Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services
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Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services California State Senate
Follow its sittingsSpeaker 4
The governor's budget, incorporates these requirements, in the caseload beginning in twenty six-twenty seven. With regard to the work and community engagement requirements, this provision requires most nonexempt adults in the ACA, or the Affordable Care Act expansion population, to meet work and community engagement standards to maintain Medi Cal eligibility. The estimated impact to general fund in 'twenty six-'twenty seven is a cost reduction of about 102,400,000.0. Approximately 1,400,000 Medi Cal members, adults, upon full implementation, are projected to lose coverage, and for the budget year is an estimated 233,000 individuals. In terms of the programmatic impact, we anticipate increased administrative workload for counties, higher risk of coverage gaps for vulnerable adults, and a potential, increase in uninsured 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 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 'twenty nine-'thirty.
HR1 also amended, the definition of who qualifies for federally funded Medicaid, full scope federally funded Medicaid. This change goes into effect 10/01/2026. HR1 narrows the definition of qualified noncitizens that remain eligible for federally funded Medi Cal. If the state were to provide full scope coverage to this population, the projected cost is $786,000,000 general fund in the budget year, growing to $1,100,000,000 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.
HR1 also reduces retroactive coverage for Medi Cal. Today, 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 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. HR1 and the related policies, restrict permissible structure and size of the health care related taxes, including our managed care organization tax and our hospital quality assurance fee.
These changes really will have impact on the budget. And I know that there's 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 confirmation from the federal government that that is the case. But these these both of these provider taxes and the HQAF are vital funding mechanisms for the Medi Cal program.
With regard to actions taken to date and in the governor's January budget, we released an HR one implementation plan at the January. This outlines our strategy for implementing, particularly the eligibility and enrollment provisions of R. One, outlining our policies, having links to our all county directors' letters, also acknowledging that we are still awaiting future federal guidance, particularly related to the work and community engagement requirements. But the implementation plan provides detailed guidance on how we plan to implement these changes with the knowledge we have to date. We had two all comer webinars at the February to review the implementation plan with our stakeholders.
Over 2,000 individuals participated in these calls. As we've discussed previously in this committee, the guiding principles that we are using to really inform our implementation as we think about implementing HR1 is to automate to protect coverage, use state and federal and other data sources to verify eligibility whenever possible. We want to reduce paperwork and the administrative burden for our members, communicate with clarity and connection, deliver clear, plain language information in all required languages, ensuring that our messages are culturally appropriate, and clear to members, families, and their caregivers simplify the renewal experience, as we are streamlining the Medi Cal renewal process with clearer forms and simplified six month renewal steps to help keep members enrolled, educate and train those who serve Medi Cal members, provide counties and our coverage ambassadors, which we're at about 7,000 now, with training, practical tools, and ongoing support to assist members effectively provide timely and transparent communication to our members sharing updates through multiple channels so individuals have ample time to prepare for these upcoming, changes, and then streamlining processes and efficiency wherever possible. The budget also includes up to $4,000,000 for our health enrollment navigators, to provide kind of that in clinic hands on assistance for members with questions.
And then, additional $17,500,000 as part of a budget change proposal, which we'll go into in more detail later, for an outreach campaign, for 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 may be impacted by this. Just kind of this is more of the information sharing directing them to resources. And then, in the summer, we will be launching more of a take action type of campaign. With that, I am happy to answer questions.
Speaker 5
Good morning. Jennifer Troia, Director of the California Department of Social Services. As your agenda outlines, HR1 makes extremely significant changes to federal funding and eligibility rules for CalFresh, which is California's implementation of the SNAP program. These changes will affect millions of Californians who rely on food assistance as a basic safety net. We have talked about this before, and I will highlight again that we are approaching implementation with three commitments.
First, mitigating harm through timely decisions, guidance, and communications second, making evidence based, data driven decisions and third, maintaining transparency by engaging consistently with county partners and Californians who are recipients of the program. The Governor's budget estimates that once H. R. One is fully implemented, up to five fifty three individuals will lose CalFresh benefits. And by fiscal year 'twenty seven-'twenty eight, 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 both the federal and state budgets in the out years. Consistent with your questions, I'm going to focus today on two pieces: the expansion of the able-bodied adults without dependents time limit rules and the department's work to improve CalFresh payment accuracy. I will just briefly mention, though, that the governor's budget does include funding to reflect the change as of 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 means a $532,000,000 increase in our budget. Dollars $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 thirty six month period, unless they qualify for an exemption, meet the worker community engagement requirements, or live in a county with a federal waiver. HR1 keeps this structure but significantly broadens who's subject to the time limit and narrows who can be exempt from the time limit. Specifically, HR1 expands the ABOD age range to include adults up to age 64, lowers the dependent child threshold from 18 to 14, and eliminates exemptions for people experiencing homelessness, former foster youth, and veterans.
Exemptions remain for people with a child 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 HR1, American Indians. HR1 also significantly restricts the ability to qualify for waivers of these time limit rules. The waivers are now limited to counties with unemployment above 10%. 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 110,000 will ultimately be determined exempt after screening, about 179,000 will meet worker 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, are exempt based on data we have, and we continue to look 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 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 CalFresh administrative funding methodology. So, second item of focus is payment accuracy improvement, which, as we have discussed previously in future years, will have a significant impact on whether or not the state also has a percent of benefit cost share in the benefits which have historically been 100% federally funded. As part of the 'twenty five'twenty six budget, the legislature approved one time investment of $20,000,000 general fund to improve CalFresh payment accuracy. Under H.
R. 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 Truev expanded use of the work number, which helps us to identify earnings across household members and automation of a payment verification system to improve detection of unemployment and disability insurance income.
As our analyses progress, we will prioritize, among other, solutions to help improve payment accuracy. In closing, I'll say the changes to CalFresh under HR1 are far reaching, and we expect them to have significant impacts on food security, health, and well-being for many Californians. We are fully committed to mitigating harm, to supporting counties, and to maintaining access to CalFresh wherever possible, while also preparing for substantial impacts that we do still expect to see in the coming years.
Speaker 6
Morning. Will Owens with the Legislative Analysts 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 nineteen ninety one 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 inpatient 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 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, paid 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 subaccounts that serve that provide different services and fund these different programs. We'll kind of be focusing on what's called the health subaccount or health care realignment funding, and counties were eligible to provide both public health services and county intern care programs through this subaccount. So this arrangement continued until around 2013, where, in advance of the Affordable Care Act, the legislature passed a b 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 dramatically reducing the number of individuals served by county infant care programs, resulting in potential savings for counties as they no longer had to pay for the care for these individuals because they were receiving Medical. So, what AB 85 did is it redirected a portion of county's health care realignment funding that was originally used for, engine care to cover the, to offset state general fund costs 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 formula there, that gets a share of that gets 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 kind of give you an idea of scope, there was an estimated about 850,000 individuals being served by county engine care. So as more individuals have become eligible for Medi Cal 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 engine care currently.
So, enrollment for engine 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 engine care program as caseloads have declined over time. This would include things like increasing the income limit for individuals eligible for engine 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, h r 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 medical 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 insured 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 kinda going back to the redirection of AB 85 of health realignment funding, 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 engineering care programs. So while counties are likely facing increasing costs for engineering care programs, the structure of the a d 85, 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 health care costs without new or additional means of support. So counties have options to some options to mitigate cost increases for their engine 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 engine care programs, ratcheting back, the services provider 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 the increase in urgent 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.
Speaker 7
Good morning. Len Finocchio. I was contracted by the California Health Care 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 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 the 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 services 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 initiative programs, it should be mentioned, 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 counties participated in the Low Income Health Program, which was a part of the 2010 Bridge to Reform eleven fifteen demonstration waiver. County LIP programs, as they were called, provided a core set of benefits to some 650,000 uninsured Californians who then transitioned into Medi Cal in January 2014. These LIP 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 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 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 Medi Cal enrollees will lose coverage due to HR1 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 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 costs to provide health care through indigent care programs to individuals who lose Medi Cal due to HR1 restrictions. The anticipated enrollment ranges from $417,000 to $1,300,000 And the anticipated costs between 2,000,000,000 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 the CMSP governing board will have to assess the implications of increasing numbers of uninsured on the following: 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 Cal AIM 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 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 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 Medi Cal coverage, or would a more limited set of benefits suffice? How do the state and counties assure equity in the delivery of services across a patchwork of county programs? Issue two, how should these health care services be governed? Should 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 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 unassured 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.
Speaker 1
That's it. Great. You ended on my favorite topic. Let's get into it. I'll start with you, Will.
Do does all do all counties receive funding for Indigent Care?
Speaker 6
Yes. All counties receive 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
Speaker 1
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?
Speaker 6
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, if not all counties operated indigent care in some capacity.
Speaker 6
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 over engine care population, for a case for engine care population has dropped dramatically with some counties having no enrollment today. And and in other cases, because of the caseload so low, counties ended up expanding who is eligible for urgent care programs as well
Speaker 1
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 used, whether they paid for it from that specific health fund or any other type of fund.
And they have the ability to restrict what type of care and who gets indigent care?
Speaker 6
Yes. So as I mentioned, 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 urgent 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 thing the level of service required is much lower than what is offered by Medi Cal, for example.
Speaker 1
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
Speaker 4
I think EMTALA is a responsibility on the hospitals, and so hospitals have to provide that care, and they may not get reimbursed.
Speaker 1
So a county can restrict it so much and just say, Well, we're just going to go with EMTALA?
Speaker 4
It's just people showing up at the hospital, and so the hospital has to provide that care, that could be kind of the way a person gets the services they need.
Speaker 1
Okay. And, Will, since from 1991 realignment up to 2013 or even till now, there has the funding has been static and hasn't increased?
Speaker 6
So the funding for 1991 realignment is a portion of sales tax and vehicle license fees. So as that revenue grows, it flows through the different buckets. So it increases over time generally. And so what you see with a b '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 costs 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 subaccount, 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.
Speaker 1
Okay. And then this appropriate to how I'm understanding that some of that funding for the past, since 2013, counties have utilized for other programs?
Speaker 6
Yes. So counties, as I mentioned, are they're able to use that health subaccount, that health realignment funding, for both indigent care and public health services. So as counties' indigent care responsibilities, or rather their caseload, has declined, their amount of funds they need to spend on insurance care programs has also declined. So that remaining amount that's in the HealthHUB account would then be used for public health.
Speaker 1
Okay. Both of you shared numbers, and I'm trying to find. If about two point two million people are gonna lose Medi Cal, but indigent care will maybe only jump to one million, Where are the other one point two million?
Speaker 6
So, obviously, when it comes to projecting the number of individuals disenrolled and and from Medi Cal under h r one is highly uncertain. There's a lot a lot of variabilities in there, you know, including, the state's efforts to, exempt individuals from those from those eligibility requirements. Right? So there's some uncertainty there. Second layer of uncertainty is how many of these individuals will then receive care accounting engine 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 urgent 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 urgent 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 and moving parts when it comes to the number of individuals enrolled in any one time for county urgent care programs, and I think that may be where some of the numbers can get a little difficult to pinpoint.
Speaker 1
Okay. Thank you so much. Director Trejo, You you gave in 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?
Speaker 2
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.
Speaker 2
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.
I was trying
Speaker 2
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 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.
Speaker 1
If senior 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 him if they start collecting their social?
Speaker 1
Yeah. It's only a disability. Not even. So you're like, hey. I retired.
I no longer have this is my static income. They have to now prove eighty hours of volunteer or something. Yes.
Speaker 5
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 or rehabilitation program. So
Speaker 1
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 thirty six month period.
Speaker 2
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 HR1.
Speaker 1
I know this is going 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 going to stop getting that increase? So
Speaker 2
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 thirty five 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 thirty six 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?
Speaker 1
Okay. For both departments, can you talk to me how we're gonna capture those on domestic work? House cleaners, child care workers who are on MediCount and CalFresh. They get paid cash. How do you
Speaker 4
So we do just we collect income information and we do have kind of an 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
Speaker 1
be captured. Hours. Yeah. 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 Oh, no. You My own affidavit.
Correct. Okay. A sworn statement that you I'm self attesting. Essentially. That I clean this and this is the amount I get if I get paid cash.
Okay.
Speaker 5
And if I can add, one of the things that we're doing in our payment accuracy efforts is creating a new tool. I mentioned it. It's a company called Truev, and it allows for an easing of the income verification. So, with consent of the participant, we can actually access temporarily, for 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.
Speaker 1
Are you applying that same approach to the UIS population? It's across the board.
Speaker 1
For the UIS population, though, you have even more no 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 going to be the largest population that's going to fall off.
Speaker 2
So under HR1, we mentioned in our talking points that the exemption that existed prior related to people who were experiencing homelessness no longer exists. Under that exemption, just that experience and the information in the file that you are homeless would have qualified you for an exemption. After 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.
Speaker 9
So, in Medi Cal, HR1 does not have a similar exemption, and there is no ability to request an exemption for people experiencing homelessness.
Speaker 9
primarily, the strategy to protect individuals experiencing homelessness from losing Medi Cal coverage primarily would be through the medical frailty exemption. Not exclusively, but we think that will be a large driver. And we know that this population may not be accessing health care today. And so our ability to exempt them on the basis of medical frailty through an ex parte process or just using data that we have will be limited. And so they're vulnerable.
So our goal really is to make sure that the services that are in place today, the benefits in Medi Cal that are designed to reach this population, such as enhanced care management, street medicine providers, clinic navigators, are right there and able to assist them with the self attestation process as part of the initial application, as well as through the renewal process. So the goal really is to make sure that these individuals have the touches and the assistance with getting their medical frailty captured as part of their application, And then also, ideally, through the billing and service data that we can get through care provided to them that we can then use automatically to exempt them.
Speaker 5
Okay. If I could just add for a moment. As we were talking about earlier trying to maximize, I think DHCIS 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 possible in a bidirectional way. So there is under HR1, if someone is exempt from CalFresh or CalWORKS work requirements, they are exempt from the Medi Cal requirements.
It does not work the same in the other direction under HR1. 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.
Speaker 4
Yes. Will be using DDS data, for And just to kind of double click on that, so 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.
Speaker 1
Should double work on that. Okay. Going back to the UIS population and the application of the work requirements, specifically in the undocumented within the UIS population, they would have to certify that they are working with an attestation.
Speaker 9
So the attestation would allow them to certify that they have 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.
Speaker 1
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?
Speaker 1
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
Speaker 4
where they're working, they won't know Correct. The affidavit is really kind of a checkbox type of document. Okay.
Speaker 4
I'm glad we got those extra six months. Are there any creative ways in supplement? So, 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 Medi Cal program as a result of MC over the last few years has been about 7,000,000,000 Under HR1 and Prop 35, really, 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.
Speaker 1
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?
Speaker 6
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, not a lot of great data is available on that.
Speaker 1
Okay. And to whomever, maybe LAO or permanent finance, have we quantified 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?
Speaker 6
Medicare? So the the big issue with the eligibility requirements, that are being enacted is they'll likely have an outsized, impact on the ACA expansion population, which, as you know, is, 90% covered by the federal government. So for every individual, who is eligible for Medi Calendra 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 into other areas of the California health care sector, whether it's hospitals, counties, clinics.
Basically, any provider or entity that receives reimbursement for Medi Cal for individuals would likely be impacted financially by this disenrollment.
Speaker 5
On the CalFresh side, we estimate the total reduction in benefits in 'twenty seven-'twenty eight to be $1,600,000,000 As I mentioned before, though, the benefits are currently 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
Speaker 4
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're really not able to quantify at this point.
Speaker 1
Okay. And I brought this briefly up in the bigger budget hearing around a
Speaker 1
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 remove the savings and further increase the structural deficit? What's the incentive for departments?
Speaker 5
I would say on the CalFresh side, I mean, we are extremely committed to 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 the end of the day, we want to get as many people who are eligible continuing to be enrolled, and we will fund the administrative funding.
Speaker 9
And similarly, we share the moral commitment. We work at the Department of Health Care Services. And so while we recognize that reduced caseload does represent savings to the budget, we are taking every step we can to mitigate harm to our members as a result of the changes in HR1. So, one illustrative example where I think the state budget and the moral commitment align really is work requirements because they particularly impact the Affordable Care Act expansion population, which has a 90% federal match rate. The estimates that you heard today about the 2,200,000 members expected to lose coverage as a result of HR1, 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 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.
Speaker 7
And I'll just add that of those being disenrolled, they are going to end up in their county system, mostly episodically at first, and they're entering this patchwork 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
Speaker 6
And then just to kind of wrap things up, yes, there is, like, a there is a a slight state savings for individuals disenrolled, but as stated, there are other costs within h r one for for the state, namely around provider taxes that result in a net increase in state costs due to the effects of h r one. And then any individuals while disenrolled from the Medi Cal program, they would, you know, they would still require health care in certain settings, and that would increase costs throughout the rest of the system as well.
Speaker 1
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, yeah, the revenues depending on those two funds fluctuate and could increase, it's a lot more they're gonna be doing. And I think I I asked this question also, you know, director Seppenschag 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 do you believe that they're ready to go?
They have the support needed with all these changes.
Speaker 5
So I'll say a few things, then Alexis, please feel free to add. So first, I will say I do want to clarify that we do provide funding related to the implementation of the ABOD time limit. I think the counties are disagreeing with us about the amount of that funding. So, we assume that it takes a certain amount of time to screen individuals. Believe it will take longer.
