

Hi. My name is Diana. I am here with End Child Poverty California. I'm here because CalFresh and Medi-Cal are important to me, and the changes that are happening will directly impact me. In December, my Ola County worker called me to let me know about the changes to CalFresh and that I was at risk of losing assistance.

I told her I've been looking for work. As a licensed cosmetologist, our industry has been having a hard time. That was the last communication I've had from my worker. This hearing has helped me understand that I'm not alone and that soon I can also be at risk of losing Medi-Cal. If we don't do anything, people like me will lose access to CalFresh and Medi-Cal. Thank you so much.

Hi there. Jennifer Greppi, Parent Voices California. I just have to say that, like, I heard numbers, a million families, 2,000,000 families, and every single one of those families is an actual person. A real kid, a real mom, a real dad that's gonna lose access to food and health care. Like, two things that are non negotiable.

And so I'm just asking you to we have to figure out another solution. Like, cutting off families is not an option. And so please, we beg you. Think about those faces when you're making decisions. Thank you. Yes, ma'am.

Hi. I'm Gabby Davidson with the California Association of Food Banks. I first wanted to highlight our request to expand CFAP to provide state funded any comments on that right now?

Okay. And about the 14,000,000 for CalFresh Outreach. Talk to that. Okay. Yeah.

So, we also we wanted to include the legislature to include $14,000,000 to sustain the existing CalFresh Outreach network, which has been affected by the administrative cost shift to HR1, since funding for this was not included in the January budget proposal that the governor had. And as a former CalFresh outreach worker, I know how critical this program is to connecting seniors, veterans, and others to CalFresh. And we know how devastating it will be if these organizations can no longer do this work. And so we really need to keep as many people on CalFresh by funding counties and supporting the CalFresh outreach network. And then for those who are ineligible or are going to be cut off due to the time limits, we need to expand CFAP and sustain Cal Food, to provide that solution.

Thank you.

Thank you.

Madam Chair, Greg Herner for 211 San Diego. We're a co-sponsor of the effort to maintain, the CalFresh outreach budget, with the California Association of Food Banks. We serve over a half a million people annually on CalFresh in San Diego, a third of which are children. But we're also a prime. So that means that cuts to this program not only affects San Diego, but Humboldt, Kern, Sacramento, San Yanez, Inland SoCal, Orange County, and Ventura, which you heard from today.

So we encourage you to do that, and the benefits of nutrition have so many other, ways that it saves the state money. And your questions certainly got to the heart of that, so we really appreciate your comments.

Thank you, sir.

Good afternoon, Madam Chair. I'm Keeley O'Brien with the Western Center on Law and Poverty. In less than two weeks, nearly 1,000,000 Californians will begin to lose their CalFresh benefits. These cuts are so horrifying that they meet the international threshold for famine conditions. We urge the legislature to fight against these cuts and act now by investing $1,820,000,000 this year to further expand the CFAP program to cover people losing CalFresh due to time limits and humanitarian immigrant assist exclusions and require also corporations and billionaires to pay their fair share.

Despite the extreme urgency, we are hearing that this setting up this famine prevention infrastructure will take eighteen months. In contrast, we got the ACL for ABOD restrictions in December and will be implementing just six months later. We need to ask why it only takes six months to hurt people, but takes eighteen months to help people. We must do whatever we can to speed up this process and refuse to ask nearly a million Californians to sacrifice their food benefits while our taxpayer dollars are wasted on back filling the budgets of wealthy corporations. Thank you.

Thank you. That was a good question.

Good afternoon. Whitney Francis with the Western Center on Law and Poverty. HR1's crow cuts to Medi-Cal and CalFresh to expand tax cuts for the wealthy and funding for immigration enforcement will have devastating impact on low income Californians. California cannot absorb these cuts. We echo the calls for the legislature to pursue progressive revenue solutions.

Medi-Cal provides comprehensive critical coverage and recognizing the immediate gaps caused by HR1 and budget cuts. We support adequate funding for indigent care. However, this cannot be funded through shifts and realignment that result in cuts to our poorest families in the CalWORKs program. We support funding for counties to ensure they're adequately staffed to meet the increased need across Medi-Cal and CalFresh, including outreach training and staffing of Cali County call centers. And finally, recognizing the immense administrative burden of HR1, we call on the legislature to reinstate proven Medi-cal renewal strategies to support county implementation and keep eligible Californians enrolled.

Thank you. Thank you.

Good afternoon, Chairman Menjivar. Josh Wright with the California Association of Food Banks. Thank you for agendizing Cal Food as part of the conversation on HR1 response today. As was noted in the agenda, Cal Food faces a 90% cut in funding this year. Our network also experienced a 40% drop in federal TFAP foods, last year resulting in over a $100,000,000 in lost, food support.

This loss of both federal and state funding comes as food banks face an unprecedented increase in need this year due to HR1 with humanitarian immigrants beginning to lose their benefits next month. We know that no matter what action the state takes, there will be a gap in food benefits. Food banks need Cal food funding now more than ever to ensure we can meet the needs of our communities. Thank you so much.

Thank you.

Thank you, Madam Chair. Andrew Shane with CDA. I'll be brief. I appreciate the discussion with with counties. I just wanted to respectfully add to the record on the first panel on, funding for CalFresh ABOT implementation.

To be clear, there's not new funding in the in the January 10 because the case load declines offset any new resources. So there's not new money for county readiness, and so we really appreciate you asking about the 20,000,000. Glad to follow-up with you about that. Second, the state is right that the underlying methodology, under the CalFresh entitlement means that it can be adjusted for caseload over time, but that will be too late. Right?

That will be after we've lost people and people potentially coming back. And so what we really need is the upfront ability to hire, to staff, and train. And as you hear from Christopher, once those screenings happen, it opens up a can of worms. And that's really the time we're talking about to build trust, to keep people on the program. It's that intimate information needed to get to those exemptions. Thank you.

Thank you.

Good afternoon, Madam Chair. Connie Delgado on behalf of the District Hospital Leadership Forum. These are the 33 district and municipal hospitals that are independent public hospitals that serve the local safety net serve as a local safety net in many rural and underserved communities. We are smaller than our larger pub designated public hospital counterparts, but we are no less essential to the communities that we serve. We appreciate the focus of today's hearing, because HR1 is not just a coverage issue.

