Lawmakers, Experts Detail How Federal Cuts Will Gut State's Safety Net, Strip Coverage from Millions
Tuesday, Assemblymember Mia Bonta (D-Oakland), Chair of the California Assembly Health Committee, convened an informational hearing this week examining how HR 1 is systematically dismantling California's health care infrastructure. Expert testimony highlighted how Trump’s signature legislation will strip tens of billions of dollars annually from California's health system, force millions of Californians off Medi-Cal, and devastate safety net providers already operating on razor-thin margins.
Hearing Background Information
THE SCALE OF FEDERAL DISINVESTMENT
Assemblymember Mia Bonta, Chair, Assembly Health Committee:
"The federal dollars which once supported health care for working families are now being funneled into mass deportation operations. HR 1 cuts will result in about a trillion dollars from Medicaid nationwide being lost. For California, that means tens of billions of dollars every single year stripped from our health care safety net. Up to 2 million Californians stand to lose Medi-Cal coverage. Hundreds of thousands of people will be priced out of buying their own coverage through Covered California."
"The damage goes even beyond coverage losses. Our hospitals and our clinics face tens of billions of dollars lost in revenue. And we know our safety net providers, the ones serving our most vulnerable communities, will be hit first and hardest. But California cannot sit idle while Trump's Congress dismantles our health care system. We have a responsibility to act decisively, and we will."
STATE HEALTH LEADERS CONFIRM MASSIVE CUTS
Dr. Sandra Hernandez, President & CEO, California Health Care Foundation:
"Today we're defending the health security of nearly 15 million Californians against the largest funding reduction in the history of the Medicaid program. HR 1 cuts federal funding for health care by $1 trillion nationally over the next decade. For California, we estimate that this translates to billions of dollars in annual cuts. And as you are all aware, this is a hole in our budget that we simply don't fill with state reserves. The introduction of work requirements and six month eligibility redeterminations is often framed as a policy about work. It is a policy about paperwork."
Michelle Baass, Director, California Department of Health Care Services:
"HR 1 makes sweeping changes to the Medi-Cal program and will cause widespread harm by making massive reductions in the tens of billions in federal funding and potentially cripple not just this healthcare safety net, but also the general healthcare infrastructure that all Californians depend on… We estimate that up to 2 million individuals may lose coverage as a result of these provisions. The changes will impact our emergency rooms, public hospitals, rural hospitals, community health centers, ambulance providers, and the broader health care delivery system that serves every community."
COVERED CALIFORNIA: PREMIUMS SKYROCKET AS SUBSIDIES EXPIRE
Chaz Franklin, Colusa County Resident, Retired Teacher, Veteran, Covered California Enrollee:
"Here's the scoop. I would be paying almost $4,000 a month in healthcare premiums for my wife and I, with a high deductible. My mortgage is $1,300 a month. Health care costs three times more than my mortgage. We have had to delve deeper into our retirement to pay for the cost of health care before Medicare at age 65. We still must dig into our retirement till I'm eligible for Medicare, and I recognize that not everyone may have a nest egg to fall back upon."
Jessica Altman, Executive Director, Covered California:
"With the expiration of these enhanced tax credits, consumers are seeing much higher premium costs starting this month… The enhanced premium tax credits account for two and a half billion dollars of premium assistance that California's consumers are now losing out on. We have estimated that enrollees will, on average, see their monthly premium costs nearly double, an increase of 97%... Our estimates indicate that due to the enhanced tax credits alone, not to mention the HR 1 impacts and other changes, could result in as many as 400,000 of our enrollees dropping marketplace coverage due to lack of affordability."
SAFETY NET PROVIDERS FACE FINANCIAL COLLAPSE
Martha Santana-Chin, CEO, LA Care Health Plan:
"In Los Angeles County, 41% of residents rely on Medi-Cal and without that, their health and their livelihoods are at risk… Millions of individuals are going to be losing coverage over the course of the next several years and those losses will raise uncompensated care costs for hospitals and clinics at the same time as those same providers are losing funding from restrictions in provider taxes and several other funding mechanisms… Without immediate intervention, these mounting pressures will destabilize the safety net and jeopardize sustainable healthcare for millions of low income Californians."