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 with a 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 ABOD time limit, much less implemented it on a statewide basis, and for people, who are experiencing this level of vulnerability.
So, we are doing a lot to work with the counties in preparation in terms of the guidance for releasing the work groups with community members and with counties, the communications we're planning. It is an all hands on deck on our part and on the county's part to prepare, but I also don't want to underestimate that it is very difficult to feel ready. I will also emphasize that we are implementing as of June 1 because that is the time it takes to automate the implementation. And I will acknowledge that many other states have gone before us in implementation and that we have taken the time that we believe is necessary to implement on a consistent basis and with the automation that is required. And then also acknowledge that as I was describing, most individuals will receive that screening over a twelve month period.
So, it does also give us some time as we ramp up to full implementation.
Speaker 1
And, Doctor, to the first point you mentioned, has someone from the state gone to different counties and done that? Like, how did we get to that number?
Speaker 5
We have not really been implementing the ABOD time limit in a really long time, so it is hard to say. But a few years ago, we did a reassessment of the CalFresh administrative funding that was required by the legislature. It resulted in a significant increase in CalFresh administrative funding. And one of the things that we did in that process was survey the counties on the time it takes to complete certain tasks. That included screening for ABOD time limit for individuals who are eligible.
Though, again, the counties were not implementing at the time in significant significant portion. So I think part of what they are expressing, and you'll probably hear from them, is that they believe that that survey is not as recent or as helpful as it could be in identifying the workload for this implementation. That said, the rules of the ABOD time limit itself have not changed. It's who it applies to that is dramatically changed. And given that, we are asking them to conduct thorough screenings to try to really dig in and identify as many exemptions as possible, and that process is admittedly complex.
So, I think that's some of what they are pointing out to us.
Speaker 4
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 significant engagement. I think we visited every single county during that process to really on the ground hear how things were going and plan to do that again as part of HR1 implementation. As we noted in the governor's budget, we did not have a proposal to fund county admin 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 HR1, but because of some of the 2025 budget actions as well. And so, continue to work on that with our counties. I know it's a broader conversation beyond the Department of Health Care Services and just what does county engine help mean.
And given the state's fiscal constraints in the out years, how to think about that as well. Doctor, I'm going give you the
Speaker 1
last words here. You provided some options that counties can look at or will be looking at. I don't know if any of you in any of your work, there can be an assumption on what you anticipate maybe what counties most likely would be doing?
Speaker 7
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 going to be this patchwork across the state, except for those 35 I rural would like to see a standardized program administered in a standardized way, perhaps between the state and the counties, with a standard benefit package where you use the Medi Cal managed care network of providers to organize and deliver the services.
So, if you are in Medi Cal now, you lose your enrollment, you move on to a county uninsured program that looks largely like Medi Cal. I know that's really dreaming big, but that would be ideal and address some of the equity issues that are raised
Speaker 1
in my paper. Thank you so much. I appreciate you all. Alright. Moving on to panel two.
We're now gonna hear from the county programs. Our 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, 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.
Speaker 12
Good afternoon, chairman. I'm Jackie Contreault. Oh. Is it on? Okay.
Good afternoon, Chair Mengevar. 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 $20,000,000 for CalFresh eligibility in the current year, and the CWDA requested $373,000,000 investment for CalFresh and Medi Cal eligibility workers in this budget, we will bear witness to significant distress as a consequence of inaction, a painful setback for the progress we have collectively made. Moreover, the unmitigated impacts of HR1 will be disproportionately felt by LA County residents. By example, we represent 32% of all Medi Cal enrollees statewide who will require manual verification or exemption. And you heard earlier from the departments how involved that process is. More than a quarter of a million CalFresh recipients will now be subject to work requirements, including 81,000 unhoused individuals in LA alone.
And thirty two percent 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 8,600,000 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 Kallisaws 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 seven fifty 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 20,000,000 to support counties to implement the CalFresh changes that are just ten weeks away. And please support the $373,000,000 investment CWD is advocating for to add more CalFresh and Medi Cal eligibility workers in this budget to keep those we serve connected to lifesaving benefits. I want to thank you for your leadership and partnership.
It is critical in helping us find effective, compassionate pathways forward to effectively and equitably serve our neighbors across California.
Speaker 13
Chairman Givarr 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 want to speak to what HR1 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 nine eleven 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 2,200,000 patient visits, and about eighty percent of our patients rely on Medi Cal. I want to emphasize this point. More than eighty percent of our patients rely on Medi Cal.
That is the highest percentage of any hospital system in California. Therefore, the impact of HR1 is disproportionately felt by LA Health Services. We are facing an unprecedented challenge. The costs of health care are shifting without a clear answer of who is expected to take on these costs. We expect six hundred and sixty thousand people in Los Angeles County will lose Medi Cal.
But they will not stop needing health care. 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 health care 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 health care 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 $700,000,000 a year, and a deficit of $2,000,000,000 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 health care systems.
We need your help to save our safety net and prevent deeper instability across the region's health care system. Because when the safety net is weakened, the consequences reach far beyond our hospitals and clinics and will impact the 10,000,000 people that call LA County home. Thank you.
Speaker 14
Good afternoon, chairmen of our 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 one 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 2,000,000 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 Health Care, which is the largest public health care delivery system per capita in the state, the largest in Northern California. We have four hospitals and 15 clinics, two trauma centers, one of only three comprehensive burn centers between Los Angeles and the Oregon border. And we are the single largest provider of health care services both for Medi Cal beneficiaries but also for Medicare beneficiaries in Santa Clara County. Medi Cal is our single largest revenue source for our health care delivery system. And HR one is projected to result in over $1,000,000,000 a year in lost revenue to our health care system.
We are facing this crisis head on. In Santa Clara County, we have moved swiftly in response. Our community brought forward measure A, an emergency sales tax measure which received overwhelming public support. It is the most we can legally do in asking our local voters for revenue support. And though critically needed, the 330,000,000 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 health care system to increase efficiencies, to take actions. And this mid year, our board of supervisors adopted 200,000,000 in ongoing reductions including the deletion of hundreds of positions in our health care system to maintain a balanced budget. And so we need deep partnership with the state. We're not coming asking for a handout. We're coming in seeking partnership and asking the state, even though it cannot eliminate the devastation being brought by HR one, To work collectively with counties to mitigate, not exacerbate those impacts.
We urge the legislature to move swiftly in three key areas. The first, which was I know the focus of a lot of discussion in panel one this morning, is to preserve enrollment in Medi Cal and CalFresh. And the committee heard about just how much federal funding is at stake with preservation of enrollment. The work rule requirements and more frequent eligibility redeterminations are going to impose huge numbers of coverage loss. We are very concerned about that.
And we're also concerned that the state is exacerbating that harm with the changes that have already been made and the changes that are proposed to be made to the state only Medi Cal program which just in our community alone provides access to health care for over 70,000 individuals. We support Senator D'Arzo's SB fourteen twenty two to end the enrollment freeze on state only Medi Cal and restore full scope coverage. We're grateful that the state agencies, as you heard today, are moving forward with as much as possible automation. We urge that to continue swiftly, but that is not going to be sufficient. We know that for many of these populations there will need to be handholding.
And that means resources and support on the ground at the county level with eligibility workers and employment counselors and others to help people navigate through these work rule requirements. We are doing our end of things. Our departments are working collaboratively much like in LA County. Our parks department for example partnering with our social services agency on ensuring access to volunteer and other opportunities. We have partnered with our labor unions, including specifically SEIU, on changes in how we do our work with our eligibility workforce very collaboratively to be ready for and to move forward with these extraordinary changes being brought by HR one.
But we also need the legislature to support the California the County Welfare Directors Association's ask for 373,000,000 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 health care services obviously to Medi Cal beneficiaries as you heard from my colleagues in LA County.
But these are critical services that are provided and available to all Californians and that form the backbone of access to health care for all Californians. There are a number of specific cuts in HR one 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 statewide public hospital resources remain available for Californians.
And then finally, you heard about the relationship between the state and counties on indigent care. Yes, counties have this obligation under section 17,000 of the welfare and institutions code. The reality is post proposition 13, which was one key piece that was left off of I very much agree with the LAO analysis that was presented this morning. But one key data point on that timeline that was missing was the passage of prop 13. That is how counties became dependent on a fiscal relationship with the state and unable to on their own raise adequate revenue to support obligations like section 17,000 that existed since the 1930s.
We rely on that state funding to support public health, to support indigent care, and we will have to revisit what that relationship looks like. And let me share one sobering stat. Before the Affordable Care Act expansion in our county, over 20 of our patients were uninsured. Post expansion, it's about two point five percent. So the state was right in revisiting the fiscal relationship for indigent care with the Affordable Care Act expansion.
Now sadly, we're going to see much of that progress lost and that will again require revisiting the fiscal relationship between the state and counties to ensure continued access to care. So we're grateful for your leadership and your support. We urge you and your colleagues to recognize this crisis for what it is and to act with the urgency necessary given the timelines. You heard about nine months to hire an eligibility worker, that's true. The timelines to put the things in place to try to mitigate these harms on Californians.
Thank you so much.
Speaker 15
Good afternoon, Chairman Jevar. My name is Jason Britt. I'm the county administrative officer for Tulare County. And I've served Tulare County for thirty one years and I'm proud to say I started my career as an eligibility worker. And I also was the director of our indigent care program pre ACA.
HR1 represents a fundamental shift of fiscal responsibility for safety net programs from the federal government to states and counties, with counties facing billions in costs annually increased due to this. Costs including costs to reinstate indigent health care, as you've heard recently, for the sickest, low income adults that lose coverage, new workload requirements associated with CalFresh and Medi Cal eligibility determinations, loss of federal revenue supporting public health hospital public hospitals and public health. And also, I'm very concerned about sort of the going backwards and the progress that counties have made a lot with the homeless and behavioral health advances. Tulare County, absent investing in our eligibility workforce to mitigate disenrollment, it's estimated that 22,000 or more are at risk of losing their Medi Cal coverage. And of those, we estimate 7,200 individuals may become eligible for a county indigent health program.
California law eliminated Medi Cal eligibility for medically indigent adults and created the county responsibility under Welfare and Institution Code 17,000. And then in 'ninety one, the state legislature realigned programs and created an ongoing revenue source for those programs. When ACA was implemented, the legislature passed a b 85, which you've heard a lot about today, which redirected dollars realignment dollars away from counties to other state priorities and significantly slowed the pace at which our revenues grew, ultimately shrinking resources available to us today. And back to Will's comment earlier, almost all 1991 realignment in the health subaccount that was used for indigent care has been clawed back. Most of that money that happens in AB 85 today, I would say, from most counties' perspective, is public health support.
Today, without action from the legislature to restore and increase funding for realigned indigent care programs, Tulare County faces paying for indigent health through the few dollars the AB 85 formula provides to public health and county general funds. To the extent that county general funds must be used, this will come at the expense of cutting countywide services, including reductions to fire and sheriff. Pre ACA, Tulare County operated ARC program that served about 1,400 individuals at a cost of about $8,000,000 annually. If assume higher inflation over the past several years and more individuals who need to be covered, we estimate it will cost us between 30,000,000 and $40,000,000 annually. Tulare County, like many Article 13 counties, do not participate in the county medical services program and do not operate a public hospital system.
And we have effectively dismantled our programs because most are all qualified for Medi Cal. And as a designated health care professional shortage area, Tulare County will struggle to attract and retain sufficient providers, will be so it will be extremely difficult to care for this population at our two county clinic locations. I'll also need to employ eligibility workers, nurses to authorize treatment, claims processors, analysts to negotiate contracts, just to name a few. I'll need to reestablish all of this infrastructure, including facilities, supplies, equipment, and technology, all before 01/01/2027 with no money. Respectfully urge the senate to work with the counties to restore funding for urgent health care, or the state could create an alternative program that would include maintaining coverage for individuals that lose coverage due to work requirements that would provide emergency services and a very narrow set of restricted services to prevent the triggering of Welfare and Institution Code 17,000 mandate on counties.
Counties are not able to address these impacts impacts on our own, and a true partnership over a multiyear period with the state is needed to prevent the crumbling of our safety net. Finally, I am deeply concerned regard concerned about my county's ability to meet the county's share of costs for Cal CalFresh administration as a result of HR one. As as of October 1, the federal government sharing will change, and automatically, that will cause an increase to the county's and state's share of CalFresh admin funding. Many counties, including my own, will be unable to increase our match overnight and require temporary relief to ensure we can continue serving clients and help them retain the benefits instead of being forced to make deep cuts to our CalFresh program. A CalFresh match waiver is a tool the state has used during the Great Recession and COVID pandemic that maximizes state general fund while minimizing inequities.
The CalFresh match waiver would not eliminate the cut, but it would reduce the info fiscal impact. I ask you to consider the including the CalFresh match waiver to allow counties to adjust to the new realities of h r one. I recognize you have a daunting task ahead of you. Counties are not able to impact to address these impacts on our own, and a true partnership over a multiyear period is necessary. County associations and counties stand ready and willing to partner and explore the best solutions for all.
Thank you.
Speaker 10
Good morning, Chair Minjavar. Thank you for the opportunity to speak on the anticipated impacts of HR1 in San Bernardino County and the communities we serve. Today, I will outline the scale of our programs and the operational challenges counties face in implementation and the resources needed to best align our opportunity to strengthen rather than weaken California's safety net. My name is Gilbert Ramos, Human Services Assistant Executive Officer for San Bernardino County, and I serve as the county welfare director overseeing Medi Cal and CalFresh in the largest geographical county in the nation and one of the largest counties by population in California. San Bernardino County represents roughly 5% of the California households, but about 6% of the 2,000,000 households receiving assistance in CalFresh.
Since 2022, demand for food assistance has increased by about 6%. As of January 2026, Calfresh serves more than 366,000 residents. Nearly 70% of the recipients are Latino or Black, and Calfresh provides roughly nine out of 10 meals in the emergency food system, which includes our food bank partners. Through efforts of our eligibility workforce, as well as deliberate partnerships with managed care plans like IEHP, we have reduced the uninsured rate from nearly fourteen percent to eight percent. Medi Cal now serves more than 950,000 individuals in San Bernardino.
These figures reflect both scale and vulnerability. When rules change, impacts are immediate as well as widespread. As we've been talking about this morning, HR one introduced significant changes, including work requirements, changes to eligibility related to the immigrant status, and more frequent redeterminations and shorter renewal cycles. These changes increase daily workload, requiring staff to process applications and renewals, follow-up on incomplete submissions, and conduct outreach to hard to reach populations and coordinate with many partners. Staff must also take on new responsibilities like applying these work requirements that we haven't had to do in many years, verifying exemptions, tracking compliance, and managing more frequent case actions.
We estimate that twenty seven percent of CalFresh recipients are at risk of losing benefits. And in Medi Cal, with the increased administrative churn among the ACA expansion adults, it likely rise our uninsured rates. And with forty four percent of our residents relying on Medi Cal, administrative coverage loss directly worsens health outcomes and increases the uncompensated care rate that will likely be required to pick up locally. Without adequate resources, HR one will increase staff workload, increase our customer interactions, and will require tighter coordination across our systems. This increased risk of administrative coverage loss is all that is.
It is not true ineligibility. So what this translates into is additional staff and system capacity needs, more intensive eligibility level case management, and increased administrative complexities. We estimate that in order to accomplish this, we're we need about 580 additional full time staff. With adequate state funding, recruitment can begin immediately. Without it, implementation will be hampered.
HR one also increases the county share of CalFresh administration costs by 50%, changing the match from 50 15% to 22 and a half percent. This is gonna cost San Bernardino an estimated $10,700,000 over the next two years and then ongoing every year after that. Many counties lack the revenue to absorb this increase as was just mentioned. We respectfully request to support for a cost neutral CalFresh match waiver to stabilize operations and prevent reductions in service during implementation, thereby ensuring counties can focus on effective and timely service delivery. Further, it will help avoid deepening disparities by reducing administrative churn among populations already facing disproportionate barriers.
San Bernardino County is already acting in ways to reduce administrative loss. We are data sharing and outreaching with our IEHP partners and other managed care plans where we do outreach and coordinator interventions with aligned messaging. We have early warning systems in which we're tracking trends and intervening early our so beneficiaries will not lose coverage. And we have internal coordination across our human services departments to where we can conduct renewals timely and ensure that our beneficiaries do not lose coverage. As well as we recently implemented a co investing opportunity in order to have staff prepared specifically for Medi Cal eligibility along with Inland Empire Health Plan.
These strategies reflect lessons from the continuous coverage unwinding that outreach must be frequent, multi channeled, and targeted. Within CalFresh readiness, the ABOD requirements will increase the need for outreach, verification, and case management. Our approach focuses on maximizing exemptions and minimizing administrative burdens. We are updating staff training, improving client materials, and launching targeted outreach to individuals who will not meet the work requirements, who may not need to meet the work requirements, for individuals who are going to be exempt, and for individuals who need support maintaining those benefits. Without sufficient resources, the consequences are direct.