It's also a direct threat to public hospitals financing structure that supports care for the these vulnerable communities. Today's hearing materials do a good job of highlighting the impact of HR1 on Medi-Cal provider taxes, state directed payments, and other financing tools that California relies on to support, the safety net. For district hospitals, the combination of rising uninsured rates and weaker financing tools is deeply concerning. These risks are especially serious in rural communities where we are often the sole providers of care in those communities. We urge the legislature to protect coverage, minimize, administrative churn, and defend the financing tools that keep public hospitals stable.

Thank you very much.

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

Thank you.

Thank you.

Thank you, Madam Chair. Cathy Sunderland McDonald of Capper Strategies. I'm here for Trove. Trove is a consumer driven income verification solution that covers traditional payrolling, gig work, and self employment. It is designed to reduce the administrative burden for both individual clients and for county workers.

With Trove implemented, which we're working and pleased to be working with the state to do in our IT systems over the coming months, we'll be able to both income verify, as well as help calculate the hours worked for purposes of the work requirements. And, we look forward to partnering with you and the stakeholders as we move ahead and try to help mitigate the impacts of HR1. Thank you. Thanks.

Good afternoon, Chair. This is Johnny Pineda with the Latino Coalition for Health California. California must prioritize restoring full scope medical services to all Californians regardless of their immigration status. Additionally, we wanna go ahead and, encourage the Department of Healthcare Services to provide, utilization data on the Community Health Workers Program. That will help, leverage, Promotoras desalu to help with the new HR1 requirements at the local level.

And, that will ensure that, Medi-Cal recipients are accessing this benefit and keep them enrolled in Medi-Cal. So we really encourage the department to help us with that data. Thank you.

Thank you.

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

Good afternoon, Chair. George Cruz on behalf of the California Behavioral Health Association. We appreciate the department's efforts to reduce coverage for loss of loss for Californians and the technical assistance being provided to counties as they prepare for implementation. And we ask that the additional emphasis an additional emphasis be placed on community based providers. There is a significant amount of information flowing from counties directly to beneficiaries, but providers are often the most trusted messengers for the individuals they serve and ensuring providers receive direct technical assistance and clear guidance will better equip them to help patients maintain coverage and avoid disrupting care. Thank you so much.

Thank you. Thank you. Does she wanna we'll take the next one until they're ready.

Thank you, Madam Chair. Brendan McCarthy with the California State Association of Counties. Appreciate the very robust discussion about indigent care and what it is and what it is not. While some counties are and were able to provide a more robust set of benefits, for the most part, these programs were very basic, better than EMTALA and emergency Medi-Cal but not much better, certainly not equivalent to Med-Cal. CEC with our partners estimated the cost to provide indigent care for the people we anticipate to lose their Medi-Cal coverage due to work requirements and even factoring that very basic historic level of services, we anticipate cost between 2 and 5 and a half billion dollars a year.

Because of the changes made in AB 85, counties don't have the funding anymore to provide those service without decimating public health, public safety, and other programs. When you add on the impacts to public hospitals and the county eligibility workers, we anticipate impacts to counties of 6 to 9 and a half billion dollars a year. That is clearly not something that counties can shoulder on our own. We look forward to partnering with the legislature and the administration to find out best solutions to minimize the harm of HR1 onto the people we all serve. Thank you.

Thank you.

Thank you. My name is Carol Crooks, and I'm a recipient of Medi-Cal and IHSS. And it allows me to live at home, and I would be in really a a bad place without it. I'm active in my community. I'm co-convener for Berkeley East Bay Grey Panthers.

I'm a member of Hand in Hand and other groups, and I'm on the county board, county committee for IHSS. I'm really worried about the the cuts, the pending cuts. And I would like to see the the coverage extended that at the same level that it's been. It worries me that there are people that will lose their their coverage and their attendance and will be stuck living in a nursing home, which is actually more expensive if they don't have IHSS. So I hope you will support IHSS.

Thank you.

Thank you, ma'am.

Good afternoon and thank you for the accommodations. My name is Betsy Morris. I'm with Carol, a member, a leader with East Bay Gray Panthers, a fifty year old organization committed to raising up the health care and now very much the housing needs of seniors and of all people, seniors and disabled adults. And my I mean, we got hit. California got hit and we're being targeted.

I wanna honor that that's a very difficult spot to be in. But please do not repeat the the big beautiful bill and then cut more deeply into the work that supports especially immigrants and immigrant youth who are a big part of the future of the state of California. So, I have come to learn so much about the importance of in home health, and sports. Thank you. Sports and services. And please do not cut. Instead, let's look to revenue generation. Thank you. Thank you.

Good afternoon. Erica Murray with the California Association of Public Hospitals and Health Systems. Really here just to thank you for the recognition of the value and role of public hospital systems across California. Also, to connect to the policy ideas that came up today. We purposely call ourselves public hospital systems because they are more than just hospitals.

They also include many primary and specialty care clinics, many of which are FQHCs. So the cuts to PPS also have a dramatic impact on public hospital systems just in the primary care setting. But it's so important that we, emphasize primary care to keep people out of the hospital. Thanks again.

Kelly Brooks here this afternoon representing the urban counties of California. I have, worked for county governments for over 25 years, and HR1 is probably the most harmful and devastating thing that I have seen come from the Federal Government in my time representing counties. I thought the panel did an excellent job talking about the multisystem impacts. So it's human services, it's health, it's food access, it's also behavioral health. It's gonna impact people, coming in and out of our jail system.

I think it's just so hard to estimate what the impacts look like. And I think a lot of work is being done to try to think about how we implement this in the most thoughtful way possible. And I think some of our urban counties that were on the panel are obviously doing a good job trying to do interdisciplinary work and also think about thinking about leading in our their communities. I think in terms of mitigation, we're thinking of it as almost like a four legged stool. We need money to help support our public hospital systems.

There's an ask for $500,000,000. We need money for indigent care. We need resources for the eligibility work, and we may need, resources for behavioral health.

