County officials warn HR1 could strip benefits from thousands, push clinics and food banks to expand services

County staff told the Board of Supervisors on June 25 that federal HR1 work requirements and policy changes could remove benefits for thousands of residents and increase county costs for eligibility administration and medical care.

"Right now the impact is estimated at about 5780 households that could lose their benefits," Assistant County Administrator Debbie Vaughn told the board during the budget hearing, and she warned that the county is preparing for additional strain on clinics when medical work requirements begin in January 2027. "We're looking at approximately 27,000 individuals that we think may be impacted," Vaughn said, calling the estimate preliminary and subject to change as federal and state regulations are clarified.

Vaughn and other staff said the immediate county-level administrative costs tied to CalFresh changes include funding 10 additional eligibility positions (about $1.8 million) and a higher county share of administrative costs (an increase from a 15% to a 22% cost share, roughly $2 million), producing approximately $3.8 million of new county expense that is included in the recommended FY 2026-27 budget. She also flagged potential federal penalty allocations based on error rates, saying the state's error rate is 10.98% and that different allocation methods could produce county-level impacts that range from a few million dollars to much larger exposures.

On the medical side, staff outlined scenarios in which county clinics could face $3.2 million to $5.3 million in new costs and countywide medical exposure could approach $14 million if a portion of people who lose Medi-Cal or related coverage become indigent under the county's obligations to provide medically necessary care.

Community partners attending the hearing described rising demand and offered support. "The food bank stands committed to helping and partnering and our CalFresh outreach team can help screen for exemptions and we also are a place where people can come and volunteer and we'll help them record those hours," Caitlyn Sly of the Food Bank of Contra Costa and Solano said. Max Peree9, a director with a regional consortium of federally qualified health centers, said the county's three FQHCs are likewise preparing for higher demand.

Staff described steps the county is taking: outreach and education for clients, partnership with Workforce Development to connect clients to work and training hours, negotiation of clinic reimbursement rates with the state, and a proposed (but presently unfunded) HR reserve that could be seeded if year-end fund balance allows. County staff said they will continue legislative advocacy, monitor state/federal rulemaking, and return to the board with more refined estimates.

The board recorded no votes on HR1 at the meeting but directed staff to return with updates and contingency plans.