A working parent could lose CalFresh due to misverifications. Seniors could lose Medi Cal due to confusing renewals, or a person experiencing homelessness may just may restouch on the out miss on the outreach entirely. These are preventable out administrative losses that we have to avoid. Our county stands ready to implement HR one as so as so do many other counties, and we are doing what was at we are doing what is in our authority to do so, but readiness alone is not enough. Without sufficient resources and a cost neutral match waiver, the burden will fall on the families that we serve and the staff supporting them.
Thank you for this opportunity to provide my testimony and for your participating, ensuring that our counties can implement HR one in a way that protects access to the food and health care that we provide. Thank you so much.
Speaker 1
Thank you so much. I appreciate everyone's testimony here. I'll start with, Tulare, mister Britt, and mister Ramos. You both mentioned the match waiver. Could either one of your explain or what happens if you don't put up the extra 7.2%?
Speaker 10
7.5 What what pretty much happens is that there will be a reduction in overall funding. That's what it boils down to. Because with with the way the match waiver works is that there is funding available that the the feds the feds shifted, if you're if you're familiar with how it shifts. It used to be fifty fifty, and now it's twenty five seventy five, and then that 75 is split between the state and the counties. So whatever amount we don't put up, whatever the amount the counties don't put up, that is money that's out of the CalFresh administration.
That's money that's going to be lost from the state that matches as well as what the Fed matches. So we may not without a mathematical calculation, if you will, overall, just because we don't put up our 7.25%, what will also happen is that we lose state and federal. So it's force multiplier that we lose altogether. So, I mean, if if we just say, you know, just easy easy math, just like, if we don't put up, like, our our our an extra seven and a half percent, we possibly could lose an extra of, I don't know, like like, ten ten or 15 more percent on that because of the the match that we don't get with it.
Speaker 1
So if the state before but it so if the the state is gonna cover their extra, their part, And if the counties don't, the state doesn't give the full amount to y'all?
Speaker 15
Right. There's a there's a statutory match that happens. And so what what happens sort of in practice is you can't draw down those additional. So if I don't have an extra $9,000,000 to put in for that 7.5 increase, then I don't draw down those dollars in order to support the program. So then, essentially, what I am what I'm stuck doing as a administrator or a welfare director here is probably not covering the caseload.
Right? I'm not actively working cases. I'm not probably processing things. I may not be enrolling people because that's how we pay for staff,
Speaker 15
Potentially. Potentially, just, again, you have to size your program to the dollars. Right?
Speaker 10
So tangible consequences could include there'd be less dollars for staffing, for resources. That would result in potential impacts to the error rate that we're trying to mitigate and keep low. It could impact timely processing of applications. The administrative dollars fund our staffing. That's, for the most part, what what it funds.
And so if we do not have funding for our staffing, staffing is who does the work. And so if we do not have staffing to implement the ABOD requirements to do the cases, the applications, it is fewer staff to do more work that we've already talked about this morning.
Speaker 12
Yeah, I wanted to add because So, we're one of the counties that have not secured that match. And if we don't secure that match and we lose both the state and federal funds, our estimate is that's $250,000,000 loss to our current program. This isn't to expand it. It's just to maintain it. That translates to 1,500 staff.
And for us, that means likely layoffs. There is no way that we can sustain the program without those additional dollars.
Speaker 12
Let alone add more people. So this is just to try to maintain it. And if layoffs do come, that means, as my colleagues have highlighted, that means that we will not be able to be as responsive. That means longer wait times in the offices. It means longer wait times on the phone.
It will make it incredibly difficult to maintain all the access points that are helpful. And then it consequently will impact the error rate. And the error rate means penalties. So, that's going be additional cost. So, it just sort of feeds on itself and continues to get worse.
Speaker 1
Okay. I forgot someone who mentioned, maybe it was you, the supporting CWDA's 373,000,000 ask. You also shared that your measure a that you passed is bringing in
Speaker 1
With that, and if the county's got the additional $3.73, would you be made whole? No. Or would you still be a gap?
Speaker 14
We still have an extraordinary gap. Our projection regarding HR1 impacts to our health care system alone is well over $1,000,000,000 a year in lost revenue. And that's from a variety of HR1 related causes, some of which are related to enrollment loss, which has been discussed extensively today. But there are other HR1 related cuts that were alluded to by the DHCS director, including cuts to directed funding that goes to hospital systems specifically and that disproportionately harms public hospital systems. Okay.
Speaker 1
And so the three seventy three across the counties is just the bare minimum for y'all?
Speaker 14
That that three seventy three, by the way, that number is a statewide number.
Speaker 14
Across the And the numbers I'm talking about in terms of the billion dollar impact is just a Santa Clara County number.
Speaker 1
Yeah. Okay. Mister Orozco, you I'd love if you can. I think you talked a little bit, but I'd love more details. Some examples of how what changes you you briefly, brushed up or what changes you are taking as a response to all this.
You know, the state, we're taking we're doing a lot of cuts. Right? We're biting, tightening the belt. So if you could share some examples of county skin in the game as well. Yeah.
I can I
Speaker 13
can share my perspective as a medical center CEO and what we are doing? We have implemented across the board hiring freeze. We have significant reductions in registry and overtime utilization. We're reducing purchases where we're able to deferring non essential capital and deferred maintenance projects. We're also seeking increased rates and contracting opportunities so that we can bring in more revenue.
And we're launching a comprehensive multi year strategy to improve billing and collections. In addition, LA County has, as you know, has proposed a tax measure that will bring in to the county about a billion dollars a year. And of that, about $220,000,000 will go to our system, LA Health Services. Now, when we're projecting over a 700,000,000 Or dollars
Speaker 13
45% will go to reestablishing a county indigent program. And but I do want to emphasize, you know, we're projecting a $700,000,000 shortfall per year. That is very helpful, but it will not solve that.
Speaker 1
Ongoing. It's Okay. Yes. Oh, yeah. So 750 is just specific to your part, and you're only gonna be getting 220,000,000 of that.
I see what you're saying. I'd I'd love to hear same question of other counties. Santa Clara, you gave me a little bit of example of what you're doing already.
Speaker 14
Yeah. We're doing a lot on the budgetary side. So as I mentioned, we've already brought forward $200,000,000 in ongoing budget reductions in our health care system. We have had a very significant hiring freeze countywide in place since the passage of HR1. We have already cut hundreds of positions in our system.
We are consolidating service lines and pursuing a number of the things my colleague from LA County mentioned, including revenue opportunities where available. One of the challenges for these public hospital systems is that Medi Cal represents such a large percentage of our revenue. And so unlike private and nonprofit systems that have more ability to cost shift to other types of payers, for example commercial insurance payers, they represent such a small percentage of our payer mix that while we're seeking those opportunities too, the reality is there's just not a lot there that we can do given how significant a role we play as safety net systems and how significant Medi Cal specifically is as our primary revenue source.
Speaker 1
You mentioned something I was going to follow-up in your opening remarks. You talked about the private hospital parity. Can you explain that a little bit more?
Speaker 14
Back in 2,005, the state made a funding change in the Medi Cal program where it required counties to put up the state's match in Medi Cal for inpatient hospital stays. So the way the Medicaid program works, you get federal money but you only get it if you put up state match. The state provides that match for inpatient hospital stays for private and nonprofit hospitals. But since 2005, for public hospital systems, we have to pay the state match. And so one of the concrete and specific proposals that we are asking the legislature to move forward on, and this is a proposal being brought by all the public hospital systems, is to give us parity with the private hospitals and have the state fund the state match just like the state does for private systems for those inpatient hospital stays for Medi Cal.
Great.
Speaker 15
Too. I just wanted to add, thank you for the opportunity. We are doing a number of things as well to try to prepare for HRO1, including we are already a health and human service agency, so we have a lot of good cross collaboration. We're focusing on how do we prevent disenrollment, how do we keep people on, is there other types of waivers that are available to us that we can pursue. But specifically, we're also trying to think about how to the reality is we have to think about how do we stand up this indigent care program that hasn't existed since 2012, 2013, and the complicated fiscal relationship we have with the county vis a vis AB 08/1991 realignment that provided some of that funding that's now been shifted away.
And so we're just trying to really grapple with that, leveraging our federally qualified health care clinics and a number of ways to get ready. My county, unfortunately, is a Central Valley county. We are not a high income county, so adding local measures, like many of my colleagues have done, is not a good opportunity for us because a lot of our cities are already at the state maximum and or will be, if their current sort of initiatives are successful. And so that's just not really an option for a county that serves a lot of agriculture based
Speaker 1
You mentioned in your opening that you were leading the indigent care when you How was does one enroll?
Speaker 15
So the way it worked pre ACA was you would enroll through an eligibility worker stationed at our human service office. They would assess you for all the programs, and ultimately, this would be the last resort program. And basically, you were able to get some level of primary care at the county clinic. That's the only provider we allow in the system. No other private clinics, no other private providers, just the county clinic.
But it was primarily a system that you came through us through the emergency room. The hospital calls us up and says, I got this indigent patient. They received this life sustaining care or whatever, and you've got a $300,000 bill. How are you going to pay it? And so a lot of them, unfortunately, pre ACA, came through a lot of the emergency room route because the hospitals also look at how do they capture those costs.
And so we anticipate it might be similar going forward because, again, because it's a last resort program, a lot of people don't seek this out. They just go without until they end up in a situation that's life threatening.
Speaker 1
I also wanted to see if you could expand. You mentioned something, or if I understood correctly, preventing the trigger of Welfare Code 17,000. What did you mean by that?
Speaker 15
So what I meant by that was, some of the previous panelists talked about how in county indigent programs, the eligibility standards, the aid, how it's administered, vary. And they were really talking about standardized care. Right now, under Medi Cal, you have a standard system. Right? The the the challenge with standardizing eligibility and and all of that in article 13 county like mine that was sort of talked about in the previous panel is that that just increases cost, and it doesn't give you flexibility to manage the budget, which is what you gotta live with.
Right? Because I may have to give you a larger set of services than I than I want to. So what I'm what I was suggesting in my comments is, you know, because I was a former eligibility worker, I know the state has restricted Medi Cal aid codes. So could the state keep these individuals in a restricted Medi Cal aid code and a limited set of services that would not put them back on Indigent Care. They would have standardization across the services.
They would already have a system to be a part of. And that is just another way that this population could be managed, similar to what we do with a lot of our populations today that don't qualify for full scope Medi Cal. Great.
Speaker 1
Thank you. Director Contreras, we heard about the automation hopefully reducing the amount of work on eligibility workers. I don't know what percentage that equates to, but what do you anticipate given what you've been hearing on the automation where eligibility workers are still going to be needed in the heavy work case work? Yeah. So I think
Speaker 12
this is really a situation where it's a bothand conversation. Even in our current environment, the automation is needed to streamline a lot of the eligibility work. What you heard earlier was we may get something that has I think it was true of what was talked about. So we may get something that sort of verifies a person has a certain income. The eligibility worker will very likely still have to verify that.
Somebody has to touch that when it comes in. So, it helps. So, we don't have to necessarily pursue that information. We're getting it. And now, we can verify it with the customer.
So, are some of the things that we see. A lot of times, this work is invisible to people. BenefitsCal is a great tool for people to be able to apply. But there are people behind the scenes that have to process all that information. And so, that's where a lot of the workload comes in.
Speaker 1
And for the worker requirement, how can, like, the programs under CalFresh, the employment training and what was the other one? The yeah. Employment and training program help in in connecting people to meet the eighty hour a month? Or is there other things that counties have in place to help?
Speaker 12
So we're actually creating trying to create a system outside of Kalsas because it's really about an individual finding that opportunity to either work or volunteer in order to meet the requirements. And so we're trying to develop a system that we can capture. So, we'll use a third party administrator. We're working with philanthropy to come up with dollars to be able to pay for this so that people can go in, they can find opportunities, we can recruit people to be a part of it, and then we can match them. And that's one way that they will be able to meet their eligibility.
Okay.
Speaker 1
Any other feedback on how you anticipate your county is helping them meet their eighty hour work?
Speaker 10
One of the ways that we're working in San Bernardino is like with our CalFresh E and T plan, our program, we work with our workforce development board, and we have opportunities to place them, train them, place them, have them meet their work experience that way. So we think that we could probably expand that to help meet before, we haven't had to have them meet their work requirements. It was just an opportunity for them to gain through the E and T program, where we believe this might be an opportunity to where they can actually meet work requirements now. Additionally, we're teasing the idea of the within CalWORKS, we have what's called a WEX program. We have subsidized as well as unsubsidized work experience WEX program.
And so it's similar to like an E and T program, but there might be some opportunities where we might be able to there might be an opportunity where we can take a look at how that could maybe be teased out in for the CalFresh population as well. And those are the two things that come to the top of my head right now.
Speaker 14
I would just add, we're pursuing similar things that were mentioned by my other county colleagues. But for example, I've directed our Parks Department to they have a big volunteer program, an initiative that they run already. But they centrally manage and maintain those records and to work on the right systems in place. Again, would be outside of Kalsas, but the right systems in place for connecting people and doing helping with the verifications that are needed for volunteer related opportunities. So we're doing the things that we can.
But we also and we have the opportunity to build on some of our CalWORKS related programming. The thing that's really challenging is some of the specifics of what some of these requirements look like are still question marks from the federal level. There's certainly question marks from state agencies, which I know are trying to deal with the question marks from the federal level. And trying to move to put new things in place that we haven't had to have previously requires a level of upfront investment that we're certainly doing everything that we can but seeking a lot of partners, philanthropy certainly, but really an opportunity given the bang for the buck that comes with drawing down the federal funding to put some modest investments forward to actually keep people enrolled.
Speaker 15
And I would just add to that is, one, I think counties having a deeper conversation with the state agencies as to what that work requirements look like and medical frailty and all those things really would be helpful, well as
Speaker 15
the things that we are contemplating in Tulare County is how do we help people who are just shy of meeting the hours? I'm working part time. I'm going to school, but maybe I'm only getting seventy two hours and I need eighty or I need sixty five. And that's a much more difficult population where we think, at least in my county, than maybe someone who just needs a volunteer placement.
Speaker 15
his park. Yeah, we can send them to the park. You know what mean? So, it's your service industry people, it's your ag people who are just shy of those hours, and how do you engage them to keep them from disenrolling? And that's, I think, another challenge that we welcome a further conversation on.
Speaker 1
And my last question, director. You heard DHCS talk about the campaign, the text that was sent out about some changes. And you also mentioned a campaign yourself in LA County. Is that the same, or is it on top of what the state is doing?
Speaker 12
It's in addition to. So we usually try to piggyback on the campaigns that the state puts out, but we've created this website where people can go to and get updated information because things are changing sometimes on a daily basis, and we want to make sure they have the most recent information. But we try to work in coordination as much
Speaker 1
as possible with the state. Thank you. If I can, though, my last remaining questions are for Department of Finance, If someone can come up. And then directors, I do have follow ups for you too if you're still here. I think you're still here.
No? Or deputy director? Yes. Oh, I see. My first question to department of finance is, last year in the in the budget, we did allocate 20,000,000 contingent.
Right? I'm just wondering what the plan is on getting those $20,000,000 out. And if it's not going out, is it getting reallocated into the this year's budget?
Speaker 3
Yes. Lourdes Morales, Department of Finance. You're you're correct. As part of our agreement, part of the '25 budget act, there was placeholder language to allow for dollars for counties towards a bod county administration as you sort of learned more about, you know, what those requirements might be. So we are, you know, aware of that tracking the legislature's interest and hope to have something for your consideration soon.
Speaker 1
Soon. Okay. So we're you're still tracking. You're getting feedback from the counties. And, hopefully, by May revise, we'll have an update on if dollars are gonna come be coming out?
That's correct. So if we allocate it in last year's budget, are are we waiting for this year's budget to do something on it? So not necessarily.
Speaker 3
So I think I I mentioned soon. I don't necessarily think we have to wait for the May revision for this because there's existing authority.
Speaker 1
Okay. Alright. Thank you. Would love to stay really connected on that just to get updates on if those dollars since I know it's really crucial for these counties to get started on that. Director, we've been talking a lot about that match waiver.
What is needed from us? What is needed from the department? What's the possibility of this? And if we do this, what is the impact? Does that hurt us?
Is that more dollars for us? It doesn't seem like it is, so I just wanted to get clarity here.
Speaker 5
Yeah, thank you. So Jennifer Troia, Department of Social Services. It takes a statutory change because the matching requirements are currently entrained in statute. It's something that we have done before, as I think was referenced in prior times. That statutory change is perfectly feasible as far as we're concerned, and we're happy to provide technical assistance on how to accomplish it.
What I think you also heard, which we agree with, is that it does, as compared to a world in which the state and the counties put up our full matches and draw down the full amount of federal funding, it does reduce the overall amount of funding that is available for the program, because the only thing that would be matching a portion of the federal funds is the amount of the state funding, not the added county funds. So the overall result is less funding for the program. But the counties, by not providing their match and still drawing down our match, are asking to minimize that loss of federal funding by the state still putting in our share. And my understanding of the proposal is that it's meant to be temporary. So they would like to see that happen for a number of years.
So in terms of those impacts, obviously, full funding for the program versus the loss of those additional both county and matching federal dollars will result presumably in service impacts. But at the same time, if the counties were not providing it and the general fund was also not provided, there would be an even more significant loss. So I think that's what's before you've
Speaker 1
Regardless of what approach we take, the state is still covering their part. This wouldn't increase anything from us.