Thank you.

Thank you.

Good afternoon. Nora Angeles with Children Now. The changes driven by HR1 put children's health coverage at risk. Unprecedented Medicaid and SNAP cuts will impact millions of California families, threatening kids' access to care and basic nutrition. When parents lose coverage, kids do too.

Work requirements and new hurdles for adults, including eligibility restrictions for immigrants, will have a cascading effect on children's health coverage and access to care. State budget choices will determine the impact on kids. While DHCS needs resources to implement federal changes, the legislature must prioritize policies that keep children covered and protect access to care. Thank you. Thanks.

Good afternoon, and thank you. My name is Myra Castillo Garcia here on behalf of Ultimate Health Services, a non profit, profit, federally qualified health center serving more than 600,000 patients across Southern California each year, many of whom rely on this for essential health care coverage. The vast majority are Medi-Cal or covered California enrollees, the most vulnerable communities in our state. And for them, AltaMed isn't a preference. It's their only option.

We serve one in ten Medi-Cal patients statewide and one in five in Los Angeles County. We're here because the safety net is already under serious stress. HR one is projected to drive California's uninsured population from 2,300,000 to as many as 5,400,000 people. The work reporting requirements, more frequent redeterminations, and restricted access for lawfully present immigrants. That alone is an enormous challenge for providers like us.

Compounding that pressure is the elimination of prospective payment system rates for individuals with unsatisfactory immigration status. PPS is a vital lifeline for primary care, helping clinics like ours as under in underserved areas.

Thank you.

Keep delivering, but thank you. Thank you.

Good afternoon. Beth Monowski of SAU California. I really just wanna second some of the remarks made by panel two and panel three. In particular, as we think about the work we're doing right now in partnership with consumer allies and DHS to do everything we can to keep folks enrolled, the work of eligibility is just so important. Really appreciate your deep conversations on that today and really encourage you to think seriously about the investments that we need, not just in training but staffing up to support this work both for CalFresh and Medi-Cal eligibility.

Speaking to some of the public hospital conversation you heard here today, we absolutely agree that new investments are needed. $500,000,000 ask that, we are probably doing in partnership with the Public Hospital Association to make sure they are there to serve care, provide care to everyone. And lastly, on Dijon Care, we'll just speak to the fact that, as was noted today, we need to make sure we are supporting our counties and reinvesting in these programs. As was noted, it's been many years since they've had to think seriously about how to stabilize and support these programs. They're gonna need a lot of support from us here in Sacramento to get it right.

Encourage this conversation. So thank you. Thank you.

Good afternoon, Chair and Members. Manuel Pasa Regan with the California Immigrant Policy Center. Proud co-lead to the Health for Rock Coalition. Before the passage of HR one, the state voted to implement deep Medi-Cal cuts. The LEO's estimated 1,500,000 immigrant Californians losing coverage by 2030 due to these cuts is unacceptable.

The proposal to exclude immigrant Californians from federally funded Medi-Cal in October takes this one step further, cutting out refugees, asylum, survivors of domestic violence, human trafficking, among others. We urge you to roll back cuts from last year and reject any additional proposed cuts to Medi-Cal. We cannot continue to say that we are protecting our immigrant communities while simultaneously stripping them of the access to vital programs and service services they desperately need, and ultimately creating a two tiered health care system that supports only some. Thank you.

You just spoke a lot faster than Norla Gilmore has ever spoken English before.

I can't do that. But good afternoon. Michelle Gibbons with the County Health Executives Association of California. Really appreciate the dialogue and the ability to have the counties share just how dramatic the impacts to HR1are. On behalf of local health departments who many administer indigent care programs, but all will be impacted on the public health side too, we just welcome the opportunity to continue working with the legislature about solutions and funding for these indigent programs for alternatives that would alleviate the burden.

Thank you. Thank you.

Sarah DeCann, on behalf of the Rural County Representatives of California, and we have the 40 small smallest counties in California. I just wanna uplift the message about the importance of funding the eligibility workers and how we can keep people online and briefly talk about indigent care. We desperately need that reinvestment, similar to what we had before resources were redirected around. Our 35 smallest counties have very limited resources to raise revenue with high poverty rates and low income earners. We also have been in a situation where our counties have already been downscaling and are dealing with multi multiyear deficits, and we're really concerned without a deeper partnership between the state and Federal Government, we're gonna risk the fiscal solvency of our smallest counties and our most vulnerable counties.

We just really look forward to working with the legislature and administration, and we definitely need to make sure that the safety net for all Californians are maintained moving forward. Thank you.

Thank you.

Good afternoon. Josh Gaugler on behalf of the University of California. UC academic health centers are a cornerstone of California health care safety net. As designated to public hospitals, they provide high quality care regardless of insurance status or ability to pay. In 02/2425, UC cared for patients from 99% of the state's zip codes.

UC's academic health centers are the second largest provider of Medi-Cal inpatient services statewide. With 1,800,000, California is projected to lose medical coverage. Our academic health centers are bracing for patients with worse health outcomes and increased uncompensated care costs. UC health estimates, 165,000,000 in federal revenue losses resulting directly from HR1. These cuts will strain UC's ability to provide emergency care and result in increased uncompensated care.

It's not just Medi-Cal recipients who will be impacted. The impact will be felt by all patients we serve. We urge the legislature to support the 500,000,000 budget request from the California public hospitals. Thank you. Thank you.

Hello. Yesenia with End Child Poverty California as well as the Health for All Coalition. California is on the brink of a humanitarian crisis due to these HR1 cuts. 72,000 humanitarian immigrants will get kicked off in two weeks. Over 600,000 likely to kick dog get kicked off of CalFresh due to the ABOD rules in June.

Over one Nearly one to 2,000,000 CalFresh recipients I mean, Medi-Cal recipients will bring in the re new year with no access to health coverage. Let's re let's be clear. We're talking about, about famine level conditions in the fourth largest economy in the world, the state of California. We urge you, to to help us in preventing this from happening. We urge you to begin automation to expand the CFAP program to respond to this crisis, and so Californians of all ages, regardless of immigration status or time limited status, can access the food they need to survive.

