June 28, 2026 - Sacramento, CA – The following statement in response to the California budget deal announced on Friday can be attributed to the California State Association of Counties (CSAC), Rural County Representatives of California (RCRC), Urban Counties of California (UCC), County Health Executives Association of California (CHEAC), County Medical Services Program (CMSP), California Association of Public Hospitals and Health Systems (CAPH), County Welfare Directors Association (CWDA) and County Behavioral Health Directors Association of California (CBHDA): 

This budget deal recognizes the life-saving role of the county eligibility workforce and public hospitals in this federally provoked hunger and healthcare crisis. But it leaves a critical gap.

Many Californians will still lose health care coverage under H.R. 1. And unless the Governor and Legislature provide an alternative to indigent care, counties will be forced to cut core services — threatening public safety, slashing behavioral health and public health services, and driving up homelessness.

The state must act to close this gap before the Legislature adjourns.

Background/Context:

County Family’s proposed alternative to Indigent Care: If the state is not willing to provide sufficient funding to counties to provide indigent health care services to those who lose Medi-Cal eligibility due to HR 1 work requirements, counties have requested that the state create an alternative program to provide services to this population.

This proposal would:

• create a state-funded, emergency services-only Medi-Cal program.
• keep individuals connected to county eligibility systems, supporting smoother transitions back to full-scope Medi-Cal when enrollees regain H.R. 1 compliance
• ensure access to critical, life-saving care and stabilization services.
• prevent individuals from becoming fully uninsured and seeking treatment from underfunded county indigent care programs.
• allow the state to more easily access federal funding when individuals are admitted for inpatient emergency services. (This is because inpatient hospitalization provides a short-term exemption from H.R. 1 work requirements.)
• provide the state with a two-year stabilization period to assess the real-world impacts of H.R. 1 and develop longer-term policy solutions.

H.R. 1’s Impact on Counties: 

• H.R. 1 shifts significant federal safety net responsibilities and costs to states and counties, increasing pressure on county-administered programs across California.
• California counties estimate H.R. 1 will result in up to $9.5 billion each year in new costs.
  
  • Fact Sheet 
• Counties are requesting a multi-year state partnership to protect local communities’ access to indigent care, public hospitals, workforce eligibility and behavioral health. 
  
  Source: CSAC