Speaker 5
This does not increase the state funding that would have been provided under the current sharing ratios, assuming that the counties had been putting in funding. Okay. We sort of ignore whether the county funding is there or not No. There Okay. And put in what we were expecting to put in anyway.
Normally, we wouldn't put that in unless the counties were also putting in, and this is a change to that.
Speaker 1
And if they if we provide that match waiver, does our state allocation decrease as well?
Speaker 1
It's our cover, our part. Right now, you if I'm understanding, we've embedded into the January budget our full part. We don't know if they're gonna cover or not, but we're we're assuming they are. And if there's a match waiver, do they get that full amount?
Speaker 5
If there is a match waiver, they would receive the full amount of general fund.
Speaker 5
Which then draws down federal funds. Not as many federal funds as would have been received had they also provided
Speaker 1
I wasn't I wasn't sure if the match waiver, we if we took it, it also decreased the amount that we gave them.
Speaker 5
The idea that's being proposed, as I understand it, is that it would not.
Speaker 3
Just sort of it's a clarification of under current law, although the state has budgeted sort of presuming counties are going to match their full allocation, under current law, the state would only contribute a portion that matches the county contribution. So would counties don't sort of put in their full share, then although the state has set aside in the budget the full allocation, we would only do a portion of that. So would be current law. So as proposed by the counties Uh-huh. With a match waiver, the state would still put forward their full allocation.
So together, we would sort of pull down more federal funds than the alternative. Okay. So that's sort of the the consideration for the administration, for the legislature from counties.
Speaker 1
Perfect. Thank you. Another question. And now I'm forgetting if this is under you, IHSS? Yes, thank you.
Apologize, Director. Because this is really directed to counties and all the in what they're covering. Are we going to be able to use a CMIP? CMIPs. To automate those for work verification?
Speaker 5
It's something that we're exploring. So CMIPS, for others' benefit, is the case management information and payrolling system that undergirds our IHSS program. It's one of, as I was referencing earlier, where we are attempting to use as many data sources as we have access to as possible to create undergirds those exemptions on the front end that prevent the need for screening and more detailed work and prevent the risk of loss of benefits. There's a possibility of using CMIPs data if we can figure out all of the legality, the access to it, the privacy, like all the issues that we have to work through. If we're able to get through all of those issues, there's a possibility of using it for multiple purposes.
One, the data could help us on the end of the recipient for documenting a disability. On the provider's end, it could document their income and also document that they are a caregiver of an incapacitated person. Both of those things are exemptions to the HR1 work limit or time limit requirements. So if we can, we'd like to use it to create additional exemptions on that front end for both recipients and providers.
Speaker 1
Oh, that'd be really great. And then, because I have you, I'm just going to ask you. On EDD, are we using a lot of EDD information for automation as well?
Speaker 5
We do have information, and I'm going to have to ask the deputy director to join for more detail on that. But we do do data matching with them and maybe
Speaker 2
So the EDD data that is available to us now is primarily wage data from the past because it is reported by employers on a delay, and so we receive it on a further delay from EDD. So it is helpful to check previous income eligibility determinations, but it's not particularly helpful for some of the kind of live determinations that counties need to make. What is your income today? It also does not provide work hours. It only provides wages.
And so there are some limitations to how we can use that for this particular rule.
Speaker 1
Got it. Okay. Thank you so much. I appreciate it. Any final thoughts before you take off?
I appreciate your really immense expertise and deep dive in this. Thank you so much. Our final panel is on the impacts of providers and eligibility workers. We have representatives from three different areas with Ventura County, San Francisco, and LA. We're gonna start with Ventura County.
Speaker 20
Hi. Good afternoon. My name is Christopher Steven Balma. I'm a proud member of SEIU Local seven twenty one, and I'm a client lead for eligibility worker from Ventura County. I've been with this I've been in this field since 2019.
I am one of 13,455 eligibility workers across the state represented by SEIU who help people apply for and keep benefits that help 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 one 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 work face to face with clients who come into the office without an appointment. Even though we've known HR one was coming, there's no way for us to prepare for the cripplingly long waits our clients will experience as we try and navigate the many new requirements and exemptions.
Our clients are actively in a crisis, and my site currently has my supervisor and I overseeing a unit of six eligibility workers. And we will each contact up to 10 to 15 clients in each eight hour shift. Many cases are for what we call non needy caretaker relatives. That's when a relative of a child is requesting aid for a child because their parent isn't present for any reason. For example, in Ventura County, we've had a lot of children whose parents have been detained by ICE or deported.
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 from 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 like to succeed in life because of them. I'll never forget my mom's desperation as she tried to meet all the requirements for the 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 process as easy as possible. If I can speak for my Ventura County colleagues and clients, we are scared for our communities and for ourselves as workers. While our clients may receive notification on changes of their eligibility and what they need to do, In many cases, these notifications are not language accessible for them, or they are unhoused and may not be able to rely on getting the information they need when they need it. So my colleagues and I will have major workload increases on both Medi Cal and the CalFresh side.
And in many cases, we may see our workload double or even triple. As of right now, we have only been trained on the screening of ABOT and work registration requirements. Nobody has been trained in the actual follow-up needed for people that are required to be enrolled in these programs or the requirements themselves. So in short, meeting our clients' needs will take time, and it'll take training. Right now, there's no plan for how we're going to bridge that gap between where we are now and where we will be with the HR1 requirements.
We must be properly resourced for this to work. Lives depend on it, communities depend on it, and communities depend on us, the workers. I'm so scared of what it could mean if California doesn't fight the harm caused by the h r one cuts and our brothers and sisters and kids go hungry. Every lawmaker in this state should be as scared as I am. We can't just shift the costs onto the counties.
There's just no way that they can handle this burden alone, and we will all pay the price, even the wealthiest Californians, our systems fail. We must work to implement HR one 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.
Speaker 21
Zubayak. 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 H. R.
One 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, 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 an equal portion at the state and the federal level, 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 H. One, 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 costs. 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 H. R. One 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 H. R. 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 eight 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 'twenty seven-'twenty eight, there will be a $315,000,000 reduction in revenue. That comes from both a reduction in direct funding as a result of H. R.
One 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 H. R. One 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 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 program, 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 costs, costs 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 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 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, quite frankly, to hold the line on Medi Cal coverage and to use every available tool that's in your arsenal, including the multi year 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 so much.
Speaker 22
Good afternoon, and thank you, Chair Caroline Manjivar, for giving us the opportunity to testify today. My name is Corrine Sanchez. I'm the president and CEO of El Proieto del Barrio in the San Fernando Valley and San Gabriel Valley in Los Angeles County. We have operated for over fifty six 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 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, OBGYN, mental health 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. Health care 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 Centers' ability and capacity to serve our community is built on a specific financing model called PPS 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 HR1 and the UIS community? The threat we are facing is not one single cut. It is
Speaker 22
compounding cascade of losses hitting community health centers simultaneously, and nowhere will it be found more acutely than in our immigrant rich communities like Los Angeles and organizations like El Proyato located in economically and culturally diverse communities. First, the state of California 2025 budget act eliminated PPS reimbursement for individuals with UIS, status, which is a significant population in 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 cost. Senator Menhilar's district, where we are and other clinics located statewide, are gonna lose approximately 36,600,000 in actual reimbursement with this policy alone.
Second, will be impacted by HR one and push millions in Californians 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 1,600,000,000.0 in twenty six-twenty seven alone, and that figures to grow exponentially in subsequent years. When we lose Medi Cal members to HR1 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 governmental 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 the 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 five twenty five. There's workforce shortages involving our medical providers and mid level staff. 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 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 Medi Cal populations or to 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 Medi Cal primary care visits will destroy the SafetyNet infrastructure. Two priority: maintain a statewide uniform coverage solution. We stand statewide with advocates, as I stated earlier in your 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 must produce a comprehensive, unified, statewide alternative, not a county by county patchwork solution. Any alternative coverage solution must follow a standardized net of essential health care benefits using existing administrative infrastructure, protect the 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 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.
They show worse health outcomes, more advanced disease, and more expensive care. The safety net can absorb a great deal, but it cannot absorb the level of 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 protect PPS, invest in statewide coverage solution, and ensure that community health centers have resources to continue to do the work we do, keeping California's safety net intact.
I thank you, Senator Menivar. I It's one
Speaker 22
I'm available to answer any questions. I have my CFO, Ricardo Ornales, present if there's any more specific financial related questions of the committee.
Speaker 1
Ms. Bob has made me question. Maybe I need a doctorate in public health to help. Mr. Palma, I'd like to start with you.
You're a lead four, so I can imagine that's 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 seventy nine minutes. Seventy nine minutes. Have you timed yourself and your colleagues lately?
Speaker 20
So for my team, seventy nine minutes sounds about right as the average. Very often, some interviews or recertifications will take more than that. It'll go into, like, the hour and a half, an hour and a forty five minute range. But very often, if we have, like, an ESAP, an elderly disabled household, and they have a lot of the information already on file, Like, if they're receiving Social Security and Medicare and we can verify all that electronically, it'll sometimes be, like, in the fifteen minute range.
Speaker 1
Okay. And then you talked a lot about training. What additional training is needed for you all to be ready for all the HR one impacts?
Speaker 20
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, will receive, like, electronic trainings through, like, a PowerPoint or, like, a system.
Speaker 20
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 ABOD, a lot of people need to be informed on what the follow-up is going to be. And even on a worker's point of view, it's not just starting to do those requirements. It's actually training them on what notices we need to send out, when we need to send them out, 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, 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 work your way down to see if they're part of the student requirements. Yeah, sorry, the training will take a lot of information that these changes are gonna go into effect and hopefully get everybody on the same page.
Speaker 1
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?
Speaker 20
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 at the county level, I don't think people are aware of who's going to 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 specialists. 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 employment services workers doing 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.
Speaker 1
Do you believe, at least your team, do you have enough personnel, enough colleagues to do your current work now and the additional eligibility requirements coming down?
Speaker 20
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. A lot of the changes that we're doing is kind of preemptive, kind of like trying to avoid the fiscal penalties that we've talked about today. We're starting to review cases, renewals. We're doing them both before authorization and post authorization. But that also goes into the amount of workload that each claim benefit specialist is doing, because they have to take time to go back and review 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 demoted and transferred because of the budget.
Speaker 1
Oh, wow. Okay. Thank you. Corinne, with the removal of PPS, are clinics going to stop seeing the UIS population?
Speaker 22
No. No. Will continue. And we're meeting regularly to determine how we're going to approach that in different clinic models within the clinic.
Speaker 1
Okay. It's just maybe, like you mentioned, stopping services to absorb the cost?
Speaker 22
We're merging services right now because we're federally qualified. We have a mandate to deliver all the services to anybody who walks in our doors. So we have to peer out merging clinics with one another, delivering particular specialties at certain clinics. We're thinking creative operationally how we're going to address that. Okay.
And
Speaker 1
before and during the time that indigent care was being provided, and there are a lot of people not on health insurance, Were clinics an avenue that could sign people up for indigent care?
Speaker 1
if if they walked in, they just you still had to provide care, but there wasn't any connection to some kind of coverage?
Speaker 22
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 previously. So once people start falling off Medi Cal and they're now on indigent care, coupled with
Speaker 1
the removal of PPS rates being taken away, that's two different kind of hits clinics are going be taking.
Speaker 22
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 going to be a big hit on the system totally. K. Thank you.
Speaker 1
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 what? 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?
Speaker 21
Yes. Public hospitals could do that. 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.
Speaker 1
And I think 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, it's your baseline, how much
Speaker 21
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 H. R. One.
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.
Speaker 1
Public hospitals I'm taking this quote from the previous panel trains 50% of our physicians.
Speaker 21
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.
Speaker 1
Thank you, you three. I appreciate you coming and adding to the conversation. Okay. Thank you. Alright.
Time for public comment on the three panels. Only on the the HR one 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.
Speaker 24
Okay. No. She can be here with me. Good afternoon, chair and members. My name is Quinn Cheung.
I'm a registered nurse, I'm also a parent leader with Parent Voices San Francisco. We align our comments with the Reimagined Cowards Coalition. I'm speaking today in support of friends and community members who rely on cowards, Medi Cal, and cowfish 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 will 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't 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. It's, like, one fifty 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 Please protect Cowartz, Medi Cal's, and CalFresh. Our families are counting on you.
Thank you so Thank you.
Speaker 25
Okay. I had to write down what I was gonna say. Good afternoon. My name is Elia Fernandez, and I'm with Paramount 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.
Speaker 26
Hello, chair members and members. My name is Betsy Ponce. I'm here with Parent Voices San Francisco chapter to, speak what 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 I 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
Speaker 26
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
Speaker 26
Thank you. Please protect all these services. Thank you. Thank you, please.
Speaker 17
Hi. My name is Maria Luzturi. I'm an organizer of Memoirs 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. In San Francisco, our grant is not even enough to pay for rent. Considering the skyrocketing cost of groceries, gas, and basic necessities, families and cowards 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
Speaker 1
the end of the hearing. Right now, we're on Cal Fresh and Medi Cal HR1 impacts. I just want to add at
Speaker 17
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 wealth, we need to have a temporary revenue taken from our billionaire. Thank you.
Speaker 23
Hello. My name is Christine O'Keefe, and I live with cerebral palsy. Thank you for giving me the chance to speak. Hello. My name is Christine O'Keefe, and I live with cerebral palsy.
Thank you for giving me the chance to speak today. I have had a speech impairment my whole life, and people do not always understand me when I talk. That is why I use AAC, augmentative and alternative communication. AAC helps me share my thoughts, express myself, and be part of conversations that matter. I also work as an AAC mentor, helping other people with disabilities learn to use communication devices so they can express themselves too.
Seeing someone say something important for the first time on their device is incredibly powerful. The life I have today is possible because of Medicaid and services from my regional center. They provide personal care support and equipment like my wheelchair and my AEC device, which allow me to live independently and do my job. These supports are not luxuries. They are essential.
Medicaid means dignity, independence, and having a voice. When you protect Medicaid, you protect the lives and futures of people with disabilities. Thank you.
Speaker 8
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 smushed.
Speaker 8
a nursing mother with two little ones, and it's been quite a 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 were like, woah. We're actually getting help. And we were amazed when we were 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. 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.
Speaker 15
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.
Speaker 15
I wanted my son. In 1989, I had my son, and, again, without Medi Cal, I wouldn't be able to do this.
Speaker 28
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.
Speaker 29
Hi there. Jennifer Grebbe, Parent Voices California. I just have to say that 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 going to 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. Cutting off families is not an option. And so please, we beg you, think about those faces when you're making decisions. Thank you.
Speaker 30
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
Speaker 30
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 CalFood to provide that solution. Thank you.
Speaker 31
Madam Chair, Greg Herner for two eleven San Diego. We're a cosponsor 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 Yenes, 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.
Speaker 32
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 exclusions, and require also corporations and billionaires to pay their fair share.
Despite the extreme urgency, we are hearing that setting up this famine prevention infrastructure will take eighteen months. In contrast, we got the ACL for ABOG restrictions in December, and we'll 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 backfilling the budgets of wealthy corporations. Thank you.
Speaker 33
Good afternoon. Whitney Francis with the Western Center on Law and Poverty. HR1's accrual 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 are adequately staffed to meet the increased need across Medi Cal and CalFresh, including outreach training and staffing of 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.
Speaker 34
Good afternoon, Chairman Jafar. Josh Wright with the California Association of Food Banks. Thank you for agendizing CalFood as part of the conversation on HR1 response today. As was noted in the agenda, CalFood faces a 90% cut in funding this year. Our network also experienced a 40% drop in federal TFAP foods last year, resulting in over $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 H. One, 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.
Speaker 35
You. You, Madam Chair. Andrew Shane with CWD. I'll be brief. Appreciate the discussion with counties.
I just wanted to respectfully add to the record on the first panel on funding for CalFresh ABOT implementation. To be clear, there's not new funding in the January 10 because the caseload declines offset any new resources. So there's not new money for county readiness. And so we really appreciate you asking about the $20,000,000 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 heard from Christopher, once those screenings happen, it opens up a can of worms. And that's really the time we're talking about, to build trust, to keep people on the program.
It's that intimate information needed to get to those exemptions.
Speaker 36
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 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 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 Thank public hospitals you very much.
Speaker 37
Afternoon, Madam Chair. Omar Altamimi here with the California Panethnic Health Network here on behalf of CPEN and the California Working Families Coalition. We know that HR1 is having and will continue to have devastating impacts for California's most vulnerable communities, particularly communities of color and our immigrant communities. Most of the federal cuts as a result of HR1 have gone to fund ICE 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 safety net and impacting our most vulnerable communities.
Thank you.
Speaker 38
Thank you, Madam Chair. Kathy Senderling McDonald of Capbird 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.
Speaker 39
Good afternoon, chair. This is Johnny Pinera 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 want to go ahead and encourage the Department of Health Care Services to provide utilization data on the Community Health Workers Program that will help to help with the new HR1 requirements at the local level. And that will ensure that medical recipients are accessing this benefit and keep them enrolled in medical.
So we really encourage the department to help us with that data. Thank you.