And also, we urge DSS and the Department of Finance to release the $20,000,000 already allocated to counties and workers to respond to this crisis crisis as quickly as possible. We hot- we fought hard for those dollars last year. We're in March now. Ma'am. What is causing the delay? Ma'am. Thank you.

Thank you very much. Sam Wilkinson with End Child Poverty in California. We urge the legislature to protect Medi-Cal for all. Under the proposed budget, California mirrors federal work requirements for undocumented community members enrolled in state funded Medi-Cal. That means if people lose access to work because they are afraid of immigration enforcement in their workplaces or don't have a commercial driver's license to drive a vehicle, not only will they lose access to Medi-Cal, but their enrollment freeze will also bar them from coming back once they address those barriers.

Adding work requirements on top of these realities is unjust and harmful. We urge you to reject these policies to push back on harmful HR1 cuts and support the 200,000 lawfully present immigrants who are being kicked out of Medi-Cal by the Trump Administration. And as we stated earlier, the, or as was stated earlier, the state response must include progressive revenue streams. California's wealth was built by workers and communities, not billionaires and corporations. We are the fourth largest economy in the world because of our people, who grow our food, who teach our children, who care for our elders, and keep our state running every single day.

California must act now to unrig our tax system, close corporate loopholes, and recoup the resources lost to billionaires. Thank you.

Dear, [unintelligible] members, my name is Teresita De Jesus. I'm community member for Oakland and Food for All Coalition. I'm here to ask you to fully your commitment to expand CFAP to adults over the age 35.

We're not on that topic yet. We're not sorry. Public comment on that.

Yeah. And also, and also, and as to research the coverage benefits for 72 human immigrants affected by age r one.

On that topic yet either. I'm so sorry.

Just cut. Super hard families and immigrants, and please don't cut them. Give our seniors and a person who

Good afternoon, Chair. My name is Benjamin Chow with the California and Oregon Policy Center. In two weeks, we will begin removing 72,000 humanitarian immigrants from CalFresh, including refugees and asylees, many who assisted the US government and military abroad like in Afghanistan. In two months, stricter requirements and red tape will push hundreds of thousands more families off benefits including mixed status households. So we urge you to modernize CFAP into a state funded program that could support these populations losing CalFresh due to HR1.

And and beginning automation now to serve all families impacted by HR1 including immigrants. Thank you. Thank you.

Good afternoon, Madam Chair. Alameda County Community Food Bank. I'm Ezer Pemmin Tuvan. We would just like to record our concurrence with the earlier mentioned request around Cal Food Funding, CARET program, CalFresh Outreach Network Funding, and Sunbucks online application. Thank you so much.

Nicole Wordelman on behalf of the Children's Partnership urging the legislature to not make more cuts that would hurt undocumented Californians, voicing strong support for the investments in DHCS's HR1 implementation plan relying on community health workers and prima tours. We are also asking DHCS to publicly share utilization data on the Community Health Workers Medical Benefit so we can better understand how families are accessing these services. And we are asking for long term sustainable revenue solutions.

Thank you. Do do you want interpretation?

No. Thank you.

Randy Hicks, Californians for Disability Rights. I'm not speaking on behalf of California for Disability Rights. I'm speaking on behalf of me. Now I wanna tell you, I have Medi-Cal. And it wasn't for Medi-Cal, I wouldn't be here today.

I have broke this hand, broke this leg, broke this clavicle, broke this broke these ribs. And with Medi-Cal that put me back together, it was also the ones who gave me the free ambulance ride. So I'm telling you what what the Federal Government is going to do, it's going to hurt me. But let's not have California hurt us too. Okay? Thanks.

Alright. So don't bump into anything. We can't have any more broken bones from you. Okay.

Good afternoon, Madam Chair. My name is Rose. I'm with the California Domestic Workers Coalition. I am asking you to, asking you to prioritize raising new revenues to backfill the cuts to Medicaid. I hear stories from domestic workers every day. How they struggle to make ends meet. How they go from job to job to job in one day. And the loss would be catastrophic. Many have lost breadwinners. And they're the sole person taking care of their families. So thank you for any support.

Mhmm. Thank you.

Good afternoon. My name is Ethan Julian Samora and I'm a community outreach coordinator for Somcan and Uknai Filipino, a direct and referral services program serving the Filipino community here in Sacramento and in San Francisco. For all my life, I've had the privilege of being insured through mother's workplace. However, not everyone has that privilege. Many of the folks in my community are currently covered through Medi-Cal.

That includes seniors, disabled folks, the youth, and many of them are about to lose access to health care and benefit programs like IHSS as a result of HR one. Medi-Cal is deeply important to me because it ensures that people in my community can access the care that they need to live healthy, stable lives. And for many of us, health care isn't a luxury. It's something that we depend on to survive and to show fully in our work, our families, and our communities. And I urge you to reject any cuts or new cuts or barriers such as work requirements that would reduce access to Medi-Cal, especially for immigrants and vulnerable communities.

Instead, I ask you to prioritize raising new revenues to backfill any proposed cuts to Medicaid so that everyone who needs care can continue to receive it. Salama, thank you for your time and consideration, and I hope and expect you to do the right thing. It's the only way.

Thank you.

Hello. Good afternoon. My name is Jerrick Ruiz, and I'm a community outreach coordinator for Ignite Filipino based here in Sacramento. And I urge you to reject any cuts that will reduce access to Medi-Cal for Californians, especially for our immigrant communities. Medi-Cal and IHS is not just an option.

These resources allow our community to remain having access to affordable care, keeping us alive and remain in our homes. And with these cuts and impacts, they don't just happen on paper, but they show up directly and physically within our own communities and our own spaces. Without Medi-Cal and IHS, our communities would live without basic care. So I urge you all to reject any cause that reduce access to Medi-Cal instead, raise new revenue to fully fund Medi-Cal and IHS food programs and fund services for low income families and the in house communities to fully protect and support those who rely on these. Thank you.

Thank you.

Good afternoon. My name is Ben McMullen. I'm the systems change advocate at Center for Independence of Individuals with Disabilities. Many of our consumers rely on IHSS, Medi-Cal, and we need to, as a lifeline and to go about living their daily lives, And we need to lift up these programs by exploring revenue measures that can support funding the budget instead of slashing these critical programs that people with disabilities rely on everyday. Thank you. Thank you.