Dr. Dolly Goel, Chief Clinical Officer, Santa Clara Valley Health:
"HR 1 puts our public health systems on a catastrophic path… For Santa Clara County alone, HR 1 is estimated to result in a $1 billion annual loss due to federal cuts when it's finally implemented. That is 25% of our health system's budget... HR 1's eligibility restrictions will cause massive disenrollment across California and the work requirements alone are expected to impact more than three quarters of a million individuals in counties with public hospitals… When people lose Medi-Cal coverage, they will not stop getting sick. Instead, they will delay care, skip medications, and show up in our emergency room sicker with more complex conditions."
Doug Archer, President and CEO, Dignity Health Mark Twain Medical Center:
"HR 1 will result in coverage losses for more than 2 million and will strip nearly tens of billions from California's health care system… Those patients will not just disappear, they'll show up in our ER and more than likely in worse shape as they avoid or delay care… For hospitals like Mark Twain, the provider fee is a lifeline and we rely on the provider fee to remain viable. Hospitals are truly facing an untenable position. We're facing radically escalating costs and reduced reimbursement… These are not financial decisions, they are actually access decisions. Once a service line closes in rural communities, rarely does it come back."
PLANNED PARENTHOOD FORCED TO CLOSE HEALTH CENTERS
Stacey Cross, CEO, Planned Parenthood Mar Monte:
"The defunding provision of HR 1 prohibits Planned Parenthood from receiving federal funding. As a result, we no longer receive reimbursement for the vast majority of the care that we provide through Medi-Cal and Family PACT. including family planning, STI testing and treatment, cancer screening and other preventative services… For California alone, the defunding provision in HR 1 results in the loss of more than $300 million in federal funding. Planned Parenthood Mar Monte stands to lose up to $100 million annually… We made the difficult decision to reduce expenses to focus on core services by closing five health centers, sunsetting three really critical services: family medicine, behavioral health and prenatal care… Without a longer term solution, patients will lose trusted providers in their communities."
FRONTLINE WORKERS WITNESS THE HUMAN TOLL
Veronica Palacios, Eligibility Worker, SEIU Local 1021, Alameda Health System:
"I work each eight hour shift with 15 to 20 patients in active crisis. They come in with traumatic injuries or with chronic conditions—diabetes, heart disease, cancer—that went undiagnosed or untreated until they became life threatening. Too many Californians are one medical emergency away from tragedy. At Alameda Health System, workers are already being laid off, staffing is already being cut, outpatient clinics are already closing. These cuts will push more patients into already overwhelmed emergency rooms. They will mean longer waits, delayed diagnosis, worse outcomes. I am terrified of what it would mean if California chooses not to fight and allows our patients to lose their coverage. There is no backup system for the uninsured. The indigent care systems in the past no longer exist."
LGBTQ+ COMMUNITY FACES COMPOUNDING THREATS
Robert Gamboa, Associate Director of Public Policy, Los Angeles LGBT Center:
"LGBTQ Californians already face serious disparities in health, housing and safety. But today, federal actions are actively destabilizing the systems of care our communities depend upon. Patients are staying away from the clinics out of fear of being targeted or questioned about immigration status. Families delay routine and preventative care and parents fear their children will lose access to medically necessary medications. These federal policies are destabilizing coverage and do not promote work or wellness. They manufacture a public health crisis while dismantling the safety nets we all rely upon for survival."
RURAL HEALTH CARE WORKFORCE CRISIS DEEPENS
Dr. Raul Ayala, Ambulatory Medical Officer, Adventist Health:
"Across California we have 11 million people that live in designated primary care shortages. There is a formula that says that for every 100,000 people there should be 80 primary care providers, and places like Central California are at 47. Our rural areas are even less than that. Federal changes bring sheer forces that we see across the country where residency programs are closing. Workforce policy is access policy. Physicians trained and retained here means better health care for all Californians."
LAWMAKERS DEMAND BIPARTISAN ACTION, CALL FOR COMPREHENSIVE RESPONSE
Assemblymember Dawn Addis:
"I fully blame the federal government for what's happening with the ACA subsidies and really encourage any of our federal representatives that are listening to take heart to your story, Mr. Franklin. It's one that's not uncommon to Californians right now. We need to be able to put a dollar figure to the cost of not providing care to have an informed conversation. Anyone who has interacted with anybody who receives Medi-Cal services—dental care, hospice, numerous others—would tell you that the cost of not having care is greater than the cost of getting care. But we need to see those hard figures. I think that's important for the conversation and it's going to be important, as a number of members have ideas around revenue generation, that we have a holistically informed conversation."
