Source: John Mulholland, StateAffairs
Assembly Health Committee Chair Mia Bonta opened an informational hearing Tuesday with a stark warning: proposed federal cuts to Medicaid and related health programs would strip billions of dollars from California’s health care system, leaving millions of residents without coverage and placing severe strain on hospitals, clinics and county safety nets.
Bonta said HR 1 — the tax cut and spending megabill passed by Congress last year — would result in roughly $1 trillion in Medicaid reductions nationwide. For California, she said, that would mean tens of billions of dollars lost annually, with as many as 2 million residents at risk of losing Medi-Cal coverage. Hundreds of thousands more could be priced out of the individual insurance market through Covered California.
She acknowledged that California has already made Medi-Cal reductions due to state budget pressures, but said federal actions would deepen those cuts. “When people lose coverage, families delay care, medical debt rises, chronic conditions worsen, and people end up sicker and more expensive to treat,” Bonta said.
Bonta said lawmakers had spent months holding health care roundtables across the state — urban and rural, north and south — with providers, labor leaders, advocates and hospital administrators. She said that federal policy changes are creating instability, driving up costs and scaring families. Hospitals and clinics, she said, face tens of billions of dollars in lost revenue, with safety-net providers hit first.
One of the panelists, Dr. Sandra Hernandez, president and CEO of the California Health Care Foundation, said the hearing was taking place during an “incredibly volatile time.” While federal policy is shifting, she said, California has historically acted to protect its residents.
Hernandez said Californians view health care as a necessity, not a luxury, and pointed to decades of legislative action that reduced the state’s uninsured rate and expanded Medi-Cal to nearly 15 million people. She warned that HR 1 represents the largest funding reduction in Medicaid history and would undermine that progress through work requirements, more frequent eligibility redeterminations and immigration-related exclusions.
“These policies are framed as about work,” Hernandez said, “but they are really about paperwork.”
Jason Constantouros, Fiscal and Policy Analyst in California Legislative Analyst's Office, warned that provider tax changes could shift costs to private insurance consumers and that long-term financing options are shrinking. Analysts also said coverage losses would likely increase pressure on county indigent care programs, many of which have been scaled back since the Affordable Care Act.
The hearing then turned to individual testimony. Chaz Franklin, a Covered California enrollee from Colusa County, described how the expiration of federal subsidies caused his family’s premiums to rise from $540 a month to nearly $4,000.
Franklin said he and his wife live on about $6,000 a month in retirement income, making the new premiums unaffordable. He said his mortgage is $1,300 a month, meaning health insurance costs three times more than housing. Franklin told lawmakers his wife’s ALS diagnosis qualified her for Medicare, lowering costs — a development he described as both devastating and absurd.
“No one should have to be diagnosed with a terminal illness to afford health care,” Franklin said.
State health officials were also present. Department of Health Care Services Director Michelle Baass said Medi-Cal serves nearly 15 million Californians and warned that up to 2 million could lose coverage under HR 1. She said eligibility changes would begin in 2026, with immigration-related provisions following later.
Tyler Sadwith, Chief Deputy Director of Health Care Programs and State Medicaid Director at the California Department of Health Care Services, said work requirements alone could eventually lead to 1.4 million people losing coverage. He said the department is attempting to automate eligibility checks and maximize exemptions to avoid procedural disenrollments, which in other states reached as high as 77%.
Covered California Executive Director Jessica Altman said the expiration of enhanced federal premium tax credits at the end of 2025 is already driving coverage losses among people who do not qualify for Medi-Cal but lack employer-sponsored insurance, including early retirees, gig workers and small business employees.
She said Covered California estimates average consumer premiums are rising nearly 97%, and as many as 400,000 enrollees could drop coverage due to affordability pressures alone. New enrollment during the current open enrollment period is down 32% compared to last year, Altman said, an early indicator of rising uninsured rates.