Committee hears concerns about HR 1's state costs: CalFresh, Medi-Cal and IHSS among top worries

SACRAMENTO — Committee members and public stakeholders pressed the Department of Finance and the LAO about the budgetary consequences of HR 1, with officials confirming an initial estimate of roughly $1.4 billion in added state costs affecting Medi-Cal and CalFresh.

Erica Lee and Department of Finance staff said HR 1 increases state costs through reduced federal matches and administrative changes; DoF identified about $1.4 billion in the budget year allocated across health and human services, with roughly $1.1 billion of that in Medi-Cal and other costs in CalFresh administration. "These are dollars that ... we will be paying as a result of HR 1 specifically," Lee said.

Members pressed whether the administration intends to backfill federal funding losses. DoF repeatedly said the state cannot fully backfill all federal reductions and that it will partner with the Legislature to prioritize which services to protect. Several members, including Assemblymembers Patel and Jackson, singled out proposed changes to In-Home Supportive Services (IHSS), backup provider programs and CalFresh administrative burdens as immediate concerns.

Public commenters representing health, legal aid and anti-hunger organizations urged restoring or adding funding for Medi-Cal coverage for humanitarian immigrants, maintaining the Medi-Cal mobile crisis benefit and rejecting further IHSS cost shifts to counties. "This proposed budget provides 0 new dollars for hunger prevention," a Western Center representative said during public comment, adding that tens to hundreds of thousands of Californians face benefit losses in coming months.

Department of Finance and LAO staff said they are monitoring federal regulatory timing and the May revision and urged collaboration on prioritization. No immediate statutory action was taken at the hearing.