Assemblymember Pilar Schiavo:
"I'll note that there are no Republican members here at this hearing, I just have to say that out loud, which is unfortunate because I think that we're going to need bipartisanship to find a path forward. Hospitals are being squeezed, not feeling, but actually being squeezed. Clinics are being squeezed through these cuts that I agree we lay squarely on the feet of this Federal Administration. We always talk about how much something will cost, but we never talk about how much it will save in the long term. Sure, we're going to save all this money kicking people off health care, but when they come through our emergency rooms, we're going to pay five, ten times as much. Are we really saving money at the end of the day? We need real numbers to be able to have this kind of analysis. Everyone's going to have to show up to this table and get real about creating a health care system that actually works for Californians in California."
Assemblymember Patrick Ahrens:
"I want to appreciate the comments about having conversations about ideas about revenue generation because it's really hard to fathom the cuts that we would have to make in this year's budget and moving forward without looking at revenue options. I do think that all options can and should be on the table when we're trying to protect vulnerable Californians from the devastating impacts of congressional Republicans. I also would like to add my voice in recognizing that there are no Republicans who decided to show up to the Committee. This was a noticed committee that is public and everyone was invited. I want to notice the absence."
Assemblymember Jessica Caloza:
"What we're looking at and what our Chair is forecasting is really the healthcare crisis before our very eyes. And I feel like that's what we're staring at. It's like bad news layered onto bad news layered onto more bad news. The loss of jobs at healthcare organizations is really important to highlight because those who continue to remain enrolled sound like the staff that we're going to have within our healthcare systems are likely to be more overworked and we're going to have less health care workers doing the work of providing the quality care that our patients need."
Assemblymember Esmeralda Soria:
"This work requirement is going to become more of a paperwork requirement. When I think about what this is going to mean for my community, I'm thinking about the higher unemployment rates that we have in our region. Some of the communities are very rural and isolated and have language barriers. The access piece is still way behind other parts of the state. I want to make sure that we are thoughtful about, as we're looking at ways to reduce healthcare costs, that we don't inadvertently impact communities like mine. In areas like mine, where we don't have economies of scale, affordability looks different than in more urban, dense communities."
THE PATH FORWARD
In her closing remarks, Assembly Health Committee Chair Mia Bonta emphasized that the Legislature must act decisively to protect California's health care infrastructure:
"HR 1 represents the largest ever federal cut to Medicaid funding and federal premium tax credits. Remaining health care safety net programs and providers have little capacity to absorb a significant influx of demand for health care for millions of Californians who are newly uninsured. We must take action to shore up coverage to the greatest extent we can, partner with counties and the healthcare safety net to provide access to care for those who lose coverage and pursue revenue options as needed to maintain California's access to health care. Our objective over the next legislative cycle will be to ensure that we are stabilizing our health care infrastructure and ensuring that we are holding patients at the center of our work,”
The hearing follows a six-stop statewide tour led by Assemblymember Bonta, where she heard directly from health care providers, advocates, and local leaders about the impacts they are already experiencing. The Health of Healthcare roundtables were held in Oakland, Fresno, San José, San Diego, Santa Rosa, and Los Angeles.
BACKGROUND ON HR 1 IMPACTS:
- $1 trillion in Medicaid cuts nationwide over the next decade
- Tens of billions in annual federal funding losses for California
- Millionsof Californians to lose Medi-Cal coverage
- $300 million+ in federal funding stripped from Planned Parenthood in California
- 200,000 health care workers projected to lose jobs
- Work requirements and six-month redeterminations starting January 1, 2026
- Immigrant eligibility restrictions beginning October 1, 2026
READ MORE:
SacBee: Mia Bonta pleads for ‘pandemic-level’ response to Feds’ gutting of Medi-Cal
The Center Square: Official: California can't make up for feds' cuts to Medi-Cal
StateAffairs: California Warns HR 1 Medicaid Cuts Could Strip Coverage From Millions