Hello. My name is Art Persyko. I'm with the California Alliance for Retired Americans in San Francisco. It's a statewide organization representing about a million members. You in the state of California have the opportunity to take a stand against the cascading cruelty of the Trump administration. Is there a new trickle down theory? The old one was taking crumbs off the table if the wealthy get theirs. The cascading cruelty is raining down pain and suffering on California. You have the chance to turn that around. Make a stand.

Be a model for the country. California state leaders should protect access to better cal and in home supportive services in the state budget to raise new revenues to prevent cuts to these as well as other life sustaining programs for millions of Californians. California is a very wealthy state full of billionaires who don't get their fair share. They must do so. It's up to the state governments to make sure these cuts do not get passed on to individuals and reduce access to health care and home care.

Thank thank you, sir. Thank you. Thank you.

Hi. Good afternoon. My name is Megan Whalen. I'm the interim director with the California Workers Coalition. We are a coalition that represents over 300,000 home care workers, nannies, and house cleaners across the state.

And, our coalition is the is the leading voice for those workers who support more than 2,000,000 homes across California. In the face of these devastating cuts from HR1 and ongoing attacks against our immigrant communities here in California and communities of color, we need your leadership now here in California more than ever to set forth a different vision for the future. The lives of our families and our loved ones are not disposable. We call on you to take a stand to push back against the governor's proposed budget cuts. We want to reject any new barriers to accessing these programs and accessing life saving care.

We call on you to realize a different vision where care workers a are protected, are uplifted, are valued, and people with disabilities and seniors have the opportunity to opportunity to live independently as part of part of our communities.

Thank you so much.

Thank you.

Good afternoon. My name is Jackie Mendelson with Nourish California. I'm here on behalf of the Food For All Coalition, but I'm gonna speak on that later. I am also just here to echo the many voices here about the extreme upcoming harm to be caused by HR1 beginning, next month. 72 humanitarian immigrants, many survivors of violence and persecution, and who rely on this critical food assistance to build their stable lives in our state, will soon be stripped of food assistance, as part of the Federal Government's attacks on immigrant communities, and ensuring no one in our state goes hungry due to these unjust exclusions or due to discriminatory work requirements and time limits as part of food for all.

So as is ensuring that the expansion work is completed on time so that benefits can go out immediately, I urge you to prevent this hunger

crisis and fold these populations into the CFAP expansion. Thank you so much. Thank you. Thank you.

Thank you. Thank you. Into the CFAP expansion. Thank you so much.

Thank you. Thank you, Wendy.

Good afternoon, Chairman Jafar. I'm Evan Fern with Disability Rights California. HR1's nearly $1,000,000,000,000 cut to Medicaid is disastrous to people with disabilities, people who often tend to interact with our medical systems the most. And many need ongoing care to survive. Life life saving medications like insulin, inhalers, psychiatric medications, chemotherapy, all of these things will become inaccessible.

For those moved to restricted scope Medi-Cal, waiting for conditions to become an emergency is incredibly dangerous and it can often be more costly to these systems than preventative care. If up to 2,000,000 people can lose care because of Medi-Cal, how many of those will be people with disabilities who die because they couldn't access care? If done right, the state budget can save lives. Everyone deserves access to the medication and services that they need to survive. We urge you to protect the people who need this care.

Thank you so much. Budget subcommittee number three is gonna take a quick recess before we move on. Thank you so much. Budget subcommittee number three is gonna take a quick recess before we move on.

Thank you.

Alright. Four hours in. How are y'all? This is my fault. I'm the one the only one asking questions so this is all my fault. Alright. Let's get into issue number two. DHCS, come on back.

Good afternoon, chair and committee staff. Tyler Seidl with state Medicaid director and a chief deputy director at the Department of Healthcare Services. I'd like to provide a brief overview of the budget change proposal associated trailer bill language related to HR one planning and implementation. To meet the requirements of HR one, including significant policy changes to medical eligibility, benefits, and financing, the department requests total expenditure authority of $33,000,000 total funds, of which 15,500,000.0 are general funds in budget year. This consists of four year limited term resources equivalent to 17 positions, two year limited term resources equivalent to 12 positions, and contract resources.

With these resources, the department will be able to make significant changes to Medi Cal Eligibility statute, regulations, policies, timelines, and processes related to the application, renewal, and change

of circumstance requirements for eligibility. Allowable immigration statuses that qualify for federal matching funds. Implement work in community engagement requirements and other significant eligibility changes, and recruit and hire for positions and establish contracts to meet major financing changes, that are in HR one. To implement the required Medicaid provisions in HR one, the department proposes trailer bill language to change related state statute that enable that will enable the department to modify existing Medi Cal Eligibility rules to regularly check and update member addresses using trusted sources, conduct six month eligibility redeterminations for certain adults, reflect eligibility updates for federally funded full scope Medi Cal based on immigration status, reduce retroactive coverage periods, and establish work and community engagement requirements. The proposed changes are necessary to align state law with mandatory provisions of HR one.

We have posted the Trailer bill language on the website of the Department of Finance and we have a fact sheet available on the website as well.

LAO, any additional?

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

amounts. Thank you. You're new. Right? Okay. Nice to meet you. You didn't wanna add anything. Right? We're all good? Okay. Great. Deputy, chief, deputy director, can you, explain the difference why some are two years and why others are four?

Yes. Thank you, senator. We are proposing, for contract resources mostly to be in budget year with the exception of, financing related contracts in budget year plus one given some of the staged implementation of those provisions in HR one. So many of them take effect in later years. Things like new capped limits on the amounts of state directed payments that go into effect in 2028.

Changes to the MCO tax which came up earlier as well as the hospital quality assurance fee and other healthcare related taxes. So we will need both budget year and budget year plus one to sort of plan and accommodate and adjust for those financing related changes. For contract resources, the remaining the resources that we're requesting are really for budget year given a sort of, focused implementation plan given those changes go into effect in 2027.