Speaker 40
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
Speaker 42
Afternoon, Chair. George Cruz on behalf of the California Behavioral Health Association. We appreciate the department's efforts to reduce coverage of loss for Californians and the technical assistance being provided to counties as they prepare for implementation. We ask that 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.
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.
Speaker 1
take the next one until they're ready. Thank Doctor. You, Madam Chair. Brendan
Speaker 43
BRENDA 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 Medi Cal.
CSAC, with our partners, estimated the costs 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 costs 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 services without decimating public health, public safety, and other programs. When you add on the impacts to public hospitals and to 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.
Speaker 27
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 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.
Speaker 44
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 we got hit. California got hit, and we're being targeted.
I want to honor that that's a very difficult spot to be in. But please do not repeat the big beautiful bill and then cut more deeply into the work that supports especially immigrants 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
Speaker 44
Sports and services. And please do not cut. Instead, let's look to revenue generation. Thank you. MARY Thank you.
Speaker 46
MARY 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.
Speaker 47
Kelly Brooks, here this afternoon representing the urban counties of California. I have worked for county government for over twenty five 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 multi system impacts. So it's human services. It's health.
It's food access. It's also behavioral health. It's going to 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 thinking about leading in 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.
Speaker 48
Good afternoon, Nora. Angela's with Children Now. The changes driven by H. R. One 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.
Speaker 49
Good afternoon, and thank you. My name is Myra Castilla Garcia here on behalf of Ultimate Health Services, a nonprofit, federally qualified health center serving more than 600,000 patients across Southern California each year, many of whom rely on us for essential health care coverage. The vast majority are Medi Cal or covered California enrollees, the most vulnerable communities in our state. And for them, AltaMed isn't a preference. 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. HR1 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 in underserved areas.
Speaker 50
Good afternoon. Beth Malnowski of SCA of California, relation to second to 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 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, dollars 500,000,000 ask that we are probably doing in partnership with the Public Hospital Association to make sure they are there to provide care to everyone. And lastly, on vision 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 going to need a lot of support from us here in Sacramento to get it right. Encourage this conversation. So, you. Thank you.
Speaker 16
Good afternoon, chair and members. Manuel Pazaraguin with the California Immigrant Policy Center, proud co lead to the Health for All Coalition. Before the passage of HR1, 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, asylees, 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 services they desperately need, and ultimately creating a two tiered health care system that supports only some. Thank you.
Speaker 51
I can't do that. But good afternoon, Michelle Gibins with the County Health Executives Association of California. I really appreciate the dialogue and the ability to have the counties share just how dramatic the impacts to HR1 are. 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 or alternatives that would alleviate the burden. Thank you.
Speaker 52
Sarah DeKett, on behalf of the rural county representatives of California. And we have the 40 smallest counties in California. I just want to 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 multiyear deficits. And we're really concerned without a deeper partnership between the state and federal government, we're going to risk the fiscal solvency of our smallest counties and our most vulnerable counties. So we just really look forward to working with the legislature and administration, and we desperately need to make sure the safety net for all Californians are maintained moving forward. Thank you.
Speaker 53
Good afternoon. Josh Gauger on behalf of the University of California. UC Academic Health Centers are a cornerstone of California health care safety net. As designated public hospitals, they provide high quality care regardless of insurance status or ability to pay. In twenty twenty four-twenty five, 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 Californians projected to lose Medi Cal 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 impacts 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.
Speaker 54
Hello. Yesenia with En 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 get kicked off of CalFresh due to the ABOD rules in June.
Nearly one to 2,000,000 CalFresh recipients I mean, Medi Cal recipients will bring in the new year with no access to health coverage. Let's be clear. We're talking about famine level conditions in the fourth largest economy in the world, the state of California. We urge you 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 as quickly as possible. We fought hard for those dollars last year. We're in March now. What is causing the delay?
Speaker 55
Thank you very much. Sam Wilkinson within 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 h r one cuts and support the 200,000 lawfully present immigrants who are being kicked out of medical by the Trump administration. And as we stated earlier, 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.
Speaker 56
Dear, charity members, my name is Erezita 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.
Speaker 56
Yeah. And also and also and Aster restores the CalFresh beneficiaries for 72 human immigrant affected by age r one.
Speaker 56
Super hard families on immigrants, and please don't cut our seniors and a person who have let me
Speaker 19
Good afternoon, chair. My name is Benjamin Chow with the California Immigrant Policy Center. In two weeks, we will begin removing 72,000 humanitarian immigrants from Calfresh, including refugees and asylees, many who assisted the U. S. Government and military abroad, like in Afghanistan.
In two months, stricter requirements and red tape will push hundreds of thousands more families off of benefits, including mixed status households, and so we urge you to modernize CFAP into a state funded program that could support these populations, losing CalFresh due to HR1, and beginning automation now to serve all families impacted by HR1, including immigrants.
Speaker 57
Good afternoon, Madam Chair. Alameda County Community Food Bank, I'm Ezra Pammin Tuan. We would just like to record our concurrence with the earlier mentioned request around CalFood funding, CARAT program, CalFresh Outreach Network funding, and Sunbuck's online application. Thank you so much.
Speaker 58
Nicole Wortleman, 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 promotoras. We are also asking DHCS to publicly share utilization data on the community health workers' Medi Cal benefits so we can better understand how families are accessing these services, and we are asking for long term sustainable revenue solutions.
Speaker 59
Randy Hicks, California's disability rights. I'm not speaking on behalf of California for disability rights. I'm speaking on behalf of me. Now I want to tell you, I have Medi Cal, and if 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 gonna do, it's gonna hurt me, but let's not have California hurt us too. Okay? Thanks.
Speaker 1
All right, sir. Don't bump into anything. We can't have any more broken bones from you. Okay.
Speaker 60
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. Thank you.
Speaker 61
Afternoon. My name is Ethan Julian Zamora, and I'm a community outreach coordinator for Somcan and Uknai Filipino, a direct and referral services program serving the Filipino community here in Sacramento and in San Francisco. For all my life, I've had the privilege of being insured through 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 bound to lose access to health care benefit programs like as a result of HR1. 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 of 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, I hope and expect you to do the right thing. It's the only way.
Speaker 11
Hello. Good afternoon. My name is Jeric Ruiz, and I'm a community outreach coordinator for Filipino based here in Sacramento. And I urge you all to reject any cuts that will reduce access to Medi Cal for Californians, especially for our immigrant communities. Medi Cal and IHSS is not just an option.
These resources allow our communities 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 IHSS, our communities would live without basic care. So I urge you all to reject any cuts that reduce access to Medi Cal instead raise new revenue to fully fund medical and IHS food programs and fund services for low income families and the unhoused communities to fully protect and support those who rely on these. Thank you.
Speaker 62
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, 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 every day. Thank you.
Thank you.
Speaker 63
My name is Art Persico. 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
Speaker 63
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 Medi 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 pay their fair share. They must do so. And 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.
Speaker 64
Hi, good afternoon. My name is Megan Whelan. I'm the interim director with the California Domestic 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 leading voice for those workers who support more than 2,000,000 homes across California.
In the face of these devastating cuts from HR one 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 lifesaving care. We call on you to realize a different vision where care workers are protected, are uplifted, are valued, and people with disabilities and seniors have the opportunity to live independently as part of our communities.
Speaker 65
Good afternoon. My name is Jackie Mendelson with Nourish California. I'm here on behalf of the Food for All Coalition, but I'm going to 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, seventy two thousand 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 is part of food for all.
So, as is ensuring that the expansion work is completed on time so that can go out immediately, I urge you to prevent this hunger crisis and fold these populations into the CFAP expansion.
Speaker 57
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 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 two million people can lose care because of Medi Cal, how many of those will be people with disabilities who die because they couldn't access care? If done right, the state budget can save lives. Everyone deserves access to the medication and services that they need to survive.
We urge you to protect the people who need this care. Thank you.
Speaker 1
Thank you so much. Budget subcommittee number three is going to take a quick recess before we move on. Alright. Four hours in. Alright, y'all.
This is my fault. Alright? I'm the one the only one asking questions, so this is all my fault. Alright. Let's get into issue number two.
DHS, come on back.
Speaker 9
Good afternoon, Chair and Committee staff. Tyler Sadwitz, State Medicaid Director and Chief Deputy Director at the Department of Health Care Services. I'd like to provide a brief overview of the budget change proposal and the associated trailer bill language related to HR1 planning and implementation. To meet the requirements of HR1, including significant policy changes to Medi Cal eligibility, benefits, and financing, the department requests total expenditure authority of $33,000,000 total funds, of which 15,500,000 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 reduce duplicate coverage and redefine allowable immigration statuses that qualify for federal matching funds implement work and community engagement requirements and other significant eligibility changes and recruit and hire for positions and establish contracts to meet major financing changes that are in HR1. To implement the required Medicaid provisions in HR1, the department proposes trailer bill language to change related state statute that will enable the department to modify existing Medi Cal eligibility rules to regularly check and update member addresses using trusted sources, conduct six month eligibility redeterminations for certain adults, reflect eligibility updates for federally funded full scope Medi Cal based on immigration status, reduce retroactive coverage periods, and establish work and community engagement requirements. The proposed changes are necessary to align state law with mandatory provisions of H. R. 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.
Speaker 18
Mainly with LAO. Overall, the budget change proposal reflects the additional workload that the administration expects to face in implementing the HR1 requirements. We're continuing to review these specific budget requests to assess whether they're appropriately aligned with the underlying streams of work, and we'll inform the committee staff if we identify any concerns about the budgeted amounts.
Speaker 1
Thank you. You're new. Right? Okay. Nice to meet you.
You didn't want to 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?
Speaker 9
Yes. Thank you, senator. We are proposing for contract resources mostly to be in budget year with the exception of financing related contracts in budget year plus one, given some of the staged implementation of those provisions in HR1. So many of them take effect in later years. Things like new capped limits on the amounts of state directed payments that go into effect in 2028, changes to the MCO tax, which came up earlier, as well as the hospital quality assurance fee and other health care related taxes.
So, we will need both budget year and budget year plus one to sort of plan and accommodate and adjust for those financing related changes. For contract resources, the remaining the resources that we're requesting are really for budget year, given a sort of focused implementation plan, given those changes go into effect in 2027.
Speaker 1
Okay. Perfect. No other questions for me? We're going to hold that item open, move on to issue number three.
Speaker 4
This issue is regarding the general fund solutions as part of the 2025 budget act related to undocumented and unsatisfactory immigration status Californians. To address the protected statewide budget shortfall, the 2025 budget act included some very difficult policy changes to achieve a balanced budget and achieve some general fund savings. The 2026 budget includes updated estimates for ongoing savings from these policies. I will provide an update on the solutions related to undocumented or unsatisfactory immigration status, or UIS, populations in the Medi Cal program. First, the Medi Cal expansion enrollment freeze.
This went into effect 01/01/2026, and this applies to individuals aged 19 and older who do not have satisfactory immigration status or are unable to establish satisfactory immigration status. It does not include qualified noncitizens 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 continue to qualify for restricted scope Medi Cal if all other eligibility criteria are met. The budget projects a savings of $659,200,000 general fund cost reduction in the budget year for this change. At this time, we do not have updated enrollment or kind of actual enrollment information for this proposal, as it just went into effect in January.
Typically, it 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 current year, about 91,000 individuals would lose coverage as a result of this proposal. The next proposal relates to state only monthly premiums. The Budget Act includes implementation of a $30 monthly premium for unsatisfactory immigration status for individuals nineteen through fifty 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 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 $134,600,000 general fund in the budget year. We are currently actively doing outreach to the impacted populations, including using 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 policy relates to the elimination of state only prospective payment system, or PPS, rates for FQHCs and rural health centers. This was discussed in a couple of the panels earlier today. The 2025 budget ends PPS for state only services for individuals with unsatisfactory immigration status. This goes into effect 07/01/2026. This falls outside of the federal PPS policy because this is a state only population.
Clinics will be reimbursed at the applicable Medi Cal fee for service rate and the fee for service delivery system and or between the Medi Cal managed care plan and the clinic in the managed care delivery system. Before the Medi Cal coverage expansions in the recent years, these state only services were not covered at all by Medi Cal. So the state did not provide any funding for these services to our FQHCs. So, this policy continues the payment for these services, but at the rate that is really available to all other providers. The estimated general fund savings are about $1,000,000,000 in the budget year, growing to point $1,000,000,000 in 'twenty 07/2008, and ongoing.
And then the final policy related to the UIS population is securing state rebates on pharmacy for the UIS spend in the Medi Cal program for our undocumented and UIS population. 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 collection of it. The governor's budget estimates onefour of drug rebates of $123,000,000 general fund to be collected in the current year and threefour 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 and UIS. Will?
Speaker 6
Will Owens with the Legislative Analyst 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 Medi Cal 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, 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 legislation 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 need there may need to be further revisions to the savings estimates, that are expected from them.
Speaker 1
like to add anything else? Can I jump into oh, okay? I'll jump into questions. I know, director, it's too early to tell about the Medi Cal enrollments, and you mentioned Wednesday online. Is that tied also to how much savings we've done so far?
Or is that going to come together?
Speaker 4
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 Act of 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 update the numbers, Okay. Both that caseload
Speaker 4
the other? They all come together? They're all based on assumptions. And so the more accurate we know the caseloads, that will feed into assumptions to estimate the savings. And so they are tied together, but you do have to make some assumptions to come up with some of these estimates.
Speaker 4
We should have a couple of months of actual information. Yes, that's correct.
Speaker 1
Okay. On the premiums, we allocated funding for this current year right now, 28,000,000. Can you give me an update of what we are and what platform, how we're going to be Sure. Collecting
Speaker 4
So we yes, we had $28,000,000 general fund for the operational costs 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 a vendor to do this work.
Speaker 1
Will the $28,000,000 actually be used in this, or is the RFI process going
Speaker 4
to 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 be able to collect the premiums.
Speaker 1
Okay. So, but Oh, yes, I understand that. But there's a potential, since we haven't selected a vendor yet, that the $28,000,000 isn't going to be used in this current year?
Speaker 4
I don't know the timing for when we would enter into a contract with the vendor, but that the intent of those dollars is to fund the contract. And whether we enter into it in the current year or budget year, 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 out the door until the budget year, those dollars just follow the contract the way our budget is set up.
Speaker 4
to be collected just yet? Correct. We've 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.
Speaker 1
Okay. Going on the dental benefit elimination there, we did this before. It lasted for a long time where we eliminated dental benefits. And then we were able to bring it back. Why did we bring it back?
Is it just because we had funding at that time to bring
Speaker 4
it back? Correct. So the elimination of adult dental was to the entire Medi Cal program when there were significant state budget challenges, and it was brought back 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 in kind of available and prioritized across, you know, the different proposals. And so, that's how it was brought back.
Speaker 1
The health impacts that we saw during that time was it eight, nine years that we had the elimination? Are there any that we can prevent 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 Medi Cal population, regardless of age, that we're taking as we go into round two of this elimination?
Speaker 4
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.
Speaker 1
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 to see if I heard correctly.
We didn't always give this payment?
Speaker 4
So this it's PPS for the UIS population. And so prior to our expansion of the undocumented expansions, the state never paid clinics for these services. And so, clinics served individuals with unsatisfactory immigration status and never received a payment from the state because they were not part of the Medi Cal program at the time. As we did the undocumented expansions, we then started paying for services for, oftentimes, individuals who were already being seen by the clinics, but maybe not for as comprehensive of services.
Speaker 1
So did this start when we expanded to children in 2016, or was this Correct. Okay. So for about ten years, they've had this payment. And it was new for me when the public hospital said they also get
Speaker 1
Well, it's because they run it's not the actual Exactly. Hospital. Just that they have their JULIET
Speaker 1
And then can you also clarify on the last one, the rebates? Yes. You said that, current year, we're only going to collect three quarters, but it's going to
Speaker 4
be for the full year. Why? It's just a matter of the collection of the rebates, the timing. It takes about quarter to collect, and then there's a lag, four months after the quarters and 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.
Speaker 1
In the first panel, in the second panel, someone made a comment about the doctor made a comment about to prevent the triggering of code 17,000, maybe potent 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 causes the effect doing that versus indigent care? And when I say us, just health systems as a whole. Because if I say yes, they, of course, will have our savings. I'm just wondering if is that the first time you've heard that from the panel? Has there been any kind of conversations with stakeholders on that?
I mean,
Speaker 4
there's been there's lots of coalitions trying to design what or think about even county partners working, you know, managed care plans at county, at the local level, trying to assess 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 something to be very mindful of.
Speaker 1
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 the most adequate amount of time? I don't think I was able to ask this question of how we landed
Speaker 4
on three months. Three months, it was through negotiations with the legislature on that and the cure period and trying to provide extra opportunities to remedy the situation.
Speaker 4
back on? I think it was just via conversations. And we have this cure period in Medi Cal, which is thirty days in kind of the normal processing where an individual can come back and almost correct the information so that they can maintain eligibility. And so, we do not have information at this point on how many have, since January, to now have availed themselves to kind of come back in and address the eligibility. We don't have information on
Speaker 1
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 Medi Cal. 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 CWDA is, 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 give 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. Aleo, did I please.
Speaker 18
Just, one one thing I I wanted to add, in response to you asking about potential ways to mitigate cost pressures on county and the gen 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 Medi Cal, which provides emergency and pregnancy related services. So, that is sort of a kind of backstop as far as the most pressing services are concerned.