Okay. Perfect. No other questions on me for me? I'm gonna hold that item open and move on to issue number three.

This issue is regarding the general fund solutions as part of the 2025 back budget act related to undocumented and unsatisfactory immigration, status Californians. To address the protected statewide, budget shortfall, the 2025 budget act, included some very difficult policy, changes to achieve a balanced budget and achieve some general fund savings. The 2026 budget, includes updated estimates for ongoing savings from these, policies. I will provide an update on the solutions related to undocumented or, unsatisfactory immigration status or UIS populations in the medical program. First, the, medical expansion enrollment freeze.

This went into effect 01/01/2026. And this applies to individuals age 19 and older who do not have satisfactory immigration status or are unable to establish satisfactory immigration status. It, does not include qualified non citizens under the five year bar, nor individuals claiming, permanently residing under color of law or Prucom, foster children, former foster youth, and pregnant individuals. New applicants in this group are continue to qualify for restricted scope Medi Cal if all other eligibility criteria, are met. The budget projects, a savings of 659,200,000.0 general fund cost reduction in the budget year for this change.

At this time, we do not have updated enrollment or kind of actual enrollment information for this, this proposal as it just went into effect in January, typically takes two to three months for us to have the actuals. And we do post that information on the open data portal. As a reminder, though, as part of the 2025 budget act, it was estimated that in the budget in the current year, about 91,000 individuals would lose coverage as a result of this proposal. The next proposal relates to state only monthly premiums. The budget act, includes implementation of a 30, dollar monthly premium for, unsatisfactory immigration status for individuals 1959 excluding pregnant individuals, foster children, and former foster youth.

This does not go into effect until 07/01/2027. The budget act of 2025 also included the dental benefit elimination for individuals with unsatisfactory immigration status who are 19 years and older, and this goes into effect 07/01/2026. This also excludes, pregnant individuals, foster care children, and former foster youth. The budget estimates, savings of a 134,600,000.0 general fund in the budget year. We are currently actively, out doing outreach to the impacted populations, including using our our dental, fiscal, and intermediary contractor to publish provider bulletins, outbound calls to impacted members, mailing targeted, notices and FAQs on this change, and promoting this also on social media.

At this time, the department is on track for this implementation. The next propose, policy relates to the elimination of state only per pest prospective payment system or PPS rates for, FQHCs and rural health centers. This was discussed in in a couple of the panels, earlier today. The 2025 budget ends PPS for state only services, for individuals, with unsatisfactory immigration status. This goes into effect 07/01/2026.

This falls outside of the federal PPS policy because this is, state only, population. Clinics will be reimbursed at the applicable medical fee for service rate and the fee for service delivery system, and or the applicable, negotiated rate between the medical managed care plan and the clinic in the managed care delivery system. Before the medical coverage expansions in the recent years, these state only services were not covered at all by Medi Cal. So the state did not provide any funding for these services to, to our FQHCs. So this policy continues the payment for these services, but at at the rate that is, really available to all other providers.

The estimated general fund savings are about $1,000,000,000 in the budget year, growing to 1,100,000,000.0 in 2728 and ongoing. And then the final per policy related to, the UIS population is securing state rebates on pharmacy for the UIS spend in the medical program for our undocumented and UIS population. This we went live with this in October and we're using a rebate aggregator that consolidates, and manages rebate negotiations, invoicing, and collection activities from pharmaceutical manufacturers, and leverages kind of by that increased buying power, to promote greater, cost savings. Drug rebates are invoiced quarterly and then due four months after that quarter. So there's a bit of a lag in just the collection of it.

The governor's budget estimates one quarter of drug rebates of a 123,000,000 general fund to be collected in the current year And three quarters of drug rebates totaling 435,000,000 to be collected in the budget year. That concludes kind of the overview of the proposals related to undocumented in UIS.

Will? It's Will Owens with Legislative Analyst's Office. So most of the administration's updated estimates for the savings that are found in the governor's budget appear to be reasonable. But our office would just like to highlight a number of uncertainties, which we detail in our, analysis, of the medical budget. But in general, we would, we would recommend that the legislature continue to work with the administration to get regular updates as these, savings come online.

Particular, like you heard, you more detailed UIS enrollment information as the freeze continues to take effect, and then once the premiums, take effect as well. Additionally, we would recommend the legislature request additional implementation information on the elimination of the PPS rates. We've heard from clinics of some of the implementation challenges in collecting both immigration status and and how those rates would apply. So we would, again, urge the, legislature to work from with the information, with the administration to get more information and to be prepared that given the high level of uncertainty with a lot of these solutions, that, there may be there may need to be further revisions to the savings estimates, that are expected from them.

Thank you, Will.

Would you like to add anything else? Can I jump into okay? I'll jump into questions. I know director, it's too early to tell about the Medi Cal enrollments and you mentioned Wednesday online. Is that tied also to how much savings we've done so far? Or is that gonna come together? Or do we have savings information before we have enrollment?

So the savings are projections based on the savings are based on what we thought at 2025 budget active where we thought based on the 91,000 individuals, losing coverage, what that would calculate to be. And so all of this will continue to get synced up at May revision. And then as we get more actuals next governor's budget, it's all just based on more accurate and more real time information to you to update the the numbers. Okay. So that case load out.

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

They all come together? They're all based on assumptions. And so the more accurate we know the case loads that will feed into the assumptions to, estimate the savings. And so they they are tied together but you do have to make some assumptions to come up with some some of these estimates.

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

We should have a couple months of actual information. Yes. That's correct. Okay.

On the premiums, we allocated funding for this current year right now, dollars 28,000,000. Can you give me an update of what we are and what platform, how we're gonna be collecting that?

So we, yes. We had 28,000,000 general fund, for the operational cost and take, a vendor to do this work. We issued a request for information in January to interested parties. And so at this time, we're evaluating the RFI responses, to move forward with the vendor to do to do this work. Will the

$28,000,000 actually be used in this? Or is the RFI process gonna bleed into the next budget year?

In terms of the timing of the dollars. This is the cost to stand up the vendor. And so it may some of it may be used in the budget year. But it is the cost to stand up this infrastructure to to be able to to collect the premiums.

Okay. So yeah. But but Oh, yes. I I understand that. But there's a potential since we haven't selected the vendor yet that the $28,000,000 isn't gonna be used in this current year?

I don't know the timing for when we would enter into a contract with the vendor but that the the intent of those dollars is to fund the contract. And whether we enter into it in in the current year or budget year, If I if I don't have those details. And we are on a cash basis. So even if we come into a contract in the current year, but it doesn't actually get, you know, out the door until the budget year, those dollars just follow the contract the way our budget is set up.

So since we haven't selected, we don't know how the premiums are gonna be collected just yet. Correct. We've we've used,

we've had premiums in other programs before. So we're following a similar model. This doesn't go into effect till July 2027. And so, we're at the beginning process for implementation.

Okay. Going on the dental benefit Uh-huh. Elimination there. You know, we we did this before. It lasted for a long time where we eliminated, dental benefits. And then we were able to bring it back. Why did we bring it back? Is it just because we have funding at that time to bring it back?

Correct. So the the elimination of adult dental was to the entire medical Yeah. Program when there were significant state budget challenges. And it was brought back in in pieces. And I think the first piece was, didn't include, dentures. And then dentures were added. And so it was rolled back as there were more revenues and in kind of available and prioritize across, you know, the the different proposals and so that's how it it was brought back.

The health the health impacts that we saw during that time was it 89 years and that we had the elimination. Are there any that we can prevent in this go around of removing the dental benefit? Is there something that we were able that we saw in those nine months when we had no dental coverage for all of the medical population, regardless of age that we're taking as we go into round two of this elimination?

I would have to take that back. I don't know that we've looked at the health impacts as a result of the elimination, you know, in 2000, I believe it was 08/09 and then restored in 12/13, or 1314. Yeah. Okay.

I Yeah. Just wondering if we learned any Yeah. What we can prevent or not make as dire. And then director you were talk On the PPS, I just wanna Let me see if I heard correctly. We didn't always give this payment?

So this, it's PPS for the UIS population. And so prior to our expansion of the undocumented, you know, expansions, the state never paid clinics for these services. And so, in clinics served individuals with unsatisfactory immigration status and never received a payment from the state because they were not part of the medical program at the time. As we did the undocumented expansions, we then started paying for services for in oftentimes individuals who were already being seen by the clinics, but maybe not for as comprehensive of services.

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

So they run FQHCs.

They're outpatient clinics. Some of them are FQs.

Well, it's because they run it. It's not the actual hospital. It's just that they have their

It's just a matter of the collection of the rebates, the timing to It takes about a quarter to collect and then there's a lag four months after the quarters and before before the rebates are all in. And so it's just a it's a staggering that so we only have one quarter that is assumed to be revenue actually in hand. We will be getting the revenue from those other quarters but it's just not able to be booked in the current year. It just gets pushed down into the budget year and then budget year plus one etcetera. So it's not less money. It's just the timing of when it counts towards each of our budget years.

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

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

I mean, there's been a there's lots of coalitions trying to design what or think about even county partners working, you know, the managed care plans, the county at the local level trying to assess what what what are the kind of ideas and opportunities in this space. And so I think there are many conversations about, you know, we used to have lip. Should it go back to a LIP type program, which is right before ACA was kind of that was the bridge to reform. It was, almost like a statewide county indigent program, but there was some, a little bit more state investment in that space. And so I think, you know, part of this is given the projected state fiscal challenges in the out years.

This is, you know, something to be very mindful of.

And then in the enrollment freeze, I know we're giving a three month leeway if you fall off to get back on. Have we gathered any additional information on that being, like, the most adequate amount of time or I don't think I was able to ask this question of how we landed on three months.

Three months, it was through negotiations with the legislature on that and, you know, the cure period and kinda trying to provide extra, opportunities to remedy the situation.

Is that what we've seen as an average time that people have taken to get back on? Or

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

on that. Okay. I'm also wondering if, you know, and as we continue the negotiations and the three party conversations, if we end up giving counties more money with assistance, if that money would be better used just to get more people back on medical. I know it doesn't equate to the same amount of money, but like just if we're giving if we're gonna give the $373,000,000 that they're asking the CWDAs, like, can that be used to get more people back on Medi Cal? Since the freeze is saving, you know, $8,865,000,000 starting next year.

So just food for thought. I'd rather get people back on Medi Cal than get counties money for assistance just to keep yeah. Just putting that out there into the universe. That was it on my questions on issue number three. Thank you. Oh, sorry. Alejo, did I Please.

Just11 thing I I wanted to add, in response to you asking about potential ways to mitigate cost pressures on on county indigent systems as we have more UIS disenrollment. Our understanding is that those who are disenrolled the UIS individuals who are disenrolled due to administrative burden or let's say the community engagement requirements for example, would generally retain access to restricted scope medical which provides emergency and and pregnancy related services. So that is sort of a a kind of backstop as far as the the most pressing services are are concerned.

I would disagree with you. Those are emergency only. I don't think that's a backstop at all. And not everyone's pregnant. So oh, so I don't think that's a backstop at all. I appreciate it. Okay. Thank you so much for today. You're free. DHDS. Coming back to social services. Coming back to social services.

We're gonna move around an issue right now, to accommodate. We're gonna move to issue number 13 right now. Go ahead. Good afternoon. Not on. Hold on. Is the light on? There. There we go.

Good afternoon, and thank you so much for the accommodation. Samjita Mitra, Department of Finance. And thank you for the opportunity to speak today on the proposed trailer bill language related to the California Necessities Index, or CNI. This governor's budget proposal makes two technical changes to align statute with the most current status of data availability, and the calculation of the California Necessities Index. First, the proposed trailer bill language updates statutes to include Riverside amongst the California regions cited in statute and used in the CNI calculation. Consistent with existing statutory language to use a d- to use additional California geographic areas where statistically valid data are available. When the CNI statute was originally enacted, CPI data for Riverside were not separately available. However, our Riverside data became available with the release of the December 2017 CPI data in January 2018 and is available now for odd number months. Second, the proposed language adds statutory language specifying that the Department of Finance may use an estimate in the event specific data required by statute for the calculation of the cal California necessities index are not available. Under current law, the California regional CPI data for fuel and utilities is one of the five required components specified by statute to be used in the CNI calculation. However, starting

in January 2025, regional CPI And the And the proposed change fills the gap by specifying that an estimate may be used so that the CNI can continue to reflect the cost of fuel and utilities. As a quick background, the CNI measures changes in the cost of basic necessities, including food, clothing, housing, transportation, and fuel and utilities. And the CNI is used to adjust certain program benefits, such as for Medi Cal, the state supplementary payment SSP, the temporary assistance for needy families, and the in home, supportive services, or AIHHS. Finally, I would note that the, the following three points regarding this proposal. First, the proposal does not change the structure or intent of the CNI as we retain the same categories, weights, and focus on essential goods.