Speaker 1
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. DHCS.
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.
Speaker 66
afternoon, and thank you so much for the accommodation. Sumjeeta 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 C and I. 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 C and I calculation, consistent with existing statutory language to use additional California geographic areas where statistically valid data are available.
When the C and I 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 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 C and I calculation. However, starting in January 2025, regional CPI data for fuel and utilities are no longer available for all US regions.
Thus, that component of the CPI calculation is no longer available, and the proposed change fills the gap by specifying that an estimate may be used so that the CNI can continue to reflect the cost of fuel and utilities. As a quick background, the CNI measures changes in the cost of basic necessities, including food, clothing, housing, transportation, and fuel and utilities, and the C and I is used to adjust certain program benefits, such as for Medi Cal's, the state supplementary payment, SSP, the temporary assistance for needy families, and in home supportive services, or IHHS. Finally, I would note the following three points regarding this proposal. First, the proposal does not change the structure or intent of the C and I as we retain the same categories, weights, and focus on essential goods. Second, this does not materially affect benefit levels since the estimate that finance will use is intended to closely track historical C and I trends.
Third, 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?
Speaker 67
You, Madam Chair. Ryan Woolsey with the LAO. In August 2025, our office released a write up on options to update the C and I. The administration's proposal is consistent with our recommendations in that report, so we recommend that the legislature adopt the language. My question is,
Speaker 1
there's no specific data to it. It's just flexibility. Reason source. Yeah.
Speaker 66
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
Speaker 66
We would use the national data. We would use the national the national data is still being released. And so we would look at historical trends from the regional with the national and use that as our as our metric.
Speaker 1
Making sure, because you said if there's no national, you would use an estimate.
Speaker 66
No, I'm sorry. I misspoke. The national data is still being released. The BLS has just discontinued all regional data. So we would still kind of use the national as an input into our estimate for the region.
Speaker 1
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 No.
Speaker 1
So you're gonna be using the national? Yes. Mhmm. Perfect. We're gonna hold the item open.
Thank you so much. Thank you. Now now move back to issue four. Alright.
Speaker 2
Alexis Fernandez Garcia with the Department of Social Services. I'll respond to this issue area on CalFresh and other food programs. So the twenty five-twenty six revised budget includes $18,100,000,000 total funds in twenty five-twenty six for CalFresh and nutrition programs, reflecting a decrease of about $161,000,000 from the Budget Act of 2025. The total includes $13,200,000,000 in federal food benefits, which are not reflected in the CDSS budget. These decreases are primarily due to changes under H.
R. One. The 'twenty six-'twenty seven Governor's budget proposes $17,200,000,000 total funds in 'twenty six-'twenty seven for CalFresh and Nutrition Programs, reflecting a net decrease of $1,000,000,000 total funds. This total also includes $12,700,000,000 in federal food benefits, and again, the net decrease is primarily due to changes under H. One.
In addition, there is a federal fund decrease and corresponding general fund increase due to the HR1 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 on 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. CalFood 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 'twenty two-'twenty three, CDSS's food bank partners have received $260,000,000 in CalFood funding, including $24,000,000 in baseline funding.
As we move through the remainder of 'twenty five-'twenty six, 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 CalFood 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, H. One will impact who is able to access Cal Fresh, 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 Cal Fresh 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.
Speaker 68
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
Speaker 68
$60 per month in supplemental benefits automatically when using their benefits, for eligible fruit and vegetables, at participating retail locations. As of 03/14/2026, 1,000 or
Speaker 68
120,000, 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 a 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 $10,500,000 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 $7,400,000 in incentives. Phase three then relaunched in November 2025 and is live.
I do want to thank all of the senators and assembly members who have supported this program 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.
Speaker 67
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 of the projections that may revision, and don't have anything further to add. Okay.
Speaker 1
Thank you. Deputy director, you shared 26,000 approximate people in the the pilot program, but the goal was it's we're a little shy, 10,000 shy. The goal was to hit a little more than 30,000. What happened to the other?
Speaker 2
So there are natural caseload dynamics. So we we built the estimate at based on a point in time. How many ESAP households did we have that met that criteria? Our caseload is dynamic, and so this number represents the current real number of households that meet those characteristics. So while we may be serving less each month, what we can do at the end of the pilot is move those dollars forward for another month.
So it won't be benefits unspent. Great. Okay. So we're hitting the max eligibility.
Speaker 1
It's just a different case load is different. We're not missing anyone that is eligible for this.
Speaker 2
Right. Yes. Because it's an automatically applied. It's not something that someone has to apply for.
Speaker 1
Right. And now if there's leftover funds, we can add a month Yeah. Or so after. Yeah. Okay.
Speaker 2
Folks will come in and out of our caseload regularly. So the number may change month to month, and then we'll adjust at the back end to spend every dollar.
Speaker 1
Okay. With CFAP in October 2027 Mhmm. What happens on October 2027? Like, what does that look like on that October 1 for the automation and all that?
Speaker 2
What can we expect? So the California Food Assistance Program is on track to expand 10/01/2027, contingent on an appropriation. So, leading up to that date, we have several buckets of work underway. The first is related to automation. We are now, again, we've picked up work again with just a slight pause, but work again has picked up on the back end automation that would allow CFAP households after the expansion to draw their benefit from a state bank account instead of from the federal account.
That's kind of the primary driver of that automation, though there's a lot of reporting and other factors that will be ready. That automation will be available on 10/01/2027, regardless of whether the appropriation is made. That is our plan. And so, once the appropriation is made, it'll be ready to turn on, for lack of a better term, and it can be used to draw down those state benefits. We also just completed an RFP process to select an outreach vendor, and that vendor has been selected.
We are in the process of working through timelines and making sure that we're ready to conduct the outreach that we've committed to ahead of that 10/01/2027 timeline. The outreach will be to The outreach will be to people that are newly eligible, so all Californians above age 55. And so once the appropriation were made and we knew that 10/01/2027, is the go live date, we are set up to launch that outreach right away.
Speaker 1
And are we going to be mindful in saying you're not 100%? I just want to make sure that we're not telling people.
Speaker 2
Our plan is to be prepared to launch once we know that the date is a certain for certain. We wouldn't want to conduct outreach. We're going
Speaker 1
have a 100 people here for public comments saying, I was told, and there's no state funding in there. Yes.
Speaker 1
Okay, great. How much are we saving, deputy director, with approximately 22,000 people that are reclassified under CFAP and have fallen off of CFAP because they were misclassified there?
Speaker 2
I have them. Give me a minute. Somewhere. Lots of notes. Here we go.
A lot happening. Okay. So, we have identified eligible people who were financially eligible for federal CalFresh who were unintentionally placed in CFAP. Our current estimates are that that is in the range of the 20,000 people that you mentioned. Of course, we continue to do more research and refine our estimates, so going into May revision, we may have an updated number.
But the anticipated general fund savings, because they are leaving the CFAP caseload, is $42,800,000 And there are some administrative savings as well of $4,000,000
Speaker 1
in the governor's budget. Okay. But we I mean, this is it's like a really weird situation because they're gonna fall off, and then they won't even be eligible for CalFresh.
Speaker 2
It's it's definitely unique. The circumstances under which it occurred were quite unique because of the large influx of humanitarian immigrants and the delay in the federal guidance. And many of these errors just happened at the eligibility level where, you know, workers are trying to get folks on to benefits. That is their job and made an inadvertent error.
Speaker 1
Okay. Have they been made aware? And how would they be made aware if they haven't?
Speaker 2
Right. So our plan, we kind of refine, again, the estimates heading into May revision, is to implement this change at the household's next recertification, which would be the normal touchpoint at which their eligibility would be reassessed, and also aligns with the changes on the federal CalFresh benefits side, where the H. R. One now restricts eligibility for lawfully present noncitizens. So, are going to align.
We're not going do it ahead of schedule. We're going to align with the time at which we would make the change on the federal CalFresh side.
Speaker 1
Okay. Because of that, and we're still those savings are still being captured in this year, even though it's going to be aligned for the recertification and that's sporadic?
Speaker 2
So budget was built with information known at that time, and we have since then confirmed implementation dates. And so, again, heading into May revision, we'll make refinements related to timeline, related to any change in the anticipated impact. But but importantly, sort of related to the budget year,
Speaker 1
Yes. To the budget year. Yes. Director, did you want to add anything to that?
Speaker 5
Yes. I was just going to add that I think as a practical matter, individuals may not actually know whether they're being served through CalFresh or through CFAP. So to the extent that we're doing outreach related to the changes in CalFresh rules, also outreaching to these individuals, It's not like they will know, wait, I was in CFAP, now I need to move to CalFresh, but then I'm losing CalFresh. They know the federal rules changed, and now there is a change to their eligibility. We know, in the way that we budget, that they were being moved from CFAP to CalFresh, that's where they were losing their benefits.
But they don't necessarily see it that way.
Speaker 1
Are we doing in place to make sure we try not to reclassify future people?
Speaker 2
So we would have to look at alternative options. Right now, in both current statute and under the federal option that operates the California Food Assistance Program in California, eligibility is limited to people who lost eligibility for federal benefits after 1996 welfare reform. So two things would have to happen to continue serving them
Speaker 2
CFAP. We'd have to change state statute, but we would also need to have the type of automation in place that we have planned for 10/01/2027.
Speaker 5
I think I took your question to be slightly differently about how we're training and doing q quality assurance to make sure that we don't have these kinds of errors again.
Speaker 5
So that's Okay. Good. Now now you'll get both answered. And and to that, I would say, I first of all, I do think that it was a sort of somewhat unique situation in terms of the way that those humanitarian parolees came in. And so, it's hard these days to say that anything might ever not be preceded in terms of what happens again.
But I think what we can do is provide as clear guidance as we possibly can and training and technical assistance to the counties as immigration law changes to make sure that we're as clear as we can be about who is and is not eligible for CalFresh and who is and is not eligible for CFAP. And so that's a quality assurance and case management process that we do. We do management evaluations with the counties where we review cases. As we've identified this, we've had extensive conversations with the counties and with SAWS. It's something that we are hoping to continue improving.
Right.
Speaker 1
And to the other question, if you could add on to that, was like, what else can we do with this automation? What else would it be eligible for us to do with that? And I think you started with that.
Speaker 2
Right. So, you could consider something like expanding the California Food Assistance Program according to age or some other eligibility criteria. What the automation will provide us is, within CALSAS, a program that is separate and apart from the federal CalFresh program, and the ability to link that separate program to state funding sources. If you wanted to use that program for other reasons or to serve other people, you have to change the eligibility criteria that are tied to that program in the system. And so, we have been asked, you know, how long would it take to do something like that, and it really depends on the complexity of the eligibility criteria that are set and what the expectations are for, you know, how people would be served by that program.
And so, a timeline is not available without that type of detail.
Speaker 5
I'll just add that this is a question that frequently came to us as we've been talking about HR1 in terms of noncitizens who are losing eligibility on the CalFresh program and the question of could we serve them in CFAP? This is a prerequisite. If there were funding available and the legislature and the governor made an agreement to do such a thing, this would be a prerequisite to doing it through this system. So the automation that we're creating with the adjustments for the eligibility factors that the deputy director was describing is what would facilitate the ability to do something like that should the funds be available.
Speaker 1
Okay. And do we know how, on average, how long someone stays on is on CFAP? Because I know that's limited, right?
Speaker 2
We would have to get back to you. It's not limited. It aligns with CalFresh. And so what we would provide you is just the average length of time that someone spends on CalFresh and or CFAP. They are there's no, to Director Tory's point, the client themselves does not know the difference.
Speaker 1
Could you please help educate me on this? So legal permanent residents under five years are ineligible for CalFresh, so they go to CPAP. Correct. But if now they're six years, then they're not eligible for CalFresh. Mhmm.
So that means they're time limited on CPAP. Yes? No?
Speaker 2
Yes. For that particular category where the waiting period applies, there are it's kind of a complex set of rules for who is exempt from the time the five year waiting period or not. But you are right. So if someone comes in, they apply for food benefits, they complete a single application, we look at their immigration status, and we assign them on the back end either to CFAP or CalFresh. When they become eligible for federal benefits, at their next eligibility determination, we will move them over Because without them that is the benefit that they're eligible for.
And so, from a client perspective They're still on the program. Yes, and you wouldn't know the difference.
Speaker 1
we're I guess that's something like how long are we paying for it until we're able to switch them over on average? Do they come at the first year? Or is are they coming like, oh,
Speaker 5
And a lot depends on their immigration status. So not all immigration statuses have that kind of expiration period. For some That's people, right. They may be prolonged, be right? Served in and never become eligible for CalFresh.
For others, like you Okay. Described, they would move
Speaker 1
CalFood funding, historically well, I'm sorry, historically. For a couple of years now, we've gone past the $8,000,000 baseline in years that I don't think have been as chaotic as this year. If we've done it in the past and this year is even more drastic, this budget year is even more drastic, especially with HR one. Department of finance, I'd like to turn to you on this one. The rationale, if we did it before and it wasn't as crazy.
Speaker 32
Noel Fakadji, Department of Finance. What you see in the governor's budget is that continued commitment to the 8,000,000 baseline. I think the overall structure of the governor's budget is a workload based budget, and we are happy to continue conversations.
Speaker 1
There's a huge interest, from the body of the senate to ensure that, we match as closely as possible the previous investments in this, especially with what's happening in HR one. I recognize more investment in CalFresh is better than the return. Right? You know, I forgot the number of for every dollar what you get, but it's more on CalFresh than it is food banks. But still, since we can't really do the CalFresh a little bit more, there's a huge interest for me and my colleagues in ensuring we get a little bit more on that.
I think that's all I have in this space. We'll hold that item open. Oh, just one quick question. On the CalFresh benefit pilot
Speaker 1
Can you send me the geographic breakdown of where all these 26,000 people are across California? I don't know if you have it on you.
Speaker 2
I I don't have it on me. Yeah. And I will need a little time to pull it, but I could get you that.
Speaker 1
Okay. And I forgot I have another question. Maybe department finance or someone count me on this one. There's an increased general fund cost because of h r one, but then there's a general fund savings because of the decrease in CalFresh caseload. Is that being put together so the increase is is subtracted by that or the increase is already with the subtraction?
Speaker 3
So I think what you're referencing is just sort of the overall budget for for CalFresh. I think you're you're correct. There are a number of sort of moving components. As part of our January budget and in our May revision, we always look at sort of caseload adjustments more broadly. We talked at earlier panels around how we are sort of making assumptions about what H.
R. One sort of will mean in this space, and we will continue to refine and adjust those numbers. And so, you see the additional dollars for county admin as well as adjustments for disenrollment that may be anticipated as a result of HR1. You also see additional dollars associated with the expansion individuals that are subject to ABOD.
Speaker 3
the rolled up net effect. I think what you are referring to is that there are some components that are going up and some are
Speaker 1
components going down. If I look at the increase, am I looking at the final number total Yes.
Speaker 3
in the budget, that would reflect the net effect of all of these various components.
Speaker 45
Carrie Younger, Chief Financial Officer at CDSS, on behalf of Number Five. The change in the administration at the federal level has made the Department's administrative landscape much more complex to navigate. For example, we have seen a significant increase in the number of executive orders that are changing established practices and principles that served as a foundation for the department's programs. We're experiencing increased audits, reviews, as well as changes in policy and direction from oversight agencies. This proposal requests 2.7 in total funds, 1.7 in general fund ongoing to support nine positions and 600,000 per year for an IT contract.
The positions will work to address the increased legal, financial, legislative, and information technology workload associated with analyzing and responding to the multiple demands of the federal government. The IT contract dollars will be used to I'm sorry to procure enterprise data by automating the security measures to prevent unauthorized access and data leaks.
Speaker 1
Department of Finance issued two with DHCS, very similar. I recognize it's a ton. It's so much every day. A new EO. I get it.
It's valid. But some are requesting limited positions. Some are requesting permanent positions. I'm wondering the rationale versus if I see the light at the end of the tunnel and this administration is not gonna be here forever, And I think h r one will be reversed, maybe earlier than the federal administration still in in power. Why have this why respond to these things in a permanent manner versus a limited manner?
Yeah.
Speaker 32
To clarify, this particular proposal isn't HR one specific. It's kind of everything but HR one. And the resources we included were what we believe the department needed to right size the work workload.
Speaker 1
Not just HR one, but these are in response to EOs that will go away once the federal administration is gone, more than likely. Right? So I'm just, again, wondering why are they permanent?
Speaker 3
Yeah. I mean, I think we are sort seeing sort of a significant ongoing workload. I know the department can sort of speak more broadly to sort of hiring challenges in some cases associated with limited term sort of resources. It's what we think is appropriate, but hear you that we evaluate the budget on an ongoing basis. And so if in a future date we were to see that maybe those resources were no longer appropriate, we would reconsider at that point in time.
Speaker 1
I would want the reverse. Right? I think in some cases, like, let's see, year two years. I think it's easier to do that versus doing the opposite of let's remove reevaluate and remove. But I'd love to hear a little bit more.
Speaker 45
Limited term positions under CalHR guidance can only be hired for two years. We anticipate that this will be at least a three year run. So being able to hire for really specialized positions in legal, fiscal, and IT for a two year period and then rehire again for the third year doesn't really support the need of what we anticipate at least in the next three years, and then to the Department of Finance's position. This is a reaction to a larger federal change in landscape, not just the executive orders, but also understanding there's been significant changes in guidance from oversight that will probably take significant time to unpack and possibly, hopefully, reverse. So hear you on the concern and the hope that it will revert quickly.
But I think from a need from the expertise of the staff, the restrictions for the two year limited term from CalHR standards, and what we're hoping to accomplish overall for the federal response, we propose a permanent.
Speaker 1
That confuses me because issue two is a four year limited term. So if CalHR's if that point
Speaker 3
We could follow-up with our sort of HCS colleagues and just speak specifically to sort of how they assessed that Okay.
Speaker 1
And no other questions on that? We're going to hold the item open. Move on to issue number six.
Speaker 2
So issue six is referred to as CalFresh enhanced monitoring. So this proposal is specific to CalFresh responsibilities, increased federal compliance monitoring, newly required corrective action plans, and the implementation of the ABOD time limit, which requires dedicated ABOD time limit management evaluations to maintain federal compliance, have restricted our ability to effectively administer the CalFresh program and puts us at risk of a loss for federal funding, financial penalties, and increased federal oversight. So this proposal does request $4,800,000 in twenty six-twenty seven and $4,700,000 ongoing to support 18 permanent positions for, specifically, application processing timeliness, recertification processing timeliness, and the payment error rate, which the federal government does require the development of corrective action plans across all counties which is subject to fiscal penalties implementing those formal corrective action plans at the state and local levels to assess improvement over time and monitor progress and to implement those ABOD time limit management evaluations statewide, including 1,000 case reviews that are required federally to meet their compliance requirements.
Speaker 1
Yeah, I definitely recognize avoiding the penalties and all that. Hold on. Beat you. Leo?
Speaker 67
Similarly on this one, no concerns at this point, but would note that this is in support of a really high fiscal priority for the state, which is getting the payment error rate addressed and harkening back to the panel that we just had, providing technical assistance to counties to help them avoid errors in eligibility determination. This would support that.
Speaker 1
Yeah, I agree. But I also want to copy and paste my previous comments from before on I think it'd be more difficult to make these to make permanent positions reverted. You can imagine legislators are getting attacked as if we just continue to grow government and continue to grow government. So I just wanna be mindful of that. If we could just do them temporarily, that'd be just if we could just take that into consideration.
Hold the item open. Move on to issue number seven.
Speaker 68
Ryan Gillette, chief data officer, Department of Social Services. The department has two budget proposals related to what we are calling the enterprise data pipeline, or EDP. EDP is a modern data infrastructure aimed at managing data, automating reporting, protecting privacy, improving analytic capabilities, enabling data driven policy decisions through a cloud platform data warehouse. This allows us to run analyses more quickly and accurately by providing the computational power needed to process the large amount of administrative data that the department manages. The EDP has reduced the run time of analyses by 97% in some instances.
For example, we were able to take data run that used to take over twenty hours to complete. We can now run-in under five minutes. To date, the insights from the EDP have contributed to the positive outcomes for people we serve, including a $13,000,000 reduction in EBT theft by enabling real time data driven decision making and ongoing estimated roughly $1,000,000 in avoided theft that's coming from work that is made possible through the EDP. We first implemented the EDP in 2023 with an initial $3,000,000 investment. This funding is set to expire on 06/30/2026.
So, the first EDP budget item is a premise. This is ongoing funding for the enterprise data pipeline. It includes 3,000,000, or the 20 the budget act for 2021 included $3,000,000 for this effort. Since that is expiring, we are looking for an expansion. So, the 2627 governor's budget includes an additional 850,000, in total funds, about 400,000 in general funds for, fiscal year 2627, and ongoing to maintain the pipeline infrastructure, expand data capacity, and align with the CDSS caseload.
The second EDP budget item is a BCP. This proposal requests $2,700,000 in total funds, 1,900,000.0 in general funds, and ongoing equivalent funding for up to 11 positions to support the department's ability to continue utilizing the EDP. These positions will provide CDSS organizational planning, management, and technical support and design capabilities to ensure proper maintenance of the EDP. The EDP ultimately supports our ability to meet state and federal reporting requirements, avoid fiscal penalties, and produce timely and policy relevant data analysis. Happy to take any questions.
Aleo?
Speaker 1
I had trouble figuring out the difference between issues five through seven. They're they're all or even even closer to issue six where, you know, the goal is these are people. So the these are people to prevent the penalties, and issue seven is a data system to prevent penalties. Am I understanding?
Speaker 2
Somewhat. They are all somewhat related. So issue five is staff across the department. It's not specific to an individual program. It includes legal support, legislative support, a variety.
Issue six is CalFresh specific. It has to do with the monitoring requirements unique to that program. And issue seven is a tool that we use to execute on all of these priorities. I'll give you an example. The EDP is helping us run more real time analysis on our timeliness data, which is tied to the technical assistance that the team in CalFresh would provide to counties in terms of the relationship between the three.
Ms.
Speaker 2
Issue eight is related to implementation of AB 79, which was chaptered in 2025 to improve student access to social services at California public colleges and universities. AB seven D-nine requires that CDSS convene an ongoing work group to address challenges in terms of connecting students to services. It also requires that CDSS train campus staff who help students with basic needs, like food and housing, as well as work together to streamline, make improvements, implement new policy choices, and whatnot. We also have some reporting requirements under this proposal or under AB 79. The proposal requests $219,000 in fiscal year twenty six-twenty seven and $213,000 ongoing for one permanent position to meet the requirements of AB 79.
In terms of the department's efforts to improve CalFresh access amongst eligible college students, we continue to work with partners to simplify access whenever federal law allows. The data speaks to the cumulative impact of our collective work to make CalFresh more accessible. Since student specific data has been tracked and added to our dashboard about three years ago, the student caseload has grown by over 25%, from 158,000 students to over 200,000 students monthly. In the last year alone, the student caseload grew by nearly 7%, outpacing the general caseload, which grew excuse me, which experienced a loss of 3%. A few things have contributed to this.
Course, very grateful to our CalFresh outreach network, who collectively assisted nearly 187,000 college students with their applications last federal fiscal year. Our team also increased work to provide technical assistance. We have an ongoing student work group on a quarterly basis. We host webinars, trainings really have made this a top priority for our access work. We also continue to look for ways to streamline processes and reduce administrative burden.
For example, we have identified ways to administratively streamline the verification process related to some exemptions from the student work rule. Our goal is to improve efficiency and accuracy for both students and county workers alike.
Speaker 1
Thank you. Speaking on one of the things, so one of the things you mentioned, You know, this bill is asking for you to convene workshops, work groups to identify solutions and fix. But the department just got like a home run on one of the things on how to fix and get, like, 600,000 college students to now be on on on CalFresh. This is you know, I know this is a legislative priority. You know, we passed this bill.
It's signed. We have to we have to fund it. But I'm just wondering the the need given that we just solved a huge problem and are getting a lot more on, if there's legislative will there to maybe delay, or maybe can this be absorbed, given that you've already done so much in this space?
Speaker 2
You are right. We've done quite a bit, and we will continue to find ways to increase access for students. As things stand under this legislation, we are required to convene these work groups, submit the reports, and do the work. Right now, that is not absorbable for us. If we were to preliminate language is a discussion that we could have with the committee.
Speaker 1
Okay. I'd be interested in that because I just feel like we you just the department just did something so huge in this that the bill was passed without that information
Speaker 2
Okay. This next item is related to implementation of AB seven seventy seven, also chaptered in 2025, which aims to maximize the amount of federal food assistance provided, to residents impacted by a disaster. Specifically, the bill clarifies the process and timelines by which electrical corporations and local publicly owned electric utilities share data with CDSS for the purpose of issuing automatic mass replacement of CalFresh benefits. Automatic mass replacements can be requested from the federal government when food purchased with benefits can be assumed to have been lost because of the disaster imagine an extended power outage. The timely sharing of that data allows us to respond more quickly.
Under AB 77, CDSS will submit a report to the legislature by the 2026 that includes additional ways for California to maximize available food assistance and any additional oversight actions needed to meet the objective of the bill. CDSS requests equivalent position funding for one research data specialist position ongoing to analyze and report aggregate data for disaster supplemental nutrition assistance program for DSNAP. So, this position allows us to operationalize the requirements of the bill to submit more requests for automatic mass replacements.
Speaker 1
Can you I'd love to learn a little bit more about, like, how we calculate what needs additional positions and what doesn't. Like, how do we know? So This is one I would understand. No, I understand. Yeah.
Like, if it's like a we need five positions more, was like, it seems like a really heavy workload. One position. Explain, if you can, deputy director, how it's not absorbable.
Speaker 2
So we look at the current workload across the positions that we have. And as new requirements come down you know, not every requirement requires a position. It depends on the extent of the work that comes with that. But as new responsibilities are tasked to the team, reports, responsiveness on certain timelines, the data analysis, that work cannot be absorbed while continuing to meet our other responsibilities, both under previous state law or federally for kind of day to day program operations. So, it's really about the weight of the workload and what the team already is responsible for.
Speaker 1
Okay. Can I hold the item open? Thank you. And move on to issue number 10.
Speaker 2
Okay. Issue number 10. So this item is related to disaster CalFresh, which provides supplemental food benefits to ongoing CalFresh households, as well as one month of temporary food benefits to disaster victims who were not eligible for regular CalFresh benefits at the time of the disaster. Under current law, all impacted areas included in a presidential major disaster declaration with individual assistance are required to request to operate deCalFresh, regardless of the unique impacts of the disaster. This TBL proposes to allow CDSS and impacted counties to assess the impact that is unique to that disaster and the severity of the impact in relation to households in the area, their general eligibility for disaster CalFresh, whether it was an unpopulated area that was impacted, we would consider the extent and severity of the disaster, the size and location of the population, the amount and duration of power outages, the number of homes, for example, and use that to determine if disaster CalFresh is the appropriate response.
What we have found is that we have operated disaster CalFresh counties where we have received very limited applications because the individual assistance was granted, but the disaster itself did not impact, for example, a populated area or an area with low income that would indicate that people would be eligible for the benefit. We do not anticipate that the assessment will create any delay in the development of our disaster CalFresh plan. We would conduct the assessment in parallel to our already existing process to determine each county's readiness to operate DecalFresh. This typically occurs within a week or two of the disaster declaration. In some instances, we can expedite this assessment because information can be collected before the disaster declaration.
For example, we have emergency response partners who track population density in impacted areas, power outage we know those before the disaster declaration is made, and so we would have a good sense of whether DecalFresh is an appropriate response. Importantly, the Department of Impacted Counties would be able to conclude that operating DecalFresh in some counties under the Individual Assistance Declaration and not others is still appropriate. It would not preclude us from operating across parts of regions, if that's where the impact is. There's no BCP or estimate or costs associated with the TBL.
Speaker 67
Don't have any concerns. This seems like a reasonable place to provide some flexibility to the department if the legislature is interested
Speaker 1
Thank you. So it's not that it's less requests. You're not going to be requesting less assistance. It's more Right. Strategic or
Speaker 2
So, what we would so, today, when there is a disaster declaration with individual assistance, every county that is must be included in our planning and operations, which are quite cumbersome. Has a high bar that the feds require us to meet. Under this proposal, we would look at the counties under the declaration and make an assessment as to whether disaster CalFresh is the right response based on the unique factors. So, for example, we might exclude a county where the fire or power outage impact was in an area without a dense population and include the county that does have a dense population. That would be one example of how we might
Speaker 2
Yes. So we have struggled with the amount of operational demand to set up and prepare for disaster CalFresh for very limited applications. Now, those individuals are it's still important to serve them, and the regular CalFresh would be program would be available to them. It just wouldn't be this one month of benefits under disaster CalFresh.
Speaker 2
Okay. This item is related to the recovery of CalFresh in California Food Assistance Program over issuances. So currently, Fresh and CFAP overissuance claims are combined into a single claim with no practical distinction between programs. We just talked about clients not knowing the difference, right? So, it's a single claim.
As part of the state's preparation to implement the CFAP expansion, the state is implementing new back end system automation to draw state funded CFAP benefits from a state bank account, among other changes. When this is complete, households receiving both CalFresh and CFAP, who are subject to an over issuance collection, will need to repay both federal and state benefits. Under current rules, these households could face simultaneous reductions in their monthly CalFresh and CFAP, resulting in a lower monthly benefit amount compared to similarly situated households receiving only CalFresh or only CFAP. So, we are proposing a change to allow over issuance claims to be collected one after the other, rather than at the same time. That would limit the reduction on par with a CalFresh only or a CFAP only household.
So the CalFresh overpayment would be collected first, followed by the CFAP overpayment until full repayment is complete.
Speaker 2
Alright. This item is related to CalWORKS, the state's version of the Temporary Assistance for Needy Families program, a key safety net program for families with children. CalWORKS provides cash assistance and job services to eligible low income families with children. It is funded through a combination of the federal TANF block grant, about $3,700,000,000 annually, the state general fund and county funds. The fiscal year 'twenty five-'twenty six revised budget includes $6,400,000,000 total funds, which reflects a net decrease of $16,800,000 from the Budget Act of 2025.
This decrease reflects lower CalWORKS assistance expenditures due to slower caseload growth than previously projected. The 2027 Governor's budget proposes 6,500,000,000 total funds, which reflects a net increase of $71,500,000 The increase reflects higher employment services expenditures due to a higher projected caseload and full funding restoration for CalWORKs home visiting and mental health and substance abuse services. The projected caseload in 'twenty five-'twenty six is 356,744 families are receiving CalWORKs. The projected caseload in 'twenty six-'twenty seven is just over 360,000, so slightly higher, which is a 1% lower than the projection in the Budget Act. We anticipate that the CalWORKs caseload will increase but at a slightly slower rate.
There is no proposed maximum aid payment increase for October 26 based projection of available revenues in the Child Poverty and Family Supplemental Support subaccount. The maximum grant level remains at $11.75 dollars per month for an assistance unit of three residing in a high cost county, which equates to 53% of the federal poverty level. Before I pass it over to Director Troia, let me answer your questions about the status of federal funding for the TANF grant, the Child Care and Development Fund, and the Social Services Block Grant. As the committee is aware, the federal government actions to freeze these fund sources is the subject of ongoing litigation. The court in that case has issued a preliminary injunction that prevents the federal government from implementing that freeze.
Until a decision is issued on the merits of the case, the Administration for Children and Families must continue to issue funds in a business as usual manner. We do not have an estimate for how long it may take to receive a full opinion on the case. We will also note that there have been delays receipt of some critical federal funds in recent months. The Q2 TANF funds for federal fiscal year 'twenty six were delayed to all 50 states. However, we did receive that funding in late February.
We are still waiting on our quarter two social services block grant funds for FY 'twenty six. We would typically expect to receive those in January. Now, let me turn it over to the Director to talk about transforming CalWORKS.
Speaker 5
Yeah. Always fun to come and actually talk about the parts where we're still working on our North Stars and moving forward and making significant progress together. So, this is certainly one of those areas and one that we are really proud to be moving forward. So, as you are well aware, the Transforming CalWORKS initiative is really all about intentionally pairing family centered policy changes to create a program experience that centers family voice and choice and is more responsive to families' needs and goals. We have been engaging with a very wide range of partners and prioritizing input from parents with lived experience in shaping the policy, program design, and implementation of this suite of changes to the program.
There's policy guidance forthcoming with release dates that range from this month through the summer. Automation is required for some of those policy changes. Overall, we're working to maximize flexibility and reduce burden. So this looks like, in the orientation and appraisal process, creating options for participants to complete orientation and appraisal online, with support, or in person. For the streamlined appraisal tool to replace the online CalWORKs appraisal tool, or OCAT, the new appraisal tool is meant to be more brief.
It's meant to be easier to understand and sensitive to participants' personal experiences. This is one that does take automation to fully implement. Our policy guidance is expected to be released this summer. A couple of other policy changes in response to SB119 and this initiative include the mandate that counties provide advance payments for transportation, the deferral of sanctions in the first ninety days a participant is in the program, and a mandate that counties verify if a family has received the child care support they have requested. All three of those changes also require automation, and policy guidance will be released this month.
Finally, Job Club will be optional for participants, and instead, counties will work to identify alternate options with the end goal of connecting families to meaningful and lasting career pathways. This is another policy change that requires automation. We're releasing policy guidance, we estimate, in May, followed by a webinar closely behind to support counties' implementation. So, overall, it is all underway. We're working very closely with our partners, and we have staggered implementation depending on the timing of that guidance and automation, but it's happening, and we're excited.
Speaker 67
Nothing specific to raise at this point, but we will reach out if we have anything to identify, and we'll be reviewing the May revision closely when it's available.
Speaker 1
I actually have a question for you, Ryan. So you you you've talked about LAO has talked about, like, the spending plans significantly overestimated. The previous spending plans have significantly overestimated Catworks caseload. But I think you know that it's a technical issue that does not indicate changes in Catworks policy and that you don't recommend any adjustments to the proposed budget related to unspent TANF funds even though there's consistently unspent TANF funds? And I'd love if you can expand on that.