Second, this does not materially affect benefit levels since the estimate that finance will use is intended to closely track historical CNI trends. Third, this technical changes provides clarity in processes when data are unavailable due to potential changes or delays in federal data availability. With that I'm happy to answer any questions you might have about this proposal. LAO.

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

My question is, there's no specific data to it. It's just flexibility.

Yes. The reason The data source. Yeah. Well, the data would still be the, federal, BLS. However, we're trying to have flexibility in case of future, data discontinuation.

What would the flexibility what would that mean?

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

mean, like, where would the estimate come from? Just DOF estimating? No.

We would use the national data. We would use the national the national data is still being, released. And so we would look at, historical trends for the regional, with the NASH, a national and use that as our as our metric.

Making sure because you said if there's no national, you would use an estimate.

No. I'm sorry. The the I misunderstood misspoke. The national data is still being released. The BLS has just discontinued all regional data. So we would still kind of use the national as an input into our, estimate for the region.

So DOF is not doing their own estimate No. Getting out for the national. Yes. There's no more metropolitan specific

All the regions are removed all of it.

Got it. So you're gonna be using the national. Yes. Perfect. We're gonna hold the item open. Thank you so much. Thank you. Now now move back to issue four.

Alright. Alexis Fernandez Garcia with the Department of Social Services. I'll respond to this issue area on CalFresh and other food programs. So the 25-26 revised budget includes 18,100,000,000.0 total funds in 25-26 for CalFresh nutrition programs, reflecting a decrease of about a $161,000,000 from the budget act of 2025. The total includes 13,200,000,000.0 in federal food benefits, which are not reflected in the CDSS budget.

These, decreases are primarily due to changes under HR one. The 2627 governor's budget proposes 17,200,000,000.0 total funds in 2627 for CalFresh and nutrition programs, reflecting a net decrease of 1,000,000,000 total funds. This total also includes 12,700,000,000.0 in federal food benefits. And again, the debt decrease is primarily due to, changes under HR one. In addition, there is a federal fund decrease and corresponding general fund increase due to the HR one changes related to the administrative cost sharing, starting 10/01/2026.

That is the decrease from 50 to 25% that we discussed earlier. With regards to the committee's questions about the impact and access to emergency food, because of the proposal to return to Cal Food funding baseline of 8,000,000, CDSX works with a network of food banks statewide to administer the state Cal Food Program. It provides funding to food banks who operate the emergency food program for the purchase, storage, and transportation of food grown or produced in California. Cal Food receives an annual baseline appropriation of 8,000,000 which CDSS allocates to this network of 49 food banks to serve, the whole state. Since 2223, CDSS's food bank partners have received 260,000,000 in Cal food funding, including 24,000,000 in baseline fine, funding.

As we move through the remainder of 2526, food banks see fewer resources on the horizon both from state and federal sources than they have seen over the last several years. We have heard from food banks that without additional cow food funding, they will be more dependent on philanthropic sources to backfill the loss. They may also have to limit the number of distributions or scale back the size of each distribution to stretch their budgets. As we previously highlighted, HR one will impact who is able to access CalFresh. And therefore, we anticipate that there will be a very likely direct impact on demand at local food banks.

Finally, let me provide an update on the CalFresh minimum nutrition benefit, pilot program. The minimum nutrition benefit pilot provides up to twelve months of state funded nutrition benefits to households who receive less than $60 in CalFresh or, CFAP food benefits each month. And, it's tied to those households that are eligible for the elderly simplified application project. We spoke about that a little earlier, and who have two or more members in their household. We implemented the pilot on December 1.

The last month for which data is available was February 2026. We provided just about 26,000 households with minimum nutrition benefit pilot supplemental benefits totaling about $900,000. My colleague Ryan, our chief data officer and deputy director of research automation and data will now provide an update on the CalFresh fruit and veggie pilot.

Hi. Ryan Gillette, chief data officer with CDSS. The California fruit and veggie project aims to increase access to fresh fruits and vegetables for CalFresh recipients. This initiative allows CalFresh participants to earn and redeem up to $60 per month.

Oh. Oh. There you go.

$60 per month in supplemental benefits automatically when using their benefits for eligible fruit and vegetables at participating retail locations. As of 03/14/20261,000 or or a hundred and 20,000 unique households have been issued CF and V incentives since the project's relaunch. These households have averaged about $45 a month in monthly incentive redemptions. And as of March 17 about $14,300,000 in incentives have been issued with the remaining balance of just over $20,000,000. The first phase of the CF and V program initiative ran from February 2023 through April 2024 and issued just over, over 10,500,000.0 in incentives.

CDSS was then allocated an additional 10,000,000 in the budget act of 2024 to relaunch the pilot. And the second phase ran from October 2024 through February and issued about $74,000,000 in incentives. Phase three then relaunched in November 2025 and is live. I do wanna thank all of the senators and assembly members who have supported this program over over the years. Right now, it is active in 91 retail locations and currently participate in 10 counties.

Santa Clara, Alameda, Monterey, Mendocino, Los Angeles, Orange Riverside, San Bernardino, Imperial and San Diego. And phase three also has one participating farmers market location in LA. Happy to take questions.

Thank you. Alejo.

Speaking from the perspective of the food assistance budget overall, we've reviewed the administration's projections and we find them reasonable. Although of course, subject to significant uncertainty. We'll be, revisiting all the projections that may revision and don't have anything further to add.