Speaker 67
Sure. So typically, CalWORKS is thought of as a program that will grow when there's a recession. More people lose employment, their incomes fall, they become eligible for the program. The pandemic was a really unique situation where, at the time, there was forecasts of really significant increases in unemployment and as a result, corresponding projected increases in CalWORKs enrollment. That did not play out that way for a couple of reasons.
One, the unemployment wasn't as bad, ultimately, as was initially projected, but also there was significant additional federal relief that was targeted to these families that made it so that they did not end up enrolling in CalWORKs. So what that meant is that when you pass a state budget, you're assuming a certain level of spending. And in CalWORKs, we have to meet a minimum non federal level of spending. We call it the maintenance of effort level. And so when we spend less than was budgeted, you still have to spend the state funds and so it's often TANF funds that are left unspent.
And those can roll over from year to year. So we've had multiple instances in the past decade or so where there's a pretty significant amount, sometimes several $100,000,000 of federal funds that becomes available that wasn't originally anticipated. And that then creates, if the stars align and if things work out, you get within that year general fund savings. What we think is happening is that probably should be ramping down because we've now kind of come out of that pandemic period and caseload projections have been a lot closer to what actually has happened. So while we can't ever say with any certainty that there won't be TANF carry in, it likely won't be on the magnitude.
We would not expect it to be on the magnitude that it has been in some recent past years with multiple hundreds of millions of dollars. So at this point, we wouldn't recommend adjusting the budget. But as always, we're going to be reviewing the new information from the administration in the May revision and the subsequent updates to look at that.
Speaker 1
So the past couple of leftover TANF has gone to general fund to offset it?
Speaker 67
So in any given year, you're going to have a different mix of federal and state funds. At the moment, the state is spending enough in state funds that using those unspent TANF funds to support the program doesn't bring us below our maintenance of effort requirements. So in a sense, yes. But over the long run, we get the same $3 plus billion of federal funds every year, and we're using that to support CalWORKS and a number of other programs in the state budget. But due to, I would say, normal variation when you compare projections to actuals, there's going to be some movement from year to year where there's unspent TANF funds which you then can use.
Speaker 1
What do you use it? What are the options to use the unspent TANF funds for each year? It's just it's different each year?
Speaker 67
I don't know that it's necessarily different each year. TANF is used primarily to support CalWorks. It's also used we have $400,000,000 that's used to support the Cal Grants program, a couple other small places where we use those funds. It's really best to think of the entire collection of programs as one entity. I don't know that there's necessarily an accounting of where the unspent TANF dollars go, and it's not as if in this year there was in 2526, there was some new expenditure that was identified to use the TANF funds on.
It's used on the same things we were using it on before.
Speaker 1
even though there is unspent, it's not really left over. It's always just put back into CalWORKS. It's not like we're building this fund of unspent TANF dollars.
Speaker 5
If I can just add, I think it might be helpful to just recognize that the program is an entitlement program. We set the policy for it. We adjust the caseload and the expenditures according to who comes in the door and what services they utilize. The federal black grant is a set dollar amount as well. So, those things are sort of fixed and, well, the fluctuates, but our full funding of it is fixed.
And so, the mix of funding does fluctuate, but it's not a policy change. It's color of money change from year to year. So, we often describe internally, in a more technical sense that the general fund and the TANF are actually fairly fungible. We
Speaker 5
to fund the full program. But in any given year, we might be using an extra TANF dollar or an extra general fund dollar.
Speaker 1
The reason why I was asking this is I know this year we're not doing a grant increase. And I was like, if we have leftover, can we do a onetime grant increase? I know it can't be ongoing. So I that's why I was wondering if there was, like, a fund available for us to tap into. Okay.
Thank you for for that clarity. I'd like to stick on the topic for the caseload growth. We've consistently overestimated the the anticipated growth here. But this year, we've projected a growth, but we've consistently over projected. Why are we continuing to over project?
Speaker 2
Well, the projected caseload in 'twenty six, 'twenty seven is 1% lower than the projection in the Budget Act. I think that's what you were looking at. This upcoming year, it's 1% lower, a slight decline.
Speaker 1
The governor's proposed budget projects minor growth in caseload and services. Costs are projected to increase.
Speaker 1
But reflects a very slight projected caseload increase. I know it's lower, but it's still projected to grow.
Speaker 1
But we've but we've it hasn't grown at the rate that we've anticipated each year. Mhmm. So I'm wondering if we are we sure that we're even gonna get that 1% growth?
Speaker 2
They are projections by their nature, and so we are doing our best, whether it's CalWORKS or CalFresh, to look at the totality of circumstances, the economic picture. There are some challenges, as you all can imagine, right now with people who might be self selecting in or out of programs that aren't going to appear in our methodology. And so we are doing our best to project as accurately as possible based on the information we have. In department finance,
Speaker 1
how does okay. So last year, we over projected. What happened to those dollars?
Speaker 3
So we adjust as part of the governor's January budget and the May revision. So what you see before you is our adjustment sort of reflecting sort of increases, decreases or slower than projected increases. You see the sort of dollar amount associated with that change in assumption at each of those points in time.
Speaker 1
And should stay with social services, so dollars. We're allocating for them. Okay. So I just it just feels like we're constantly missing the anticipated mark. And then on the restoration of two of the programs that are coming back, it's been a couple of years.
Where has it two years that it's been eliminated. How easy is it to plug it back in? Just reduced it, but not Okay. Just reduced, not eliminated. It so
Speaker 2
it'll be okay to So the four you're talking about the restoration of the CalWORKS home visiting program and mental health and substance
Speaker 1
I might have already answered my question because I see that I think later I read that they're at capacity of utilization, so I can imagine there's a wait list. So it'll be easy to just increase the slots for both of that. Okay. The one, though, the third one that we're adding more funding for is sitting around, I think if I read 85% utilization even with the reduced funding, how confident are we that even though we're adding more money for the CalWORKS mental health and substance use disorder services? Sorry.
I'm not tracking. So sure. Yeah. Yeah. Let me turn around because I bounce around.
So, actually, it is on the same topic. So there are two things that are getting restoration. It's the home visiting
Speaker 1
Which I've seen is about, like, a nineties over 90% utilization. So we anticipate that's gonna need more. Yep. We're also restoring mental health substance use disorder services.
Speaker 1
But even with the reduced amount that it's had, it's only meeting about an 85% utilization rate. Now that we're going to give them more funding, how confident are we that all that funding is needed even though since it's not using its full amount now?
Speaker 2
I mean, our engagement with counties is that they are ready to use those dollars. We will see how that materializes in the out years, but they are ready to absorb the additional funds.
Speaker 1
Well, counties did not absorb 15% of it now, so I'm not fully confident in that. I would love in the may revise if we can reevaluate these numbers and see if the full amount is needed all the way up to a $130,000,000. Director Evy Penny counts right now, and it just maybe let's reevaluate this upcoming year and see if they even reach up to some increase or not the $430,000,000 I don't know if you want to add to that.
Speaker 3
I appreciate that comment. That's something we always look at at finance, ensuring sort of all the programs are appropriately sized given sort of the demand for those programs. Perfect.
Speaker 1
I wanted to get so we just talked about the the case growth. The case load growth is really it's a really slow rate. But I'm seeing that it's a fast caseload growth to employment services. So is it that the overall cases aren't increasing as much, but the people within has increased in their need for employment services?
Speaker 5
Maybe we have different things we're going say, so we can both we can tag team. So, first of all, I want to say that this similarly is an area where the pandemic had a really significant impact in terms of employment services. Expenditures did go down significantly as people were granted exemptions during that period of time. And so, there's been a lot of fluctuation in the use of employment services dollars in recent years. And so, we are now seeing pretty significant increases in employment services dollars, which may be partly a natural sort of progression of that.
I think you were going somewhere else if there's anything. Okay. But that also does not impact the caseload numbers. That impacts the single allocation, which is the way that we fund administration for the program. But what you were talking about in terms of caseload is the sheer number of assistance units and families who are receiving aid in any form.
And there's a separate case load that is the employment services case load. And within that, there's people who are utilizing employment services or not. Okay. Perfect.
Speaker 1
That's all I had on that. We're going to hold the item open. And I think that concludes our presentations for the day. Thank you for hanging out with me for the entirety of this day. I will make my flight.
We are going to go into public comment now for all the items post HR one.
Speaker 32
Sorry. Good afternoon, Madam Chair. Thank you for holding this hearing. I'm Keeley O'Brien with the Western Center on Law and Poverty and also representing Grace and Child Poverty and the California Coalition of Welfare Rights Organizations. We're very grateful to the legislature and the administration for the tremendous progress California has made in reimagining CalWORKS to be more anti racist, trauma informed, and family centered over the past few years.
And, as Director Troia mentioned, this is truly one of our north stars. So, we urge the legislature to protect and continue this progress by eliminating sanctions that only serve to penalize families already in deep poverty, like the outdated one hundred hour rule and the unrelated adult males rule, which punish working families based on negative stereotypes rather than their actual needs. And in addition, regarding the disaster SNAP TBL, Western Center urges the legislature and administration to specify in that language the timeline on which the decision must take place to avoid any delays in the urgent benefits, and we recommend adding language to provide counties with a lead person. Thank
Speaker 65
Hello, again. My name is Jackie Mendelson with Nourish California, also here on behalf of the Food for All Coalition. Two quick urgent requests. First, we urge you to keep your promise to expand CFAP to Californians 55 and older regardless of immigration status in October 2027. And second, to ensure that the systems are ready to deliver on that commitment in time.
This infrastructure, as we've spoken to today, is what will protect Californians from federal harm for years to come. I just want to say, under incessant federal attacks, immigrant communities urgently need safe and stable routes to food assistance, and Food for All is that permanent solution that ensures families feed themselves with dignity. Thank you for taking every action possible to ensure that all Californians, regardless of immigration status, the time limits they're subject to, etcetera, have access to the food they need, no exceptions, no exclusions.
Speaker 19
Good afternoon. Hello, again. My name is Benjamin Chao with the California Immigrant Policy Center. It's become clear that without immediate investment, food insecurity and poverty will worsen in our state due to HR1, and it's critical to continue to invest in multiyear commitments to address hunger across California and ensure that we have equitable revenues to do so. We're co sponsors of the Food for All Campaign and are in support of the Food for All Budget Request to Protect the CFAP Expansion to immigrants ages 55 and older, regardless of status, set for our next fiscal year, 10/01/2027.
This expansion, which has been planned for several years already, is an anchor for a larger collective vision to address exclusions and barriers in our food system. Food access should not depend on someone's immigration status or where they were born.
Speaker 25
Ms. Good afternoon, Madam Chair. My name is Emily, and I'm the diaper bank manager at the OC Diaper Bank. We are one of the 11 diaper banks that make up the California Association of Diaper Banks. The OC Diaper Bank serves approximately 10,000 infants through our 99 partner agencies, such as local WIC clinics, children's hospitals, local community health centers, Head Start, First Five, and the list goes on.
As safety net supports are scaled back under HR1, more families will face heightened diaper insecurity, increasing reliance on diaper banks to help families remain stable as federal assistance declines. We ask for your support of the California Association of Diaper Banks' ask of $16,500,000 in ongoing funding and the twenty twenty six-twenty twenty seven budget to sustain the distribution of diapers and wipes to families in need.
Speaker 37
Good afternoon, Madam Chair. Omar Altamimi here with the California Panethnic Health Network, also representing the California Working Families Coalition. With respect to the conversation around The U. I. S.
Population, recognizing that any savings the state might be experiencing are a result of cuts made in the past year to these community safety net programs and so on. California workers must obtain medical certification to access paid family leave and disability insurance. Californian workers may need to obtain medical certification to access job protection under pregnancy disability leave in the California Family Rights Act. Given the connection between paid leave and health care access, California Working Family Coalition supports Health for All's budget request to protect health care for immigrant communities. And then finally, wanted to include a quick statement of support on the expansion of CPAP for older adults and the removal of exclusions for immigrants.
Thank you.
Speaker 69
Okay. Good afternoon, chair and committee staff. My name is Michelle Lee with Nurse California. I urge you to continue to mitigate the extreme harm that HR1 will cause on Californians and additionally also invest in successful programs that strengthen our safety net like the CalFresh Fruit and Veggie EBT program. This program is extremely effective and popular.
In the month of February alone, over 75,000 households earned nearly $4,000,000 in supplemental benefits. Without renewed funding, the program will again be forced to pause, which will further limit families' grocery budgets during a time of already harsh cuts. We know hunger will be exacerbated for many communities, and even before HR one, CalFresh benefits didn't last people the full month. While the Trump administration wields hunger as a weapon throughout the country, we can take a different path forward and invest in programs that support Californians. We can't pull back on all the progress that we've made so far.
Thank you.
Speaker 40
Christine Smith with Health Access California. We urge the legislature to push back on the harmful Trump cuts and support the 200,000 lawfully present immigrants who are being kicked out of full scope Medi Cal. Under the proposed January budget, these folks will only have access to care in emergency situations, and we appreciate the chair's response to an earlier comment on this issue. We also urge the Senate to stand firm against any further cuts that would impact the UIS and undocumented populations impacted by last year's state budget cuts, and specifically do not include the harmful work requirements. The 28,000,000 referenced in this hearing to create a system to collect premiums from low income undocumented people could and should be used for health care.
As co chairs of the VIBOR Health Coalition, Health Access asked the legislature to consider long term sustainable revenue solutions. Thank you. Thank you.
Speaker 47
Kelly Brooks, on behalf of the California Association of Diaper Banks here in support of stakeholder budget request number seven for diaper bank funding. Diapers are a critical basic need but are not covered by SNAP. When food insecurity rises, diaper needs rise simultaneously. Families are forced into impossible tradeoffs between food, rent, utilities, or diapers. This can exacerbate childcare barriers and lead to missed work.
Unfortunately, state funding for California's diaper banks is again set to expire at the end of the fiscal year, and funding was not provided in the Governor's budget. The legislature has stepped up the last two years in a row to extend the program through the leadership of some of your colleagues, including Senators D'Arrazo, Archuleta, Perez, Richardson, Umbar, Groupeo, and others. We are here again asking for $16,500,000 in this year's budget. This is the time to expand state funding for diaper banks, not eliminate it. We continue to urge the committee's support.
Thank you.
Speaker 41
Good afternoon. Thank you for hosting today. Also, thank you for the investment that you made last year in the CalFresh Fruit and Vegetable EBT pilot, and thank you to CDSS for making sure that that program was back on quickly. As my colleague mentioned, in February, we saw over 75,000 families participated and benefited and earned almost $4,000,000 It's particularly important for us to continue investing, and so we hope that you continue to do so by approving $100,000,000 this year for that program to continue and expand. That will make sure that people like my grandmother are able to get the food that they need to maintain their health when they're navigating really difficult health issues, for families to be able to feed their kids new vegetables because they can actually afford to try the new vegetables.
And because of H. One's cuts and all of the difficulties we're seeing, we know that there have to be a menu of options to meet all of the different challenges that are in that bill. This should be on the table. It should continue to be supported, as should programs like Food for All and Safe App. So I hope that you're able to keep that in mind as you're making difficult decisions in this climate.
Thank you so much. Thank you.
Speaker 42
Good afternoon, Chair. George Cruz, on behalf of the California Behavioral Health Association. We just want to highlight the broader context of the federal changes that are reducing investments in public benefits and shifting additional costs onto state and counties. These changes create a real risk for stability in behavioral health and social service As California navigates these challenges, the state must remain proactive in drawing down all available federal opportunities. This includes programs like CCBHC model, which provide enhanced federal matching for wraparound care and services.
The approach will be critical to protect access to essential services for California. Thank you. Have a safe flight.
Speaker 50
Beth Monowski, the SCA of California, proud part of the Health for All Coalition. As I mentioned to my colleagues today, I wanted to reiterate the importance of doing everything we can to support our immigrant communities, in particular pushing back and rejecting the January proposals that could further harm our immigrants, especially undocumented UIS populations. And I ask you, Elder, also reconsider the proposals and actions that were taken in the FY twenty five-twenty six budget that are ultimately harming these communities as well. Thank you.
Speaker 33
Good afternoon. Whitney Francis with the Washington Center on Law and Poverty. Just to echo my colleagues at Health Access and SEIU, we call on the legislature to support the 200,000 humanitarian immigrants who are being kicked off of Medi Cal by the Trump administration or being kicked off of full scope Medi Cal by the Trump administration's policies. And we urge the legislature to stand firm against further cuts to the undocumented and UIS populations who were impacted by last year's state budget cuts and to reject state budget proposals that go beyond what HR one demands by rejecting harmful work requirements and to state only populations. These cuts are cruel and costly, and California should not go beyond or should not voluntarily amplify president Trump's policies.
Thank you.
Speaker 55
Good afternoon, chair and members. My name is Monica Madrid. I am, on behalf of the Coalition for Humane Immigrant Rights. We respectfully urge the the state to invest in protecting, access to Medi Cal and food benefits for communities that are excluded under HR one and to ensure that there are no further cuts to Medi Cal to our immigrant communities. We also ask for investments to the e saving program and additional funding for immigrant legal services.
These investments are critical to keeping immigrant, families healthy, stable, and able to contribute to California's economy and communities. Thank you.
Speaker 1
Thank you, everyone. Budget sub committee number three has adjourned. Have a good weekend.
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